Cost-Benefit Analysis of a Smart Greenhouse Facility in Western Visayas (Region VI) and Northern Mindanao (Region X), Philippines

Abstract

This study analyzed the costs and benefits of establishing a smart greenhouse facility in Iloilo City in Western Visayas and Bukidnon in Northern Mindanao in the Philippines to determine the required investments and possible returns in adopting the technology. Various financial metrics were used to determine the technology’s profitability. The findings revealed that a substantial initial investment was needed to establish and operate the facility because the materials used to construct its physical structure and the equipment procured are imported. Moreover, the facility’s full capacity utilization and benefits had not been fully realized and maximized yet. This resulted in varying degrees of financial feasibility and profitability. Overall, shiitake mushroom cultivation demonstrated financial profitability despite high initial investment costs, while production of honeydew melons, netted melons, strawberries, and cherry tomatoes showed uncertain and potentially unprofitable results. The baseline data developed can be used by project implementers to conduct follow-up project evaluations and return on investment analyses for smart greenhouses. Furthermore, the results of this cost-benefit analysis can help farmers decide whether to invest in smart farms. Finally, the results of this study can be used to craft relevant policies and guidelines to encourage and accelerate the local development and adoption of smart agriculture ICT-based technologies in the Philippines.