The economic viability of commercial-scale hydroponics: Nigeria as a case study

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F60076658%3A12520%2F23%3A43906592" target="_blank" >RIV/60076658:12520/23:43906592 - isvavai.cz</a>

Result on the web

<a href="https://doi.org/10.1016/j.heliyon.2023.e18979" target="_blank" >https://doi.org/10.1016/j.heliyon.2023.e18979</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1016/j.heliyon.2023.e18979" target="_blank" >10.1016/j.heliyon.2023.e18979</a>

Result language

angličtina

Original language name

The economic viability of commercial-scale hydroponics: Nigeria as a case study

Original language description

The use of hydroponics to cultivate economic crops is an emerging agricultural practice in Nigeria. There is, however, a paucity of information on the economic viability and valuation of the production systems. This study investigated hydroponics&apos; profitability and economic viability under small-and medium-scale production systems. The economic viability of ten hydroponic farms were evaluated using the financial metrics: net present value (NPV), internal rate of return (IRR), benefit-cost ratio (BCR), and sensitivity analysis. Sensitivity analysis based on positive and negative changes in the running cost and gross annual revenue was adopted to measure the robustness of the production method. The positive NPVs of the small-scale farmer (euro42,895) and medium-scale farmer (euro331,465) at a 15% discount rate show that both production scales are economically viable. The ten-year IRR of both production scales was about 83%. Similarly, the BCR showed that both the small-scale farmers (5.07) and the medium-scale farmers (4.91) are significantly profitable. In the sensitivity analysis, the small-scale farmers were more sensitive to recurrent 5% changes in the running cost at the 13% threshold. On the other hand, medium-scale farmers were less sensitive with a threshold value of 58.4%. Similarly, small-scale farmers are more sensitive to a 15% reduction in the gross annual revenue, with a negative net return of -euro956. It is imperative to state that, though starting an investment in hydroponics requires a high initial investment, medium-scale farmers would be less sensitive to changes in the running cost of production in the face of uncertainties.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

40401 - Agricultural biotechnology and food biotechnology

Project

<a href="/en/project/LM2023038" target="_blank" >LM2023038: South Bohemian Research Center of Aquaculture and Biodiversity of Hydrocenoses</a><br>

Continuities

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)<br>S - Specificky vyzkum na vysokych skolach

Publication year

2023

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Heliyon

ISSN

2405-8440

e-ISSN

2405-8440

Volume of the periodical

9

Issue of the periodical within the volume

8

Country of publishing house

US - UNITED STATES

Number of pages

10

Pages from-to

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UT code for WoS article

001059389200001

EID of the result in the Scopus database

2-s2.0-85166979086