EXECUTIVE SUMMARY

WHAT MEAN A HYDROPONIC FARM IS?

Hydroponics is a type of horticulture and a subset of hydroculture which involves
growing plants, usually crops or medicinal plants, without soil, by using water-
based mineral nutrient solutions. Terrestrial or aquatic plants may grow with their roots exposed
to the nutritious liquid or in addition, the roots may be mechanically supported by
an inert medium such as perlite, gravel, or other substrates.
Despite inert media, roots can cause changes of the rhizosphere pH and root exudates can affect
rhizosphere biology and physiological balance of the nutrient solution by secondary metabolites.
Transgenic plants grown hydroponically allow the release of pharmaceutical proteins as part of
the root exudate into the hydroponic medium.
The nutrients used in hydroponic systems can come from many
different organic or inorganic sources, including fish excrement, duck manure,
purchased chemical fertilizers, or artificial nutrient solutions.
In contrast to field cultivation, plants are commonly grown hydroponically in
a greenhouse or contained environment on inert media, adapted to the controlled-environment
agriculture (CEA) process. Plants commonly grown hydroponically
include tomatoes, peppers, cucumbers, strawberries, lettuces, and cannabis, usually
for commercial use, as well as Arabidopsis thaliana, which serves as a model organism in plant
science and genetics.
Hydroponics offers many advantages, notably a decrease in water usage in agriculture. To grow
1 kilogram of tomatoes using intensive farming methods requires 214 liters of water; using
hydroponics, 70 liters (15 imp gal; 18 U.S. gal); and only 20 liters (4.4 imp gal; 5.3 U.S. gal)
using Aeroponics.
Hydroponic cultures lead to highest biomass and protein production compared to other growth
substrates, of plants cultivated in the same environmental conditions and supplied with equal
amounts of nutrients.
Since hydroponic growing takes much less water and nutrients to grow produce, and climate
change threatens agricultural yields, it could be possible in the future for people in harsh
environments with little accessible water to hydroponically grow their own plant-based food.
Hydroponics is not only used on Earth, but has also proven itself in plant production experiments
in space.

Why is hydroponics profitable?

Here are eleven reasons why hydroponics and substrate growing are profitable, in case you are
thinking of buying a professional hydroponic system:

1. Some hydroponic techniques allow you to increase your profitability by 30% to 50%
because you can make more use of the growing area.
2. Many plants grow faster, so yields and harvests can be accelerated.
3. With the right equipment, it is possible to grow at any time of the year, regardless of soil
and environmental conditions, thus bringing forward the start of the growing cycles.
4. Hydroponic irrigation allows water savings of around 80% compared to traditional
systems. It also allows the possibility of recirculating drainage.
5. It considerably reduces the use of agrochemicals and disinfection products, thus
promoting cost savings for growers.
6. It reduces labor costs and labor risks, as it improves the ergonomics of the tasks,
especially at harvest time. This also increases the well-being of the workers.
7. It makes it possible to grow certain fruits or vegetables in places that were previously
unsuitable, especially in hydroponic greenhouses.
8. By being able to grow crops in locations close to populations, reduces the carbon
footprint by avoiding much of the transport and associated costs.
9. It also makes it easier for certain populations to access fresh vegetables in greater
quantities and with greater ease, as it avoids breaking the supply chain, thus increasing
the market.
10. By not relying on soil, reduces both soil degradation and allows cultivation on degraded
or high salinity soils.

Products of a hydroponic farm

What is the product?
According to our country the following crops that listed below has been more preferable crops
and profitable, because all people wants these vegetables daily.
Crops
Although almost any crop can be grown hydroponically, the most common are leaf lettuce,
tomatoes, peppers, cucumbers, strawberries and some herbs. One key factor in system design for
a particular crop is how it is supported in the nutrient solution.
Comparison with its competitors
What are the competitors in this business

Hydroponics farming is in its infancy stage in Ethiopia. Currently, there are no commercial
hydroponics in the region.

