Hydroponics: The New Green Revolution
The Russian-Ukrainian war has exerted horrible human costs in terms of casualties and civilian displacement. For the rest of the world, since Russia and Ukraine are two of the biggest crop suppliers in the world, supply disruptions from the war and sanctions have made the scarcity issue an urgent problem.
There are ways to deal with high gas prices. You could perhaps drive less, or carpool more, maybe even take public transportation more often. But with food prices up across the board, it’s a harder obstacle to navigate. You could eat cheaper, less quality food, or just eat less altogether, but that’s not good for your health.
Food is basic sustenance. We need food to survive. Having adequate nutrition is literally a matter of life and death. And that’s why the technological trend I’m about to describe is so revolutionary, essential…and profitable.
Food Scarcity a Long-Term Issue
Even before Russia invaded Ukraine and drove food prices higher, food scarcity was a problem the world needed to tackle. The United Nations estimates that by 2050, the world’s food supply needs to increase by 60%. This is due to population growth and standard of living improvements in the developing world.
Through better farming equipment and crop protection, smarter planting methods, and more productive genetically-enhanced seeds, crop yields have improved dramatically in recent decades, but they will need to significantly improve further to meet expected demand.
Furthermore, the amount of planting is limited by arable land. You can’t just start planting crops anywhere. The land has to be suitable.
However, there is a method of planting that can help relieve the arable land limitation.
Breaking Through Land Limitation
Hydroponics offers a way to grow crops without soil. It’s an increasingly popular way to grow vegetation. According to one market research report, the global market for hydroponics was valued at roughly $2 billion as of 2020, and could grow by 20% a year through 2028.
Instead of soil, the vegetation is grown in water, and nutrients like phosphorus, nitrogen, calcium, and potassium are added. The planting can be done indoors, effectively creating extra space.
For example, let’s say you have a plot of land. In traditional soil-based planting, the amount of planting you can do is limited by the size of that land. But in hydroponics, you could have, say, a five-story building on that plot of land and grow plants on all five floors as long as there’s sufficient natural light. Effectively, you have five times as much space.
It’s All About Efficiency
What’s more, because the plants don’t need to spread out their roots to seek nutrients, the space required per plant is much smaller in hydroponics. Thus, with the same size land, you could grow denser vegetation.
Another important benefit: hydroponics actually requires over 90% less water! You may not think of water as a scarce resource, but according to the World Health Organization, only about 70% of the world population has access to safely-managed drinking water services. Going forward, water conservation will become more and more important.
When grown indoors, the plants are better protected from pests. The direct contact of nutrients with the plant roots also tends to produce faster and better yields. There’s also less labor-intensive work and there’s no need for heavy equipment.
Of course, there are some drawbacks too. A hydroponics system can also be expensive to set up and getting the environment just right can take time to learn. You are also very dependent on having undisrupted access to electricity to keep your system running. A power outage would be disastrous. You also need to constantly monitor the system to make sure the environment stays optimal for planting.
For investors seeking to invest in agriculture and food, hydroponics is an area to check out. And for the more aggressive and speculative investors in the crowd, know that hydroponics is also a marijuana play because it’s a popular way to grow pot.
Back in the day, someone secretly growing pot probably used hydroponics in the basement or in a shed, but nowadays thanks to cannabis being legal in many states, it’s widely and openly used to grow marijuana.
Successful marijuana investors are those that look behind the headlines of the “green rush” to focus on disruptive technologies, unexpected innovations, and proprietary technology. As such, hydroponics is a safer “picks-and-shovels” play on the global cannabis industry.
A Note From The Publisher: Our colleague Scott Chan just provided you with valuable investing insights. His topic about hydroponics is directly relevant to the fast-growing marijuana industry.
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