Journal of Developments in Sustainable Agriculture 12: 45-51 ( 2017)

Economic Feasibility of Coconut Coir-Based Hydroponics as

an Alternative System for Crop Management in Thailand

Hisashi Urayama1*, Hidetoshi Takama2 and Sachio Maruyama3

1
Overseas Agricultural Development Association, 8-10-32 Akasaka, Minato-ku, Tokyo 107-0052, Japan
2
former Japan International Cooperation Agency, Tsukuba International Center,
3-6 Koyadai, Tsukuba, Ibaraki 305-0074, Japan
3
Faculty of Life and Environmental Sciences, University of Tsukuba,
1-1-1 Tennoudai, Tsukuba, Ibaraki 305-8572, Japan.

Coconut coir is an effective growth medium that has been used in hydroponic cultivation of lettuce in Thailand;
this material is inexpensive and readily available in tropical regions. Here, we evaluated the financial feasibility of an
energy-saving hydroponic system using coconut coir as the growth medium in northeastern Thailand. We first com-
pared coconut coir hydroponic cultivation with the conventional open field cultivation to assess the productivity and
marketability of cucumbers in the rainy and dry seasons: in the hydroponic system, profit in the rainy season 57%
higher and in the dry season, 95% higher. Next, we assessed a simulation of a new cropping pattern based on the
hydroponic system. The assessment included a new 4-year investment in a conventional crop of rice and cucumber in
the rainy season and tomato in the dry season, versus an investment in the coconut coir-based hydroponic system for a
0.32 ha (2 rai) field. Incremental cost‒benefit values, comparing existing management practices with the new 4-year
term, were calculated at a discount rate of 0.0975, which was the lowest concessional loan rate by the Bank of Agri-
culture and Agricultural Cooperatives. The cost‒benefit ratio was 1.14. These findings show that investment in hy-
droponic cultivation in northeastern Thailand would be cost effective.

Key words: B/C ratio, coconut coir, cropping system, hydroponic media, NPV

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tries. Upland crop farming is not as common as post-

Introduction
paddy rice cropping in most of these countries, where
Crop production in tropical and subtropical zones cropping systems should be diversified according to
can be sustainable if soil fertility can be maintained the water supply. In Thailand, paddy rice is generally
under continuous farming. The use of hydroponic sys- cultivated during the rainy season (May through No-
tems can be beneficial to small-scale farmers by ena- vember), and upland crops are cultivated in paddies
bling them to take advantage of favorable climate during the dry season (December through June); this
conditions to improve productivity. In tropical and practice is typical in tropical Asia. A unique cropping
subtropical countries, the majority of farmers operate system, called the Chinese system, is used to cultivate
on a small scale, with less than 1 ha of cultivated land. Solanaceae, Cucurbitaceae, and Brassicaceae plants
However, medium-scale farmers with more than 2 ha in large nurseries on the dry paddy fields in this area
of cultivated land can establish crop rotation systems (Yamada, 2004).
with cash crop production. Salinized soils are common in northeastern Thai-
Lowland paddy rice farms are among the most land, and crop growth is severely inhibited in these
important agricultural systems in tropical Asian coun- soils. Continuous cropping also stresses the soils and

Received: January 13, 2016, Accepted: April 28, 2016

* Corresponding author: Overseas Agricultural Development Association, 8-10-32 Akasaka, Minato-ku, Tokyo, 107-0052, Japan.
Tel: 03-3478-3510, Fax: 03-3401-6048, E-mail: [email protected]
 46 J. Dev. Sus. Agr. 12 (1)

