Crops
Rice in a vertical farm does not work — but where are the exceptions?
You have heard it at least once: “rice does not work in a vertical farm.” And yet you cannot quite let it go, so you are looking into it closely. If you are reading this, you are probably one of those people.
In regional revitalization meetings, in debates about food security, or as a way to put an idle facility to use, “factory production of rice” comes up again and again. You also hear stories of it succeeding overseas. So you think, “maybe in Japan too.” On the other hand, ask an agricultural expert and you get an instant “it does not pencil out.” Which one is right? You want something to base a judgment on.
The easy place to stumble is treating rice cultivation as a single, nationwide question. The question “can you grow rice in a vertical farm” has hidden conditions buried underneath it. Where do you build the factory? How much does electricity cost? Where are the buyers? In reality, the truth is closer to this: it does not work as the rule, and exceptions exist only under conditions. Where those exceptions are — that is what we will walk through, step by step.
The disadvantage of factory rice is not just energy
You can grow rice perfectly well in a paddy, without dragging anything like a vertical farm into it. And it is cheap. Growing lettuce or strawberries in a factory I can still understand, but when I first heard “and rice, deliberately, in a factory,” honestly I thought, “why?” It needs land, it eats electricity. And yet you hear scattered reports that overseas it worked. Apparently it is not all a dead end. That mismatch nagged at me, and I wanted to know what makes the difference between working and not.
Rice is cheap because the paddy — the land — is essentially free. Rain falls and the sun shines, and nobody pays for that share of the cost. But do it in a factory, and a price tag gets attached to all of it. Light, temperature — a person has to supply them with energy. So if you try to recoup that energy cost at the price of ordinary staple rice, you have basically no chance of winning.
But the power bill is not the only reason rice is a poor fit for a factory. Rice is, at root, a poor match as a crop. The edible-part ratio is low, and there is a lot you cannot sell — husks, leaves, stems. You are putting light and electricity into growing those discarded parts too, so the energy you spent goes straight to waste. On top of that, the growing period is long; in Japan’s climate you are doing well to get two harvests a year, so the turnover is slow. For a factory that wants to recoup its capital cost, slow turnover is a heavy burden all on its own. Before you even get to the power bill, the very shape of rice as a crop does not mesh with factory economics.
Even so, the stories of it working overseas usually involve special conditions. Land where electricity is absurdly cheap. A buyer nearby who will pay a high price. Or a use, like pharmaceutical feedstock, where the rice itself sells for many times the normal price. In short, it is not that rice is impossible. How far the three line up — cheap electricity, a nearby buyer, and an outlet that sells high — is what dramatically shifts how the economics look. Put the other way around: in a place where those three are far off, no matter how much you polish the technology, you will struggle to reach profitability.
It is not “disadvantaged because it is rice,” but “disadvantaged because of the use and the energy.” This read is partly backed by the numbers. In one estimate comparing hydroponic lettuce against open-field, the yield over the same area came out 11 times higher, while the energy took 82 times more (see 1). You can win on land and water, but on electricity you lose by orders of magnitude. That asymmetry comes out clearly. In an estimate for growing cereals indoors as well, more than half of the operating cost was eaten by the electricity for lighting (see 2). That is exactly why staple cereals — rice, wheat, corn — which support roughly 60% of the world’s food calories, are, under the current cost structure, going to be hard to make profitable in a factory for a good while yet. One review organizes things along the same lines (see 3).
The outlets that pencil out are limited to uses that sell high
So what kind of outlet makes factory rice hold up? The key is uses where “the price is on a different order from ordinary eating rice.” A representative one is rice carrying a high concentration of a specific compound used as pharmaceutical feedstock. You can set the unit price of such rice far higher, and finely managing the growing environment to raise the concentration of a specific compound inside the crop is precisely the domain a vertical farm is good at. A factory that can fully control both light and temperature suits it, and even at a high price you come out ahead. And if awareness of food safety and stable supply rises, there is a line of reasoning by which demand could emerge for factory-grown rice itself.
