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Assessing the Different Economic Feasibility Scenarios of a Hydroponic Tomato Greenhouse Farm: A Case Study from Western Greece

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  • Efstratios Michalis

    (Agricultural Economics Research Institute, Hellenic Agricultural Organization—DIMITRA, Kourtidou 56-58, 11145 Athens, Greece)

  • Christina-Eleni Giatra

    (Agricultural Economics Research Institute, Hellenic Agricultural Organization—DIMITRA, Kourtidou 56-58, 11145 Athens, Greece)

  • Dimitrios Skordos

    (Agricultural Economics Research Institute, Hellenic Agricultural Organization—DIMITRA, Kourtidou 56-58, 11145 Athens, Greece)

  • Athanasios Ragkos

    (Agricultural Economics Research Institute, Hellenic Agricultural Organization—DIMITRA, Kourtidou 56-58, 11145 Athens, Greece)

Abstract

Among other agricultural systems that can contribute to sustainable food production, hydroponic systems are constantly gaining attention in terms of their economic viability and sustainability, while their ability to produce nutritious food has become more apparent in recent decades. The purpose of the study is to shed light on the potential of hydroponics to conduce sustainable food production systems, by focusing on the economic evaluation of a hydroponic greenhouse farm located in Western Greece. Particularly, the study aims at presenting an investment plan for a greenhouse farm of a total acreage of 0.2 hectares, where fresh tomato will be produced via hydroponic methods. The appraisal of the economic viability of the investment plan covers a 5-year period, while the Net Present Value (NPV) and the Internal Rate of Return (IRR) are used as criteria of feasibility and performance assessment. The study uses detailed technical and economic data—related to all costs and benefits deriving from the annual operation of the greenhouse farm—to assess three different economic feasibility scenarios based on the range of input, energy and product prices, taking into account the high volatility governing agricultural markets. The results show that economic viability is achieved during the 5-year assessment period in most scenarios, which is mainly due to the efficiency of the hydroponic systems. Investment performance indicators are adverse only for an “extreme” scenario with increased installation and production costs that are not counterbalanced by higher product prices or by financial support from the State. Despite the promising perspectives of hydroponics in Greece, its use is not yet widespread within the country. Further research should explore ways to increase adoption of such production methods, considering that immediate action is needed worldwide to improve the resilience of the food industry and promote environmentally friendly food production systems.

Suggested Citation

  • Efstratios Michalis & Christina-Eleni Giatra & Dimitrios Skordos & Athanasios Ragkos, 2023. "Assessing the Different Economic Feasibility Scenarios of a Hydroponic Tomato Greenhouse Farm: A Case Study from Western Greece," Sustainability, MDPI, vol. 15(19), pages 1-14, September.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:19:p:14233-:d:1248151
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    References listed on IDEAS

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    1. Georgios K. Ntinas & Filippos Bantis & Athanasios Koukounaras & Panagiotis G. Kougias, 2021. "Exploitation of Liquid Digestate as the Sole Nutrient Source for Floating Hydroponic Cultivation of Baby Lettuce ( Lactuca sativa ) in Greenhouses," Energies, MDPI, vol. 14(21), pages 1-16, November.
    2. Terrance M. Hurley & Xudong Rao & Philip G. Pardey, 2014. "Re-examining the Reported Rates of Return to Food and Agricultural Research and Development," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1492-1504.
    3. Dimitra I. Pomoni & Maria K. Koukou & Michail Gr. Vrachopoulos & Labros Vasiliadis, 2023. "A Review of Hydroponics and Conventional Agriculture Based on Energy and Water Consumption, Environmental Impact, and Land Use," Energies, MDPI, vol. 16(4), pages 1-26, February.
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