further limits yield in this area. To address these indicate a beneficial or economically feasible result.
problems, the government is considering a project to Cash flow was investigated eight times during the four-
install irrigation systems in this region (Sato, 2008). year study (in the rainy and dry seasons). A 9.75%
In this study, we investigated the economic feasibility discount rate was used with the maximum interest rate
of improving crop rotation systems by using coconut from the Bank of Agriculture and Agricultural Coop-
coir media in energy-efficient hydroponic systems eratives. Benefits and costs were computed at a half
(Urayama et al., 2005, 2007). discount rate for every half year with a half-year cash
flow.
Materials and Methods
Results and Discussion
Hydroponic systems (Thippayarugs et al., 2002) for
fruits and leafy vegetables were used at the Khon Kaen The Agriculture & Livestock Industries Corporation
Field Crop Research Center to examine energy and report (2007) indicates that the average cucumber yield
cost savings. Absorbent with the type of fabric (e.g., for open fields is approximately 2.0 kg/m2 per year. In
cotton) sheets were evaluated as an alternative growth contrast, cucumber yield in an energy-saving hydro-
medium, and energy-saving hydroponic systems using ponic system with coconut coir as the growth media
coconut coir (Urayama et al., 2005, 2007) were used was 8.5 kg/m2, which is 4.2 times the yield for a 2.5-
for cucumbers. month farming season.
The cost and profitability of cucumber production in Monthly average shipment prices for the open-field
a 0.1 ha field was estimated with data from a report by scenario were 3.9 baht/kg (approximately 11.7 yen/kg;
the Agriculture & Livestock Industries Corporation 1 baht＝3 yen) (Agriculture & Livestock Industries
(2007). We used data on current conditions for crop Corporation, 2007). Shipping costs depend on supply
rotation in northeastern Thailand as published in Sato and demand during each season. The average monthly
(2008) and Agriculture & Livestock Industries Corpo- wholesale price in Bangkok for cucumbers from 2006
ration (2006). General information on the production to 2011 was 16.55 baht during the rainy season (Au-
cost of rice and vegetables and on the average field size gust to November) and 18.11 baht during the dry sea-
and yield of paddy rice were obtained from Kabaki et son (February to May). The total seasonal average
al. (2001), Agriculture & Livestock Industries Corpo- price from January 2006 to April 2011 (64 months)
ration (2006, 2007), Sato (2008), and the Food and was 17.37 baht. The rainy and dry season mean prices
Agriculture Organization of the United Nations (2008). were 3.7 baht and 4.1 baht, respectively, which made
The data from these reports were used to generate each the average shipment price 3.9 baht for both seasons.
estimate. The itemized expenditures for cucumber production
Farm management practices in the four-year cucum- are as follows: tillage, 234 baht (702 yen); planting,
ber cultivation study were compared between the open 129 baht (387 yen); field management, 368 baht (1,104
field and hydroponic system during the rainy and dry yen); harvest, 259 baht (777 yen); seeds and seedlings,
seasons. Financial analysis was performed using the 393 baht (1,179 yen); fertilizer and other chemicals,
‘Economy Financial Affairs Analysis Method’ (Takama 969 baht (2,907 yen); fuel and other consumable mate-
and Tomomatsu, 1999) to examine the economics of rials, 419 baht (1,257 yen). In the hydroponic system,
the two cropping systems. harvest expenses were divided proportionally as yield
Net present values (NPV) and benefit/cost (B/C) increased or decreased. Fertilizer expenses in the
ratios were calculated as follows (Upton, 1996): hydroponic system include the price of culture solu-
ΔB ΔC tion; lettuce cultivation required 1.5-times the water
NPV= ∑ n −∑ n ≥0
1+r 1+r and a growing period 4-times that for cucumber
and (Thippayarugs et al., 2002). Expenses for fuel, chemi-
ΔB ΔC cals, and labor in the hydroponic system were esti-
B/C Ratio=∑ n /∑ n ≥1
1+r 1+r mated as half those required for open-field cultivation.
where ΔB is incremental benefit, ΔC is incremental Coconut coir is readily available and inexpensive
cost, r is the discount rate, and n is the duration of (Thippayarugs et al., 2002; the price of coconut coir is
cropping (number of time periods). A project is approximately 1 rupee (~1 yen) in Sri Lanka and 1
feasible if the NPV is positive, and B/C ratios ＞1 peso (1-2 yen) in the Philippines. Based on this price,
 Urayama et al.: Feasibility of coconut coir as hydroponic growth media 47

Table 1. Depreciation expense of energy-saving hydroponics systems (materials only, except con-
sumables and labor cost) in Thailand.

In Japan In Thailand
Materials
Price/unit (yen) Cost (yen) Price/unit (baht†) Cost (baht)

3300/ 225/
Culture bed 1,114,000 94,875
1.5 m×0.6 m 1.2 m×0.6 m
Floating bulb 2,000 44,000 90 1,980
600/ 200/
Absorbing sheet 304,000 15,484
1 m×1.2 m 1 m×2.0 m
180/ 30/
Root barrier sheet 0 0
1 m×1.2 m 1 m×1.2 m
Tank 50,000 1,100,000 550 12,100
Others (piping
500,000 50,000
stems etc.)

