An Economic Study of Vegetable Protected Hydroponics On Small Farms (A Case Study On Vegetable Protected Hydroponics In Giza Governorate)

Abstract

The study examines the potential of hydroponic agriculture in protected greenhouses as a means to enhance food security in regions with limited water resources. It involved personal interviews with vegetable farm owners and technical experts, and conducted an exploratory study of 12 hydroponic farms, focusing on a 360 m2 greenhouse as a case study. The research aimed to analyze production costs, returns, break-even points, and net added value to assess the efficiency of this technology in Egyptian agricultural conditions, as well as the obstacles preventing its widespread adoption. In the case of the 360 m2 greenhouse, the total production costs for the first year were 945.7 thousand pounds/unit, decreasing to 545 thousand pounds/unit for subsequent production periods. Annual revenue was 760 thousand pounds/unit, resulting in a favorable return on investment (R/C ratio of 1.13) and profitability (B/C ratio of 1.22). The net present value was 586.37 thousand pounds, with an internal rate of return (IRR) of 81% and a payback period of 1.55 years. The study also highlighted the need for expansion or the addition of new production activities to maintain profitability beyond the fifth year. Obstacles to the widespread adoption of hydroponic agriculture included the scarcity of skilled labor, high costs of nutrients and seed/seedlings, increasing energy and fuel prices, and competition with open-field crop production. In conclusion, the study demonstrated the economic viability and efficiency of hydroponic agriculture in protected greenhouses under Egyptian conditions, while also identifying key challenges that hinder its wider implementation.