September/October – 1998
Story Title: A Global Perspective
Author: Steven Carruthers
In his keynote address to the Hydroponic Merchants Association Conference in America, STEVEN CARRUTHERS, publisher of Practical Hydroponics & Greenhouses magazine, gave an insight into the future direction of hydroponics around the world.
As we approach the new millennium, the importance of hydroponic technologies will continue to increase. Not only in the laboratory where it is classically used for plant research, but as a method to grow food and to solve a wide range of problems. According to a ‘thumb nail’ survey conducted by Practical Hydroponics & Greenhouses earlier this year, and analysed by columnist Rick Donnan, the total area under hydroponic crop production round the world is about 12,000 ha or about 30,000 acres. The annual production of vegetables alone is in the vicinity of 3 million metric tonnes, and when that is combined with cut flowers, this gives a total annual industry value of over US$4 billion dollars at the farmgate.
These are impressive figures, indeed. But can we begin to imagine the value of the industry by 2030, not only in dollar terms, but in terms of environmental sustainability; when the world population is expected to double. Eleven billion people, 90% of whom will be located in Asia, Africa and Latin America. Can we begin to imagine the technological changes that must inevitably take place in order to meet this challenge.
Ladies and Gentlemen, fasten your seat-belts. We are about to enter the ‘Golden Age’ of hydroponics. Over the next three decades, population pressures are expected to herald decreases in the amount of available land and water, at a time when crop yields will be required to double. And hydroponic technologies are well placed to meet this awesome challenge.
Situated on the door-step to Asia, Australia is well placed to service one of the world’s great food bowls, not only in raw and processed food, but in technology transfer. The Asian meltdown is only a temporary setback.
Already, there are signs of recovery in two of the worst hit Asian economies – Malaysia and Thailand. In spite of an under-valued Australian dollar, the Australian economy remains strong. Japan will recover from its economic slump, and China will become a real economic powerhouse.
Futurists expect the Chinese economy will become the largest in the world by the year 2020. For Australia, as for the rest of the world, this will have enormous implications.
Over the past decade, the Australian hydroponics industry has developed from a small alternative industry, into an important, large-scale commercial industry. In 1997, the Australian Hydroponics Association undertook its first national survey, and although the jury is still out, industry experts forecast the national hydroponic production will be in excess of $300 million annually at the farmgate, and growing rapidly. This represents a 10-fold growth in less than a decade. There are around 2000 commercial hydroponic growers in Australia, with a total of 300 hectare or around 740 acres under hydroponic production. These figures, which are widely believed to be conservative, place Australia as the 12th largest hydroponics producer in the world, and the leading producer of hydroponic fancy lettuce.
Can you imagine that. Three hundred million dollars per annum in less than a decade. It might not seem a lot when you compare it alongside other Australian horticultural industries, but let me tell you, through the eyes of the Australian Government, anything over $100 million is a serious industry. From where I sit as an industry observer, the Australian hydroponics industry is the fastest growing segment on the Australian horticulture scene.
The potential for industry growth in Australia is significant, with the industry expected to double in size by the year 2003. As world populations continue to grow and demand for food increases, this growth will provide strong employment opportunities in the industry, for both skilled and semi-skilled workers, and add significantly to the national income.
One company well placed to reap the benefits of this growth is the Lotus Red Network, a grower-owned marketing company that exports hydroponic produce from its member farms.
Lotus Red has had a relatively short gestation period. At a field day in 1995, the desirability, even the necessity, to form a network of hydroponic producers was quite evident. Faced with depressed prices, many growers expanded their operations to grow more produce in order to make up the shortfall in income, unwittingly contributing to the market glut.
With matching funds from State and Federal Government bodies, 10 growers reached into their pocket to undertake market research, to develop their export marketing skills, and to undertake an export market development mission to Asia in mid 1996. The rest, as they say, is history. Today, Lotus Red exports some 4 metric tonnes of lettuce per week to Asian markets; exports worth around $2 million annually, and growing. The profits are shared by 10 growers according to their contribution to the export basket.
The Australian hydroponics industry is increasingly turning to export markets but faces competitive pressures from both within and outside the national economy. To be successful in the long term, Australian hydroponic farm units will need to be even more efficient in the use of capital and physical resources, able to market an increased range of produce over an extended marketing period, and meet international expectations for product quality and presentation.
In the United States of America, the hydroponic landscape is also changing. Over the past 20 years, the commercial hydroponics industry has remained relatively small and static, despite the fact that a number of techniques were first developed here. Today, the United States is the 16th largest hydroponics producer in the world with an estimated 150 ha or 370 acres under commercial production.
