Controlled Environment Agriculture (CEA) Production
August 31, 2023
Controlled Environment Agriculture (CEA) Production
The 2018 farm bill (Agriculture Improvement Act of 2018,
factors such as temperature, light (intensity and quality), air
P.L. 115-334) expanded support for “urban agriculture and
movement, humidity, carbon dioxide levels, and damage
innovative production methods like indoor and rooftop
from disease and pest infestations. Some advanced systems
farming.” In a Joint Explanatory Statement, the farm bill
are fully automated and employ robotics. Some systems
conferees acknowledged the potential for urban and
may integrate blockchain with system sensors, for example,
innovative production methods to create new market
to chronologically record and provide more precise crop
opportunities for agricultural communities, expand access
treatments (e.g., light, fertilizers, systems controls) as well
to fresh food in low-income communities, improve
as record steps in the supply chain (e.g., harvest date,
availability of fresh products year-round, and “help build a
packaging, transport). Accordingly, advanced technology-
new generation of farmers.” The 2018 farm bill also
based CEA systems require knowledge of engineering,
expanded some existing programs administered by the U.S.
chemistry, plant science and physiology, horticulture, plant
Department of Agriculture (USDA) to support innovative
pathology and entomology, and computer systems. CEA
and emerging crop production methods. These actions have
systems, however, may be scaled for smaller-sized
expanded USDA’s attention on a range of nonconventional
installations at local community grow operations or schools.
farming practices including Controlled Environment
Agriculture (CEA). Congress may consider amendments to
these programs as it debates farm bill reauthorization.
Selected CEA Production Systems
CEA-Related Terms and Definitions
• Hydroponic systems: Growing plants without soil using
a water-based nutrient solution.
Innovative and emerging crop production encompasses a
variety of cultivation techniques and alternative modes of
• Aeroponic systems: Growing of plants by suspending
production compared to that of more traditional outdoor
their roots in the air and regularly misting the roots with a
open-field production in a mostly land-based rural
water and nutrient solution.
environment. Examples of some of the types of innovative
• Aquaponic systems: Combines plant growing with fish
and emerging systems include indoor vertical technology
or aquaculture production using wastewater from the
operations, outdoor vertical production systems such as
aquatic species to fertilize a connected plant system.
rooftop farms and green walls, and high-technology shade
• Vertical systems: Growing crops in vertically stacked
or greenhouse production. These types of operations may
layers on top of each other or in tall towers (rather than
involve large capital-intensive production systems that
horizontal open-field rows). Vertical farming may use soil
grow crops throughout the year as well as smaller-scale
or soil ess techniques such as hydroponics or aeroponics.
community-based operations located in urban, suburban,
and peri-urban areas or in urban clusters that grow crops for
a mostly local or nearby consumer market.
Many have documented the challenges associated with
CEA systems. These include typically high initial capital
Myriad definitions exist of controlled environmental
investment and variable costs, high energy demand and any
agriculture (CEA) from various land-grant universities,
associated carbon emissions, water availability, plant pest
system developers, and trade organizations. CEA
and disease challenges, disposal of chemical fertilizer and
production systems are not defined in statute or regulation.
nutrient waste, and the need for a technically skilled labor
CEA generally refers to the growing of crops and plants in
force. Others point to the benefits of CEA systems and its
a protected and controlled environment, often indoors and
potential to supplement traditional open-field farming.
using advanced technologies and intensive growing
Benefits include protection against weather-related grow
conditions throughout the year. Common indoor techniques
challenges, more precise targeting of production inputs
may employ a vertical grow system using a soil-less system
(water, land, and other natural resources), opportunities for
such as hydroponic, aeroponic, or aquaponic production
higher yields and overall output (given the efficient use of
systems (text box). CEA may also be soil-based, growing
space and tight planting densities), less weed management,
crops in greenhouses, hoop houses, growth chambers, or
decreased prevalence of some food safety concerns,
shade structures as well as the use of mulches, plastic film,
reduced food loss and waste, and the ability to grow crops
nets or row covers to protect field-grown crops.
year-round often with multiple harvests per year (reducing
seasonality and supply variability). Some further highlight
CEA systems are designed to create optimal growing
possible environmental and societal benefits. These include
conditions for and maximum productivity of crops and
reduced land use, ability to grow crops on nonarable land
plants, usually in an intensive closed-loop system. Most
(where soil may be unsuitable), reduced use of pesticides
systems employ artificial lighting and water and ventilation
and herbicides, less runoff and soil erosion (compared to
controls to allow for the stable control of environmental
some open field operations), reduced transportation needs
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Controlled Environment Agriculture (CEA) Production
(if operations are located near consumer markets), and
including the use of CEA practices as part of a small-scale
opportunities for local food system development.
production in food insecure areas (§4206; 7 U.S.C. §7518).
