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

Kód výsledku v 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>

Výsledek na webu

<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>

Jazyk výsledku

angličtina

Název v původním jazyce

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

Popis výsledku v původním jazyce

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.

Název v anglickém jazyce

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

Popis výsledku anglicky

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.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

40401 - Agricultural biotechnology and food biotechnology

Projekt

<a href="/cs/project/LM2023038" target="_blank" >LM2023038: Jihočeské výzkumné centrum akvakultury a biodiverzity hydrocenóz</a><br>

Návaznosti

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

Rok uplatnění

2023

Kód důvěrnosti údajů

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

Název periodika

Heliyon

ISSN

2405-8440

e-ISSN

2405-8440

Svazek periodika

9

Číslo periodika v rámci svazku

8

Stát vydavatele periodika

US - Spojené státy americké

Počet stran výsledku

10

Strana od-do

—

Kód UT WoS článku

001059389200001

EID výsledku v databázi Scopus

2-s2.0-85166979086