Hydroponic Farming Cost and Profit Analysis

Hydroponic Farming Cost and Profit Analysis:

INTRODUCTION TO HYDROPONIC FARMING COST AND PROFIT:

The soilless farming technique which is gaining popularity these days is called hydroponic farming. This technique makes use of water soluble nutrient mixture for growing fruit, vegetable or flowering plants. Generally in conventional farming technology the soil soaks and stores the nutrients that are supplied and the plants in turn take the nutrients from the soil. But in the hydroponic method of farming plant roots get in direct contact with the water soluble nutrient content and this helps in faster absorption and growth. The idea of hydroponic farming is believed to serve two purposes, one is it can be practiced by people to grow fresh fruits and vegetables where the soil condition is not suitable for conventional farming, second it is a solution for satisfying sustainable food requirements in urban areas where the land for conventional farming is not easily available due to other commercial business ventures. Hydroponic farming is being considered as a revolution in the farming or agriculture industry because of its capability to produce surplus food. This farming technique is environment friendly as there is no much use of chemicals in the form of pesticides and insecticides. Growing plants hydroponically needs an environment which can be controlled as per the requirement. This kind of controlled set up for the cultivation of crops eliminates the danger of critical warm climatic conditions on agriculture. Experts believe that the greenhouse hydroponic farming is a perfect one stop solution to all farming and food related problems. Most of the people are showing interest to set up hydroponic systems at their homes. Even one can have the commercial hydroponic farming systems for good profits. The following information describes the Hydroponic Farming Cost and Profit.

HYDROPONIC FARMING COST AND PROFIT – ADVANTAGES OF HYDROPONIC FARMING SYSTEMS

There are several advantages of hydroponic farming over other traditional methods:

  • A proper well planned design of a hydroponic system reduces the risk of water and nutrients. It is estimated that the use of land in hydroponic farming is reduced by 50% and use of water is reduced by 90%. Therefore it is highly beneficial in areas where water is scarce and land is limited.
  • The diseases caused by the soil structure in traditional agricultural techniques is absent in hydroponic farming. Also the other aspects like tilling the soil, weeding, and maintaining the sanitation is greatly reduced in hydroponic farming.
  • The space required for hydroponic farming is comparatively low. The spacing between plants is also less which ensures that large production can be done in a small area. Concepts like crop rotation and other soil conservation methods can be ignored.
  • The efficiency of the hydroponic system depends on the fact that plants are provided with materials that are needed for their growth. The investment is a little higher but the yield is expected to be four times higher than the conventional methods. The produce from the conventional farms is seasonal but from a hydroponic farm it is unseasonal.
  • The crops don’t need much time for harvesting. The process is much quicker when compared to other techniques.

HYDROPONIC FARMING COST AND PROFIT- PROS AND CONS OF HYDROPONIC FARMING:

Pros and Cons of Hydroponic Farming System.
Pros and Cons of Hydroponic Farming System.

Pros:

  • High productivity.
  • More eco-friendly.
  • Suitable or flexible in areas with less water and space.
  • Less transportation facilities required.
  • Monoculture is not considered a problem.

Cons:

  • High set up costs.
  • High maintenance costs.
  • The system is vulnerable to power failures, nutrient and pH imbalances etc.
  • Regular monitoring is highly essential.
  • The technique needs expertise due to the involvement of complicated methods such as creating a balanced nutrient mixture etc.

To overcome the high set up and maintenance costs of the hydroponic system there has been a system developed called the ‘simplified hydroponics. This system was launched by Ms Peggy Bradley in the United States and was brought to India under the name of ‘Pet Bharo’ programme. The main aim of the institute of Simplified Hydroponics was to relieve people from poverty and hunger. As it was launched in India the core purpose of the project was to empower the disadvantaged class of people by training, educating, motivating and micro-financing them to have a sustainable means of livelihood. This method of simplified hydroponics can be initiated in a small area and gets adapted to the conditions of urban areas. This method favours the people in the following ways.

  • Isolation from the soil and cultivation at a convenient level.
  • Water along with low cost substrates such as sand, rice husk and pumice etc are used.
  • Balconies, kitchen gardens, rooftops are the places that can be used for simplified hydroponics
  • Recycling of water is done so that the environment doesn’t get polluted.
  • Any disease or pest is controlled by natural herbal treatments. No chemicals used.
  • Higher yield in less time and multiple harvests results in greater output.
  • Easy to understand methods and less technological involvements.
  • Use of recycled materials.
  • Source of income to the family.
  • Safe food for consumption with high biological and dietary value.
  • Household food needs are achieved by fresh and nutritious food.
  • Shade net (shade to sun ratio) and polythene sheet can be used to protect the plants from sun and rain respectively.
  • The use of neem or garlic sprays, grease anointed plywood insect traps etc keeps the pests, weeds and other pathogens away.
  • It is estimated that a 20 square metre of land can produce 2 kg of vegetables which can cost around 110- 120 USD.

