FAO: Understanding Commercial Urban Agriculture An Overview

Urban agriculture in general appears to be a valid investment option to support the sustainable development of urban areas and food security, and to enhance the overall resilience to climate shocks of people and infrastructures.

Jacopo Monzini
Food And Agriculture Organization Of The United Nations
Francesco Orsini
University Of Bologna Alma Mater Studiorum
Food And Agriculture Organization Of The United Nations
Rome, 2025

Executive summary excerpt:

Over the past 20 years, the urban farming sector has rapidly evolved into a capital-attracting business. It is experiencing unprecedented growth and venturing into new areas such as production of raw materials for the food processing and pharmaceutical industries.

Comparisons between commercial urban agriculture (CUA) operations at the sector level are particularly difficult, due to a large variety of business models, strategies, and deployed technologies. In addition, many CUA claims, especially those related to profitability, lack verifiability. While literature confirms assertions about potential productivity, product quality, extended shelf-life, and some environmental benefits, a comprehensive analysis of profitability is absent due to the lack of data and of agreed standards of comparison. Consumer acceptance and willingness to pay higher prices for urban agricultural products also remains only partially explored.

Given their high yield performances (e.g. up to 700 kg/m2/year1 of leafy greens), commercial urban farms are typically located close to logistic infrastructures with quick access to food distribution hubs and retailers, but not necessarily within city centres where they could claim to be “km zero.” Instead, they are most prevalent in the peripheral areas of large cities, often in dismissed industrial areas.
For high-tech farms in a CUA setting, preferred crops are those with a high harvest index2 such as leafy greens, herbs and microgreens.3 This is due to the high capital expenditures (CapEx) – up to EUR 3000 per m2 – and high operational expenditures (OpEx) – up to EUR 500 per m2 per year – of these farms (Kusuma et al., 2022a; Pedersen 2022). Most high-tech farming in CUA is performed in large, fully controlled environments (70 percent) (Appolloni et al., 2022). Though various approaches are used, nearly half of all high-tech farming takes the form of vertical farming (40–50 percent), with growing surfaces generally larger than 1000 m2 and the deployment of advanced equipment for lighting and climate control (Appolloni et al., 2022) leading to values of energy consumption for unit of product of around 4.5 and 2.5 kWh /kg for vertical farm and greenhouse cultivation respectively (Stanghellini and Katzin, 2023). Already high on average, operational costs can be further impacted by external shocks, especially those affecting energy prices. In these circumstances, even though CUA farms are increasing their capacity to produce a diverse range of crops, in practice, only a few can be produced at affordable costs: leafy greens, herbs and microgreens.

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