This sense of “it cannot be absorbed unless it sells high” also comes into view from the lineup of crops actually running in factories today. What is commercially viable is roughly limited to leafy greens, herbs, and berries, and one source notes that, in terms of the world’s calorie supply, these come to only about 6% (see 4). One estimate puts the high-value crops indoor farming can address at around 4% in terms of farmland area (see 5). Turn that over, and if you do not have an outlet that fits into that narrow high-unit-price band, you cannot absorb the factory’s power bill. This is not rice itself: in a research use where a taste-changing functional protein (miraculin) is produced in a recombinant tomato, they have built it up to the point where even how the light is applied changes the yield per unit area and per unit power — and only then does it hold up as high-value-added production (see 6). Thinking of high-value-added rice as an extension of this line makes it easier to picture. That is how high an outlet has to sell for, for it to hold up.
Seed rice and rice for research are also examples that connect to this high-unit-price outlet. Wanting to grow a breeding line still in progress in just a small quantity, protected from disease and cross-pollination — for that kind of research-phase management, a factory that can close off the environment does have its merits. But these do not carry a unit price on the order that pharmaceutical feedstock does, and the market is small too. They are best kept tucked in a corner of your mind, purely as a subordinate example.
So can the three line up in Japan? Honestly, it is quite tough. Electricity is on the high side if anything, and for rice there are paddies in endless supply. It is less about winning on conditions. It is more that, when someone who already has a high-unit-price outlet happens to secure a place with cheap electricity, only then might a single site hold up. It is not something you do nationwide; it only really holds up at points, here and there.
Overseas success is about location, not technology
In Japan it only really holds up at points. So the cases that look like they succeeded overseas — what is different about them? Have you ever come across news that factory cultivation of rice worked overseas? These are stories set in a Middle Eastern desert, on high ground, on remote islands. When you see cases like that, you want to think, “well then, Japan too.” But what is the same and what is different when you bring it to Japan — that is where misreadings easily happen.
Overseas success cases mostly stand on the premise of “water is scarce,” “electricity is abnormally cheap thanks to subsidy,” and “usable land is extremely limited.” In a Middle Eastern desert, you cannot waste a single drop of water, so there is value in cycling water in a closed environment, and electricity is often cheap by state policy. On remote islands and high ground, too, bringing things in from outside costs a lot, so there is worth in the very act of “making it on the spot.” In other words, over there, the reason a factory pays off lies in the disadvantages around it.
Japan is almost the exact opposite on that score. Water is abundant, electricity is high if anything, and paddies are sitting idle. So with the same technology, the tailwind that made factories hold up over there all disappears in Japan. The news looks like a story about technology — “rice was grown in the desert” — but it is really a story about location — “it paid off because it was the desert.” Bring the technology over as-is and the premise alone drops out, and the economics stop working.
The structure of “precisely because of that location” also comes into view in the numbers from estimates. In an estimate targeting Kuwait in the Gulf, it is reckoned that with less than 0.1 square kilometers of vertical farmland, you could eliminate imports of six major vegetable items (see 7). But the thing to watch is that this is about vegetables, and it does not go so far as to say “it pencils out without subsidy.” One review surveying vertical farming broadly points out that even if you can technically grow it, the high construction and operating costs and the failure to pencil out are the biggest barrier to adoption (see 8). So overseas success is a story of “in land that cannot rely on imports, value emerged as import substitution,” and not necessarily a story of the economics holding up. Keep those two separated, and you make misreadings easier to avoid.