HYDROPONIC FARMING COST AND PROFIT – EQUIPMENT REQUIRED FOR HYDROPONIC FARMING:

There are various techniques or types of deploying a hydroponic farm: the wick system, water culture, ebb and flow system, drip system, nutrient film technique and the aeroponic technique. A basic system of hydroponics may require the following equipment which may change depending on the size of the farm and the technique being used.

Types Of Hydroponic Farming System.
Types Of Hydroponic Farming System.
  • Plastic trays for the medium, nutrient solution and the plants
  • A table or elevated stand to hold the trays.
  • A container to hold the nutrient mixture.
  • A pumping cable or pipe which can pump 500 litres per hour.
  • Small pots with holes to hold the plants.
  • Growing medium if necessary.
  • Drainage tube.
  • Timer, thermometer and other sensors.
  • Seeds or plant cuts
  • Nutrient solutions.
  • pH metre.
  • Induction lights.
  • LED grow lights.
  • Beneficial insects
  • Sprayers.

HYDROPONIC FARMING COST AND PROFIT – MATERIALS REQUIRED FOR HYDROPONIC FARMING:

The most important requirement of this system of farming is the nutrient solution and it is easily available at gardening centers. The nutrient solution should be a blend of important elements such as the nitrogen, potassium, calcium, magnesium etc. the nutrient solution to be used changes with the type of crop being cultivated.

Hydroponic farming can be done either with a medium or without the medium. Rock wool is the widely used medium because it is affordable and drains easily. Other mediums that can be used for farming are clay, vermiculite, sand, gravel and Perlite. Water circulation is not easy with sand gravel and clay as they are heavy but easily available. Perlite and vermiculite are effective.

Light is also an important factor for photosynthesis and the growth of plants. High density discharge lights can sometimes be used during the farming when adequate sunlight is not available. The use of light from various sources has different effects and is therefore used according to the plant type. Light from metal halides is used for young and green leafy plants. For fruit and flowering plants light from high pressure sodium lights is used.

The monitoring of the pH levels in the nutrient solution is also equally important because it specifies the acidity or alkalinity of the environment. A pH test meter is used to check the levels of the solution.

HYDROPONIC FARMING COST AND PROFIT – LIST OF PLANTS CULTIVATED USING HYDROPONIC FARMING:

Hydroponic System (Pic Source Flickr).
Hydroponic System (Pic Source Flickr).

The list of plants mentioned here are the ones that can be easily grown in hydroponic system. The root plants are difficult to be cultivated in a hydroponic system. The list is not limited to these vegetables.

Greens: Spinach, chard, cabbage, lettuce, celery, mint etc.

Vining plants: Tomatoes, Cucumbers, peas etc.

Root plants: Potatoes, carrots, radish etc

Fruits: raspberries, strawberries, small papaya, peppers, blue berries etc

Herbs: basil, parsley, rosemary, chives, sweet marjoram, watercress, dill etc

HYDROPONIC FARMING COST AND PROFIT – ESTIMATION OF COST IN HYDROPONIC FARMING:

An example estimate for farming tomatoes in a hydroponic green house (3072 square feet) set up is given here. The cost of the equipment and facilities may vary depending on the location and dimensions of the site. The fixed costs include the investment for the green house structure and the setting up of the environmental control equipment.

ITEM TOTAL COST PER YEAR (in Dollars, $)
Material and labour for 10% floor and labour i.e. 307.2 sq ft @ $ 2/ sq ft614.40
Ground cover @ $ 0.08/ sq ft207.36
Site preparation, frames, doors, poly and ends plus the construction and installation cost approximately amount to @ 1 house12,000
Total costs in $

 

20% maintenance of the total costs annually

12,821.76

 

2564.35

Generator for a single bay4,000
Cooling equipment for a single setup

 

1,850
Horizontal air fans1,000
Electrical panel setup1,500
Environmental control equipment and other miscellaneous building needs4,000
Heaters, Poly inflation kit, low voltage wiring package and protective equipment2,525
Total equipment cost annually

 

20% of the equipment cost amount to the maintenance of the equipment

14,875

 