To encourage private investment, the Ethiopian Government has developed a package of

incentives for investors engaged in new enterprises and expansions, across a range of sectors.
These incentives are available both to foreign and domestic investors and the said Regulations
doesn’t discriminate between a foreign and domestic investor or between foreign investors of
different nationalities. The type of incentives that are available both to foreign and domestic
investors. A 100 percent exemption from the payment of import customs duty and other taxes
levied on imports is granted to investment capital goods and construction materials necessary for
the establishment of a new enterprise or for the expansion or upgrading of an existing enterprise
as well as spare parts worth up to 15 percent of the value of the imported capital goods.

Our competitors wasn’t a hydroponic farmer instead our competitors are farmers that uses a farm
to grow a crops.

Who is the target market?

The target market is local restaurants supermarkets and sell directly to the public.

How much can you charge customers?

You can charge a wide variety of prices. The exact prices you charge hinges on the items you
grow and sell. The prices also hinge on your local market's supply and demand. Specialize in a
certain type of produce, grass, flower or other item and customers will be more than willing to
pay a significant amount of money for your unique offering.

Best Location to install a farm:

Which Plants Grow Best in an Outdoor Hydroponic Garden?

Just about anything that already grows well outdoors is technically able to grow in an outdoor
hydroponic system. Light-weight plants with small roots are generally considered the best.

Among the plants that grow best in outdoor hydroponic gardens are:

 Greens (lettuce, spinach, micro-greens, and more)

 Tomatoes
 Berries (mainly strawberries)
 Aloe Vera
 Cucumbers
 Beans (multiple species)
 Grapes
 Watermelon (with proper support)
 Chives
 Daffodils

The main advantage of using an outdoor hydroponic farm is, it doesn’t need a cooling fan and
heater instead of air and sunlight respectively.
Selling price and selling forecast
Sales Strategy
At Farmers Group, the sales process is primarily the same for vegetables as it is for composting
products, in that both products will be mainly sold through wholesale marketing. As in the past,
live shipments will be delivered by contract carriers in special oxygenated tanks carrying 8,000
vegetables or more, and will be continued as demanded. Farmers Group's bagged manure
products will be delivered and unloaded in sizable wholesale quantities by the pallet.
Our factor sales cycle from first contact to closing of the sale is approximately 3 to 12 days for
vegetable products. Farmers Group plans to shorten this cycle. Furthermore, our company
estimates that from first contact to sale conclusion, the cycle for fresh lettuce will run 12 days or
less. Composted products sale cycle should run from 3 to 12 days.

Direct sales contacts of vegetable markets by delivery personnel, as well as cold calling by
telephone of potential market outlets, will also be employed.

time versus money graph

(saLes yearly)

1200000
1000000
1000000

800000

600000
500000
400000

200000 200000
100000
0
2.4
1 2 4.4
2 2 1.8
3 3 2.8
4 5

Series 1 Series 2 Series 3

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3 Year 4
Sales
Sales 100,000 birr 200,000 birr 500,000 birr 1,000,000 birr

Other 0 birr 0 birr 0 birr 0 birr

Total Sales 100,000 birr 200,000 birr 500,000 birr 1,000,000

How does hydroponics work?

Hydroponic systems work by allowing minute control over environmental conditions like
temperature and pH balance and maximized exposure to nutrients and water. Hydroponics
operates under a very simple principle: provide plants exactly what they need when they need it.
Hydroponics administer nutrient solutions tailored to the needs of the particular plant being
grown. They allow you to control exactly how much light the plants receive and for how long.
pH levels can be monitored and adjusted. In a highly customized and controlled environment,
plant growth accelerates.

By controlling the environment of the plant, many risk factors are reduced. Plants grown in
gardens and fields are introduced to a host of variables that negatively impact their health and
growth. Fungus in the soil can spread diseases to plants. Wildlife like rabbits can plunder
ripening vegetables from your garden. Pests like locusts can descend on crops and obliterate
them in an afternoon. Hydroponic systems end the unpredictability of growing plants outdoors
and in the earth. Without the mechanical resistance of the soil, seedlings can mature much faster.
By eliminating pesticides, hydroponics produce much healthier and high-quality fruits and
vegetables. Without obstacles, plants are free to grow vigorously and rapidly.