Total 3,062,000 139,439

†
1baht＝3 yen.

the total expense for media for a 1,000 m2 field (one (Table 2).
bed) would be approximately 928 baht (2,784 yen) for During the dry season, the net income for the hy-
128 kg (23 m×0.6 m), and this could be used for 1 to 2 droponic system was 10,838 baht (32,514 yen), ap-
years. The initial investment required for a hydro- proximately double the income for the open field sce-
ponic system with 22 beds for 1,000 m2 (1 bed＝23 m nario (Table 2). However, hydroponic systems could
×0.6 m) is 281,540 baht (844,620 yen) according to be even more profitable, given supermarket values of
Thippayarugs et al. (2002); absorbent sheeting ac- 14 baht (42 yen) (Japan International Cooperation
counts for 36% of all expenditures (101,333 baht, Agency, 2006), the durability of these energy-saving
304,000 yen) because of the high costs of importing the systems, and the potential to grow high-value crops
sheets from Japan. such as melons and tomatoes.
Because of this high cost, procurement of absorbent The profit margins for energy-saving hydroponic
sheeting from Thailand was evaluated, which reduced systems are higher than those for open-field cropping,
the cost to 15,484 baht (46,452 yen), equivalent to only especially when materials are domestically procured.
5% of the total expense. After this adjustment, the Hydroponic systems also enable fruits and vegetables
initial cost of the hydroponic system was estimated as to be grown without compromising the soil health and
139,439 baht (104,580 yen) (Table 1), and the total timing of planting. However, fluctuations in market
expense for this system was 34,860 baht (189,618 yen) prices can reduce the estimated end profits. Because
over the four-year period, using a fixed amount with farmers do not commonly use hydroponic systems, it is
estimated depreciation. Depreciation expenses were probable that greater income would not be expected
then estimated as 17,430 baht (53,290 yen) for a single until low-cost absorbent sheeting is procured. Most
hydroponic crop of cucumber in the rainy and dry farmlands in the study area are approximately 2 rai (1
seasons for one year, and total expenditures were rai＝0.16 ha). On most farm fields of approximately
23,914 baht (71,742 yen) (Table 2). 2-3 rai (0.32-0.48 ha), fruits vegetables are cultivated
Net rainy season profits for cucumber grown in open and managed by families (Agriculture & Livestock
fields, assuming a yield of 2.0 kg/m2 (Agriculture & Industries Corporation, 2006). Crop rotations that al-
Livestock Industries Corporation, 2007), were esti- ternate between rice and vegetables are generally used
mated as 4,737 baht (14,211 yen). Net rainy season in the lowlands. In lowland rice-growing areas, most
profit for the hydroponic system, with a yield of 8.5 private holdings are divided into 1 rai for paddy fields
kg/m2, was 7,447 baht (22,341 yen), approximately and 1 rai for vegetables to maintain or improve soil
1.6 times the net income from the open-field scenario health. Lowland rice planting begins during the rainy
 48 J. Dev. Sus. Agr. 12 (1)

Table 2. Expense of cucumber production in unit area (10 a) compared between field and energy-saving hydroponics
in different seasons in Thailand (unit: baht).

Expenditure Fertilizers
Field Seeds and
Tillage Transplaning Harvest and
management seedlings
Cropping chemicals
Cucumber (wet) 234 129 368 259 393 969
Cucumber (dry) 234 129 368 259 393 969

Cucumber (energy-
saving hydroponics) 234 129 368 1,082 786 2,538
(wet)
Cucumber (energy-
saving hydroponics) 234 129 368 1,082 786 2,538
(dry)

Expenditure Fuel and Culture Depreciation Expenditure

Cropping consumables medium expense (total)

Cucumber (wet) 419 0 0 2,770

Cucumber (dry) 419 0 0 2,770
Cucumber (energy-
saving hydroponics) 419 928 17,430 23,914
(wet)
Cucumber (energy-
saving hydroponics) 419 928 17,430 23,914
(dry)

Income Yield Initial price

Gross income Net income
Cropping (kg 10 a−1) (baht† kg−1)
Cucumber (wet) 2,029 3.7 7,507 4,737
Cucumber (dry) 2,029 4.1 8,319 5,549

Cucumber (energy-
saving hydroponics) 8,476 3.7 31,361 7,447
(wet)
Cucumber (energy-
saving hydroponics) 8,476 4.1 34,752 10,838
(dry)

season, and vegetables are used as feed for piglets and farmer in Thailand is approximately 72,000 baht
as cash crops. Maize and beans are also used in rota- (216,000 yen) (Sato, 2008).
tion with rice. Livestock farmers also plant lowland The profit from an energy-saving hydroponic system
rice as a cash crop, and cassava and maize are included that produces two cucumber harvests is clearly greater
in the rotation. than that obtained using the open-field method, which
Farmers who practice lowland crop rotation have an produces just one cucumber crop per year. However,
annual income of approximately 15,000 baht (45,000 hydroponic systems limit the scale or size of the field
yen). In contrast, the average annual income of a to 0.6 rai (~0.1 ha) because of the amount of media and
 Urayama et al.: Feasibility of coconut coir as hydroponic growth media 49