Turn to the domestic picture, and the advantage or disadvantage of location in terms of electricity comes into view too. In an estimate for the type of vertical farm that takes in sunlight (the sunlight-utilizing type), one analysis shows that more than 85% of power consumption correlates with the outside air temperature (see 9). In a separate study comparing cold-region vegetable factories, a place like Abashiri in Hokkaido was reported to keep energy costs the lowest among the 10 cities compared (see 10). That said, both of these are about the sunlight-utilizing type or about vegetables, and they are about the axis of how to hold down the HVAC load. They do not map directly onto a closed LED rice factory that covers all its lighting with electricity. Even so, “a location where cheap electricity lines up” has to be seen to include not just the electricity rate itself but the difference in HVAC load due to climate — and as a reference point for that line of sight, they are useful.
The order for checking the economics for your own location
Now that the view — that the picture changes with location and outlet — has settled in fairly well, then: if you actually want to think through “does this pencil out” with what is in front of you, where should you start checking? And one more thing, a plain nagging doubt: while subsidies are flowing, won’t it look profitable? How do you separate that out? I imagine those are the questions on your mind.
On the premise that there is a high-unit-price outlet, let me talk through the order for checking with what is in front of you. First, look at the power cost of lighting and HVAC, which eat the most electricity. Roughly set how much electricity it takes to grow one kilogram of rice, multiply it by the electricity rate you are actually contracted at, and just work out the electricity cost per kilogram. If that already exceeds the price of ordinary eating rice here, then refining things further down the line will not change the conclusion.
If there seems to be a sprout of a chance, next look at the outlet. Is there realistically, within reach, a buyer who will pay a high price — for pharmaceutical feedstock use or research use, say? And further, can that buyer keep taking the quantity you produce on an ongoing basis? These high-unit-price outlets are often small in volume, so it is not a given that there is room left for your share. Without an outlet, even if you can make it cheaply, it just becomes inventory.
For separating out subsidies, the sure way is to redo the calculation on the bare economics with all subsidies stripped out for the moment. Treat the equipment subsidy and the electricity subsidy as if they never existed, and ask whether the selling price of one kilogram still exceeds the cost. If it runs at a loss there, then what looks profitable is the power of the subsidy, not the power of the business, and it vanishes the moment the subsidy ends. Treat subsidies, strictly, as something layered on after the bare economics are clear. This order is the safe one.
The order of “electricity first” has solid grounds behind it. In one review organizing vertical farms, electricity is reckoned to account for 20-40% of production cost, and of that electricity, 60-85% is eaten by lighting (see 11). In other words, the biggest and hardest-to-move lump is electricity, and the moment you set that at your own rate, the answer is almost in view. In fact, there is a rough estimate that growing wheat in a vertical farm can cost about 50 times the open-field cost (see 5). When the gap is this wide, no amount of fine refining further down the line will flip it. So the order of “test the electricity cost at the bare rate first” makes sense.
Whether to go or step back — sizing it up against the three conditions
Once the order is clear, the outlook gets a lot better. Let me put down just one last thing, about where to draw the line.
Everything up to here is not meant to lump rice together as “impossible in a factory,” nor, the other way, to push you forward with “you can do it if you try.” Cheap electricity, a nearby buyer, an outlet that sells high — when in doubt, first look honestly at how far these three line up. I hope you will take it that way, as a foothold for judgment.
If you find the three are far off, then polishing the technology from there will struggle to reach profitability, so stop for a moment. If they look like they will line up, then work through it in order, starting from the bare economics of the electricity cost. Of course the three do not settle everything; with rice, the slow turnover and the high waste come into play too, and if the scale is small the weight of the capital cost remains. The three are, strictly, the cutoff axes you test first when in doubt — not an all-purpose condition that, once met, guarantees it holds up.
And there is something to watch even when there is a prospect of the three lining up. High-unit-price outlets, like those for pharmaceutical feedstock or research, are often small in volume. So after “they lined up, so work through it,” check once more whether “that outlet has room for your share too.” It is not that rice is impossible, nor that technology will sort it out; when in doubt, what you keep coming back to, in the end, is whether that outlet is open in that particular place.
There are parts that cannot be stated cleanly. Even so, as an axis to come back to when in doubt, these three make just the right entry point.