Optimum Returns from Greenhouse Vegetables under Water Quality and Risk Constraints in the United Arab Emirates

Eihab Fathelrahman, Mohamed Gheblawi, Safdar Muhammad, Emily Dunn, James C. Ascough and Timothy R. Green
Additional contact information
Mohamed Gheblawi: Department of Agribusiness and Consumer Sciences, College of Food and Agriculture, United Arab Emirates University, Al Ain 009713, United Arab Emirates
Safdar Muhammad: Department of Agribusiness and Consumer Sciences, College of Food and Agriculture, United Arab Emirates University, Al Ain 009713, United Arab Emirates
Emily Dunn: Department of Agribusiness and Consumer Sciences, College of Food and Agriculture, United Arab Emirates University, Al Ain 009713, United Arab Emirates
James C. Ascough: USDA-ARS, 1400 Independence Ave., S.W. Washington DC, 20250, USA
Timothy R. Green: USDA, Agricultural Research Service (ARS), Water Management and Systems Research Unit, Fort Collins, CO 80521, USA

Sustainability, 2017, vol. 9, issue 5, 1-11

Abstract: Greenhouses have been used in the United Arab Emirates (UAE) to produce vegetables that contribute toward UAE food security, including offering fresh vegetable produce in the off-season. However, to manage such greenhouses, farmers face both technical and environmental limitations (i.e., high water scarcity), as well as vegetable market price instability. The objective of this study is to explore tradeoffs between returns (i.e., gross margin) of selected vegetables (tomato, pepper, and cucumber), risk (deviation from gross margin means), and an environmental constraint (water salinity) using a unique target MOTAD (minimization of total absolute deviations) approach to support UAE farmer decision-making processes. The optimal target MOTAD solution included all three vegetables and no corner solution. The results showed tradeoffs between returns and risks, and confirmed that product diversification reduces overall risk. The analysis was consistent with farmer perceptions based on a survey of 78 producers in the region. The search for the optimal mix of vegetable production under UAE greenhouse conditions revealed that reduction in tomato production should be offset by an increase in cucumber production while maintaining a constant level of pepper production. In other words, risk is reduced as cucumber production increases due to the high level of tomato and lettuce price volatility as the alternative to cucumber. The results also demonstrated the importance of the water salinity environmental constraint, as it was found to have a positive marginal value in the optimal vegetable mix solution (i.e., important factor). Thus the optimal solution was highly sensitive to changes in the crop water salinity constraint. The study results also demonstrate that the target MOTAD approach is a suitable optimization methodology. As a practical approach, a decision-maker in the UAE can consider gross margin (total revenue-variable costs) maximization with risk and water quality constraints to find the optimal vegetable product mix under greenhouse conditions.

Keywords: target MOTAD; optimization; risk; tradeoffs; water salinity; vegetables; greenhouses; crop production (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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