Fig. 1. A pattern of conventional crop rotation system (A) and modified (new) crop rotation system (B)
for the small-scale farmers in Thailand.

labor needed. Therefore, a field size of 2 rai would be market price of approximately 5.2 baht/kg (15.6 yen/
ideal for farm management when incorporating a hy- kg). We estimated the cost of labor and materials (e.g.,
droponic system; one rai could be allocated to lowland fertilizer) as 694 baht/rai (2,082 yen/rai) for a family
rice during the rainy season, and one rai should be farm business in Thailand (Japan International Coop-
allocated to vegetable production (Fig. 1). A 0.6 rai eration Agency, 1998). From these values, the net
field can be used for one harvest, and the remaining 0.4 benefit of conventional cropping during the rainy sea-
rai (~600 m2) can be used for vegetables. son was estimated as 5,998 baht/260 m2 (17,994 yen/
The net income for lowland rice farming (one har- 260 m2), adding a net profit of 4,737 baht/0.1 ha
vest) is estimated as 1,261 baht (2,364 yen), with an (14,211 yen/0.1 ha) to conventional open-field cucum-
average yield of 2,350 kg (Kabaki et al., 2001) and a ber production (rice + cucumber). If tomato produc-
 50 J. Dev. Sus. Agr. 12 (1)

Table 3. Cash flow between conventional cropping and modified cropping patterns in season wise.
(unit: baht)

Conventional Total
Modified cropping
cropping NPV

─ year 1 year 2 year 3 year 4

rainy dry rainy dry rainy dry rainy dry rainy dry

Gross value of
9,462 13,838 33,316 48,590 33,316 48,590 33,316 48,590 33,316 48,590
production
Incremental value
─ ─ 23,854 34,752 23,854 34,752 23,854 34,752 23,854 34,752
of production
Expenses 3,464 2,200 146,601 8,668 7,162 8,668 7,162 8,668 7,162 8,668
Incremental
─ ─ 143,137 6,468 3,698 6,468 3,698 6,468 3,698 6,468
expenses
Net benefit 5,998 11,638 -113,285 39,922 26,154 39,922 26,154 39,922 26,154 39,922
Incremental net
-119,283 28,284 20,156 28,284 20,156 28,284 20,156 28,284
benefit/cash flow
ΔB ΔC
NPV= n− n -113,738 25,716 17,474 23,380 15,887 21,257 14,444 19,327 23,748
1+r 1+r

tion is included after lowland rice farming, gross pro- viable substitute for chemical fertilizers because it ac-
fits would be approximately 13,838 baht/rai (41,514 cumulates potassium and nitrogen for the life of the
yen/rai), with an estimated yield of approximately media, which is approximately one to two years with
4,613 kg/rai (Agriculture & Livestock Industries Cor- continuous farming (Urayama et al., 2005). After co-
poration, 2007) and market price per kg of 3 baht (~9 conut coir has been used in a hydroponic system, it can
yen) (Agriculture & Livestock Industries Corporation, be composted or incorporated into the soil (Koyama et
2006). From these values, the net profit for tomato al., 2009). It can also be used as a growth media to
would be approximately 11,638 baht/rai (34,914 yen/ improve hydroponic rice production (Urayama and
rai) before subtracting material expenses (e.g., fertil- Maruyama, 2009). Compared to conventional (open
izer) for cucumber production (approximately 2,200 field) farming, the net income for a hydroponic system
baht/rai). Ultimately, the net profit for conventional is approximately 57% greater in the rainy season and
farming in the rainy and dry seasons was estimated as 95% greater in the dry season (Table 2).
17,636 baht (52,908 yen/rai) (Table 3). In conclusion, this financial analysis shows that
When energy-saving hydroponic systems are intro- modified cropping systems that use coconut coir as a
duced into farming, the estimated net income increases hydroponic growth media can be profitable and farm-
(Table 2). Our estimated cash flows for conventional ing can enable repayment of loans accumulated
and modified (hydroponic) cropping systems reflect through farming practices
four years of depreciation of the energy-saving system
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