The reasons for this slow growth can be attributed to many factors, including an abundance of rich, fertile soil, and plenty of clean water. However, that is about to change. Over recent years there has been a surge in large commercial installations, which are professionally planned and managed. More care is now being taken with site selection, with the natural advantages of the desert south-west region, with its good winter sunshine, set to become a major commercial hydroponic production region.
Hydroponic technologies will continue to play an increasingly important role in shaping the food resources of tomorrow. In addition to refining and expanding current technology, our industry will embrace new technologies such as biotechnology and nanotechnology, to develop new plant varieties to produce greater yields in smaller areas. The development of these technologies will also result in new methodologies, such as DNA transfer using microprojectiles through cell walls to engineer resistance to problems such as pythium and fusarium, or to produce unique oils. It’s not science fiction. It’s already a reality. Futurist predict that by around 2007, most US produce will be genetically engineered, and it’s not beyond comprehension, that sometime in the near future, we will be able to bio-engineer vegetables with the same protein content as meat, but without the fat.
Some futurist have already labeled the 21st century as the “century of healing”, a time to repair the global environmental abuses of the past. The central plank in agriculture will be environmental sustainability, they forecast. Who better to lead by example, than the hydroponics industry.
The benefits and importance of hydroponic technology will one-day far outweigh the paranoia associated with hydroponics and cannabis.
With increasing population and environmental pressures, other areas of agriculture will also turn to hydroponic technologies, including broad-acre farming. New innovations in irrigation products will have a major impact on broad acre irrigation farmers, who will need to adopt some of the same skills that are applied to intensive horticulture, including hydroponics.
The way hydroponic merchants and growers do business will also inevitably change. An emerging issue in economics will be ‘true pricing’ – the incorporation into the balance sheet of environmental costs. As American economist Paul Hawken notes, the expense of destroying the earth and damaging society is largely absent from prices set in the marketplace.
If a grower dumps his nutrient solution into the ground, which eventually ends up in the ground water and river systems causing toxic blue-green algae blooms, how can this be measured and pitted against the grower’s profit? For hydroponic merchants, what provision have you made in your pricing structure to dispose of the plastic products sold to your customers once they have reached the end of their useful life? Fact or fantasy? It will happen. In Australia, some Government bodies already impose an environmental levy for the use of some utilities, funds that are used to repair and sustain the environment.
According to Tachi Kiuchi, Managing Director of the Mitsubishi Electric Corporation in the US., the answers to environmental sustainability can be found in nature herself. The mission of his company is the same as the mission of civilisation.
“To develop the human ecosystem, sustainably”.
A visit to the Sarawak rainforest changed Kuichi’s life. In a stunning address at the World Future Society in July 1997, Kuichi proclaimed the rainforest a perfect learning resource; a place that excels by learning to adapt to what it doesn’t have. Soils are thin, nutrients are few, it consumes almost nothing. How can it be so productive without capital assets? Because the capital is hidden in the design. Plants and animals are in sync, and the system outrates any business in the world in efficiency and creativity. “To succeed in the new economy,” he told his audience, “we must operate by the design principles of the rainforest.”
This means listening to feedback and learning to adapt. It means to differentiate, to be unique. In the forest, as in today’s economy, conformity leads to extinction. People who regard competitiveness as the key to success are wrong, says Kiuchi. The future belongs to those who co-operate. In the rainforest economies, it is not about the survival of the fittest, but who’s a good fit, he told the audience.
With the formation of the Hydroponics Merchants Association, our industry has taken an important first step towards international co-operation. Our industry is a good fit in the scheme of things to come. As a clean, green and sustainable industry, it is adaptable, and it is unique. As population and land pressures mount, laboratory-engineered foods and hydroponics may well become the only guaranteed pure source of food.
In closing, I would like to congratulate the executive committee of the Hydroponics Merchants Association, who have all worked tirelessly over the last several months to make this Exposition possible. As an international organisation, we may one day see a future Exposition convened downunder. In particular, I would like to congratulate the Executive Director, Robert LaGass, Association President Carl Anderson, Vice President Peggy Madden, and the Secretary/Treasure Jeff Edwards for their very professional stewardship. A job well done.
The success of this inaugural exposition signals that Hydroponics is no longer fringey. Hydroponic merchants around the world are an integral link in the food distribution chain, and their importance in the future can not be understated. They are also the guiding mentors for many of tomorrow’s commercial growers. On behalf of the team at Practical Hydroponics & Greenhouses magazine, I’ m honoured to have shared this moment in hydroponics history.