2,975

Growing and delivery equipment  cost include sprayer @ $ 100/unit, carbon di- oxide generator @ $ 480/ unit, pump @ $ 30/unit, feeding system, cooler and transport11,810
EC meter @ $ 160/unit, pH meter @ $ 50/unit, thermometer @ $ 25/unit, humidity sensor @ $ 120/unit, CO2 sensor @ $ 500/unit, measurement scales @ $ 100/unit955
Total costs annually

 

20% of the total cost is spent on maintenance

12, 765

 

2,553

 

TOTAL ANNUAL FIXED COSTS IN $8192.35

The variable cost for the hydroponic farming are calculated on production supplies, labour, packaging, utilities and other marketing needs. Per unit value of the item may change depending on the demand and location of the market. A rough estimate of each unit is mentioned here to determine the overall cost of the production.

SUPPLIES FOR PRODUCTION ANNUAL COST in USD ($)
Beneficial insects include (lacewing, 6 packs @ $ 36/ pack; Encarsia Formosa, 3 packs @ $ 23/pack; aphidus colemani, 1 pack @ $ 48/pack; bees, 3 hives @ $ 75/hive)558
Fertilizers ( blended mix 429 pounds @ $ 1 /pound; calcium nitrate 429 pounds @ $ 0.4/pound; additional mix 7 pounds @ $ 1/pound; pesticides 7 gallons @ $ 7/gallon; sanitizer 1 gallon @ $ 35/gallon; Rockwool cubes 1 case @ $ 159/case; Rockwool slabs 29 bags @ $ 62/bag)2,673
Seeds I pack @ $ 107/pack107
Seedling support mats, I mat @ $ 114/mat114
10 trays @ $ 1 /tray , sticky traps 1 pack @ $ 30/pack40
1 case of clips @ $ 83/case, 1 twine box @ $ 22/box, 800 hooks @ $ 0.15/hook225
Total cost in $3,717.72

Labour cost for the production depends upon the working hours and the pay per hour of work which may range in between 5 hrs/year to 590 hrs/year.

Average annual working hours 759.5 @ $ 8.4/ hour: $ 6425.82

Utilities such as fuel, electricity, water etc may be charged according to the location of the hydroponic farm. Different countries and places have different rates for using 1 kilowatt of power per hour. Also the fuel price may vary from place to place.

UTILITIES COST in USD ($)
Natural gas 545/1000 cubic feet @ $ 10/ 1000 cubic ft5,450
Electricity for fan and lights 12500 kilowatt-hr @ $ 0.08/kwh1,000
100000 gallons of water170
Other charges like telephone etc1,080
Total cost in $7,700

 

PACKAGINGCOST in USD ($)
17 label rolls @ $ 30/roll, 66 cases of foam trays @ $ 31/case and 1970 boxes @ $ 0.65/box510+2046+1280.50
Total costs in $3836.50

Other Miscellaneous costs include advertising, office supplies, laboratory fees, internet service, marketing, training, software etc and amount to,

Miscellaneous costs: $ 2870.00

Accountant and lawyer charges: $ 750 (approximately).

Land rent charges: $ 100/acre.

Total variable costs: $ 25300.05

From the above data it is derived that:

ANNUAL FIXED COSTS ARE: $ 8192.35

ANNUAL FIXED PLUS VARIABLE COSTS ARE: $ 33,492.40

NO OF PLANTS IN THE SYSTEM: 691

NUMBER OF FRUITS PER PLANT: 30 POUNDS (WITH 5% WASTAGE)

ANNUAL POUNDS FOR SALE PER YEAR:  $19,694

PRICE OF EACH POUND OF FRUIT: $ 1.80

TOTAL RETURNS ANNUALLY: $ 35,448.30

Therefore the profit on the investment is estimated by deducting the annual costs from the annual returns.

HYDROPONIC FARMING COST and PROFIT – TOTAL PROFITABLE RETURN ON THE INVESTMENT IN HYDROPONIC SYSTEM IS: $ 1955.90

This system describes the production of tomatoes but farming of different vegetables and fruits may deliver different outputs. The profit margins may also change depending upon the demand for the produce in the market and the hydroponic farming system’s production capability. The above mentioned figures are just given to understand the structure of the investment and help beginners to draw up their business plans.

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12 COMMENTS

  1. I have 5000m2 space with 70 m x 70 m dimension and I would like to grow vegetables by using indoor hydroponic technique. In Oman, I do want to know what are the requirements and how much will it cost?.

  2. Hello, I apreciate this valuable article and I would like to update and adabt the paper to the local conditions of Morocco. pease send me the report if possible.

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