Washington Insider -- Friday

Indoor Agriculture Seeing More Investment

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

USTR Tai Raises GMO Approvals with Mexican Officials

U.S. Trade Representative Katherine Tai met with Mexican Agriculture and Rural Development Secretary Victor Villalobos and Economy Secretary Tatiana Clouthier on Wednesday in Mexico City, raising several ag-trade-related issues.

Tai "emphasized the importance of Mexico immediately resuming the authorization of biotechnology products," according to a brief readout of the session. However, it is not clear that Tai raised a key issue on GMOs -- the proposed ban on imports of GMO corn by the end of 2024. That issue remains clouded in uncertainty.

Reuters reports that Villalobos has been pushing for feed corn to be exempted from the ban, a key situation given that Mexico imports around 16 million metric tons of corn (630 million bushels) from the U.S. to feed its livestock sector. Villalobos has assured USDA Secretary Tom Vilsack that there would be an exemption for U.S. corn used for feed, but the news service reported that his push within the Mexican government may be losing traction. Reuters quoted sources saying that Villalobos' deputy at the ag ministry, Victor Suarez, is pushing against the GMO corn imports across the board. An issue that Tai did raise relative to Mexico failing to approve new GMO corn varieties, also threatens to impact U.S. corn exports.

But even the issue of GMO crop approvals could become a trade issue as there could be blockages of imports of corn into Mexico if they are from GMO varieties that the country has yet to approve. That is a situation U.S. corn farmers have faced in other markets before.

USTR Tai Discussed Aligning Ethanol Policies With Mexico

Discussions between U.S. Trade Representative (USTR) Katherine Tai and top Mexican trade and agricultural officials included biofuels policies between the two countries.

In a recap of the session issued by the Office of the U.S. Trade Representative, the officials discussed several ag-trade issues, but "they also discussed the potential mutual benefits of aligning Mexico and the United States' policy on ethanol gasoline blends."

There was little detail offered in terms of what specifically "aligning" the two countries' policies would mean. But U.S. biofuel interests would no doubt welcome actions that would boost their ability to sell biofuels into a market that is geographically easy to reach.

Washington Insider: Indoor Agriculture Seeing More Investment

Urban agriculture has been rising in popularity even if it still makes up only a tiny part of the overall ag production picture. But the Wells Fargo Innovation Incubator is putting money toward five agricultural-technology startups that aim to develop process to make indoor farming more sustainable.

Under the effort, the five startups would receive up to $225,000 each for their processes. Bloomberg reports one of the startups will include a genomics company and lighting-efficiency developer. They are seeking to work with the Department of Energy (DOE) National Renewable Energy Laboratory and the Donald Danforth Plant Science Center in St. Louis, Wells Fargo said.

The bank innovation center noted that the combination of land degradation and water shortages are potentially threatening the ability of agriculture to meet global food demand based on the expectation that demand will rise 60% within the next 30 years.

While not currently a viable alternative, Wells Fargo said that indoor farming "could be a reliable food source and can be tailored to demographics and tastes, but typically produces more greenhouse-gas emissions than field-grown crops."

That greenhouse gas (GHG) emissions issue is a major focus right now for the Biden administration as they are targeting those emissions in their efforts to address climate change. That would be a key situation if there is to be any future for a growth in indoor farming.

Indoor farming "has not met the bars of being environmentally sustainable at the moment," Claire Kinlaw, director of innovation commercialization at the Donald Danforth Plant Science Center, told Bloomberg in an interview. "We have to get past that."

Two efforts would also seek to make lighting more efficient relative to indoor farming. SunPath and GroFlux are seeking to address those issues to meet challenges where things like tomatoes grow and create a canopy that can block the light. Bloomberg noted that SunPath aims to use fiber optics and tracking technology to get light to reach all the way to the ground.

GrowFlux, on the other hand, would use existing LED lighting in a way that allows farmers to control light delivery to plants. They believe this would bring about an average energy savings of 20% to 30% for indoor farming efforts.

Atlas Sensor Technologies focuses on water issues and would be looking at monitoring water hardness in rea-time with its ion exchange fiber-based technology. The goal is to reduce the cost and waste while improving how water softeners operate.

Motorleaf would put attention on using artificial intelligence for indoor agriculture to provide greenhouse operators and those in the supply chain ways to optimize yields and lower their carbon foot print.

New West Genetics is expecting to focus on proprietary, stable, high-yielding breed varieties for sustainable hemp production, delivering a highly productive crop that can support food, feed, biomass and specialty products for an expanding population.

The effort now includes some 56 startups.

Indeed these efforts could perhaps bring some shifts in the agricultural production situation and make it easier for urban agriculture to gain a foothold in heavily populated areas. And the challenges of energy use also loom large as the current indoor growing efforts require a fair amount of energy to replace what the sun provides.

If these startups can provide success and bring some real-time results that can be demonstrated and most importantly replicated in an economically viable fashion, that could get the attention of policymakers. That could allow such efforts to start ups to nudge into the world of farm policy. After all, urban agriculture and specialty agriculture have their backers in Congress that would no doubt welcome these efforts if they can prove successful.

So we will see. Their efforts will hinge on one key factor and that is getting their effort to become commercially viable and that will be a key issue to monitor as these efforts move forward if they are to become any kind of alternative for certain kinds of food production, Washington Insider believes.

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