Economic viability of implementing a hydroponic system for lettuce using PRONAF resources in Matão-SP

Décio Leite, Rafaela Alenbrant Migliavacca, Lílian Angélica Moreira, Alfredo Junior Paiola Albrecht and Daiane Aparecida Fausto

Revista IPecege, 2016, vol. 2, issue 1

Abstract: The Food and Agriculture Organization of the United Nations (FAO) states that family farming, due to its great economic and social importance, receives public support and incentive policies in Brazil and worldwide. Therefore, this study aimed to investigate the economic and financial viability of implementing a hydroponic system for lettuce production within a family farming context on a rural property in the municipality of Matão, SP. Hydroponics requires a high initial investment but offers advantages for leafy vegetable cultivation compared to traditional soil cultivation. The study was conducted according to the Brazilian concept of family farming, and to obtain financial resources, the possibility of using financing from the PRONAF Mais Alimentos program, amounting to eighty thousand reais, was evaluated. This credit line provides resources for investments in machinery and equipment with low interest rates, a 3-year grace period, and 10 years for repayment. The economic analysis used Net Present Value (NPV), Internal Rate of Return (IRR), and discounted payback period. Using the applied methodology and a minimum acceptable rate of return (MARR) of 7%, it was possible to find a project NPV of R$ 101,862.76. The IRR was 30.1% per annum. The return on investment was achieved in just 4 years, demonstrating high viability for project implementation.

Keywords: Financial; Economics (search for similar items in EconPapers)
Date: 2016
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