Urban farming has been championed as a way of improving agricultural environmental sustainability, but in truth it can have both positive and negative effects and it comes down to the way that farms operate and are regulated. Farms can provide a more efficient way of meeting local demand. If operated sustainably, they can reduce both the agricultural energy footprint (through eliminating the need to store and transport imported products) and the water footprint (through sustainable irrigation and water recycling). They can also transform wasteland into productive green space and stop it from becoming polluted. Vertical farms, which are set up inside multi-storey buildings and warehouses, also have the benefit of saving on space.

But studies have shown that urban farms can also increase energy and water use. Indoor farms, such as vertical farms, use energy-intensive artificial lighting and climate control systems. Many farms use the municipal water supply rather than a recycled water system for irrigation. There are also distinct health and safety risks with urban farming. Urban land can be contaminated with pollutants, while wastewater if not treated properly can contain human pathogens. This can compromise food safety if strict regulations are not in place.