Overview of CEA Sector
Other existing USDA programs may support CEA systems,
The 2018 farm bill directed USDA to conduct “data
even if not explicitly so. In general, CEA operators may
collection of urban, indoor, and emerging agricultural
access USDA grants and loans broadly available to U.S.
production (§7212). Congressional appropriators have also
farmers; however, most federal grants and loans tend to
directed USDA to collect data on these types of operations
target smaller-sized businesses and may be insufficient to
in the periodic Census of Agriculture (H.Rept. 116-107).
meet the needs of larger CEA growers/developers. For
USDA does not currently maintain data and information on
example, grants under the Local Agricultural Marketing
urban, indoor, and emerging agricultural production,
Program (LAMP) mostly target locally-based operations
including the use of CEA or vertical farming systems.
and Small Business Administration loans target small
business. CEA developers might also not be eligible for
A 2021 USDA-commissioned report found that nearly
USDA farm loans that target family-sized farms and
3,000 fruit and vegetable operations grow crops under
ranches. Support for high-tunnels and energy efficiency
CEA-type protection, accounting for 2-3% of the value of
practices may be eligible under USDA conservation
U.S. crops. This estimate excludes mushroom and indoor
programs. Educational and technical support also is
cannabis production or aquaculture. Leading CEA-grown
available through USDA’s Urban Agriculture Office or
crops are typically higher-value crops such as leafy greens,
county cooperative extension offices. For background on
herbs, microgreens, berries, vine vegetables (cucumbers,
USDA and other federal programs, see CRS Report
tomatoes, peppers), mushrooms, flowers and nursery crops.
R46538, Local and Urban Food Systems: Selected Farm
Some industry estimates suggest there may be more than
Bill and Other Federal Programs, and CRS Report
2,000 vertical farming operations in the United States.
R47387, Federal Economic Development Resources for
Food Businesses and Systems: In Brief.
CEA operations represent a diverse range of systems and
practices, spanning large capital-intensive operations and
USDA has continued to commission research supporting
smaller-scale community-based operations. Larger-scale
CEA growers. Leading research areas cover hydroponic and
operations tend to be commercial grow operations and/or
vertical farming growing applications; LED light spectrum
proprietary technology and growing platform developers.
impact analysis on plant growth; use of renewable energy;
Some are publicly-traded companies. Hybrid operations
nutrient optimization; plant pathology; plant breeding and
that both grow crops and are engaged in research and
selection; pollinator experiments; and automation
development (R&D) as technology developers might grow
processes. USDA is also supporting projects to improve
crops mainly for demonstration or investment purposes
CEA efficiencies, lower the carbon intensity of resource
(i.e., not directly engaged in commercial farming). Some
inputs, educate consumers and producers to CEA products
companies operate plant science research facilities.
and practices, and develop CEA “best practices” guides.
In the past year, the CEA sector has been marked by high-
Considerations for Congress
profile operation closures, layoffs, and bankruptcies both in
At a March 2022 House Committee on Agriculture hearing,
the United States and globally. Among the cited reasons for
a CEA representative stated there are opportunities to
these current challenges is a perception that the sector may
support CEA “in nearly every title” of the farm bill.
have been built out too quickly given the initial sizable
Recommendations focused the Horticulture and the
influx of venture capital and private investment funds in
Research titles, but noted opportunities in the Nutrition,
recent years. This has caused some companies to become
Credit, Rural Development, and Energy titles. Two
financially overleveraged. Some identify exaggerated
recommendations were (1) expand LAMP to explicitly
expectations for growth in the marketplace. Others cite a
cover CEA and indoor vertical farming; and (2) increase
perceived tendency to prioritize R&D and emphasize the
funding for USDA’s research and extension support for
construction of ever-larger grow facilities without a focus
urban, indoor and emerging agriculture. Others note
on business fundamentals, market testing and viability, and
opportunities for CEA in programs such as the Small
efforts to reduce high start-up and variable costs in the
Business Innovation Research program and initiatives that
sector. While some claim recent bankruptcies, layoffs, and
leverage public and private research partnerships. Other
closures represent an inevitable market correction, this has
legislative priorities have been put forward by the trade
raised questions about the near-term viability of the sector.
association, CEA Alliance. Its legislative priorities include
ensuring CEA producers are specifically eligible for USDA
Provisions in Farm Bill Legislation
loans and grants, ensuring CEA’s eligibility under USDA’s
Congress expanded support for innovative and emerging
rural development and conservation programs, and
agriculture in the 2018 farm bill. It created the Urban
expanding USDA’s Specialty Crop Research Initiative to
Agriculture and Innovative Production (UAIP) to encourage
prioritize innovation and technology and increase research
and promote urban, indoor, and emerging farming practices,
and extension services for CEA systems. CEA Alliance also
and also authorized UAIP project grants (§12302; 7 U.S.C.
recommends codifying USDA’s Food Supply Chain
§6923). It further authorized competitive grants supporting
Guaranteed Loan program that was part of the Biden
research, education, and extension activities for the sector
Administration’s Build Back Better Plan. Congress may
(§7212; 7 U.S.C. §5925g). Congress also established a
consider these and other options as it debates the farm bill.
micro-grants program to support locally-grown food,
Renée Johnson, Specialist in Agricultural Policy
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Controlled Environment Agriculture (CEA) Production
IF12485
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