What are the components of a hydroponic system?

To maintain a flourishing hydroponic system, you will need to become acquainted with a few
components that make hydroponics run efficiently.

Growing media
Hydroponic plants are often grown in inert media that support the plant’s weight and anchor its
root structure. Growing media is the substitute for soil, however, it does not provide any
independent nutrition to the plant. Instead, this porous media retains moisture and nutrients from
the nutrient solution which it then delivers to the plant. Many growing media are also pH-neutral,
so they will not upset the balance of your nutrient solution. There are a host of different media to
choose from, and the specific plant and hydroponic system will dictate which media best suits
your endeavor. Hydroponic growing media is widely available both online and at local nurseries
and gardening stores.
Air stones and air pumps
Plants that are submerged in water can quickly drown if the water is not sufficiently aerated. Air
stones disperse tiny bubbles of dissolved oxygen throughout your nutrient solution reservoir.
These bubbles also help evenly distribute the dissolved nutrients in the solution. Air stones do
not generate oxygen on their own. They need to be attached to an external air pump via opaque
food grade plastic tubing (the opacity will prevent algae growth from setting in). Air stones and
air pumps are popular aquarium components and can be purchased easily at pet stores.

Net pots
Net pots are mesh planters that hold hydroponic plants. The latticed material allows roots to
grow out of the sides and bottom of the pot, giving greater exposure to oxygen and nutrients. Net
pots also provide superior drainage compared to traditional clay or plastic pots.

Production cost of a system

1 – Electricity Costs

Assuming that both water pumps and grow lamps are operating 24/7. An ordinary 12 volt water
pump is rated at 22 watts while grow lamps are rated at 32 watts. This totals to 55 watts. This
multiplied by 720 hours (1 month) which results in 39600 watt-hours or 39.6kWh.

According to our country we will cost 0.35 Ethiopian birr for 1 KWh energy usage

In our country Ethiopia, the average electricity rate is 0.35 per kWh. Multiple the rate to
39.6kWh consumption and this will result in 13.86 birr.

2 – Water Costs

Since there are 72 pots of lettuce, each lettuce will need around 0.5 gallons of water. 20
multiplied by 0.5 results in a 36 gallon reservoir that will be replaced every 2 weeks for the sake
of simplicity.
In our country, the cost of water is 6.2 per cubic meter. In a month we need 72 gallon, which
means it costs around 5 birr.

3 – Nutrients Costs

Assuming that you’re a grower who uses chemical nutrients. It has been stated by some growers
that 3000 birr of dry nutrients will be good enough for 1 year. This means per month, it will cost
around 250 birr to keep the system filled with nutrients.

4 – Real Estate Costs

Assuming you live in Hawassa, the estimated average rent there is 10,000 birr per month for a
400sq. ft. room. This means that it costs 25 birr per sq. ft. for this system uses only10 sq. ft.

5 – Heating Costs

Heating during the winter season will cost around 3000 when using gas heaters or 1000 when
using electric heaters. Let’s say we’re using an energy efficient electric heater and this would
cost us 1000 to keep the indoor environment warm enough for plant growth.

According to our country climate data it doesn’t need any heater for most months.

Total Utilities Cost

The total utilities cost is computed by adding all the aforementioned factors (200 +250 +5 ).

All in all, it would cost 450 birr per month to operate an NFT system growing 72 lettuce
plants in a rented place in Hawassa.

Unlike soil cultivation, there are more costs related to hydroponics just with the electricity costs
alone. In soil, you just have to water it occasionally and let nature take care of the rest.
Hydroponics is a much more involved process which requires more participation from the
grower.

Hydroponic Farming Setup Cost

Cost of Setting up Hydroponic Farming in Ethiopia

Urban agriculture greatly benefits from hydroponic farming, which is vertical farming without soil. We
use a water solution that contains the minerals plants require. Hydroponic gardening doesn`t need soil.
We are able to carry out hydroponic gardening even in a small area.

Constructing a hydroponic farming system accurately works similarly to how a precision farming system
operates. The following are the requirements and startup costs for hydroponic farming in an area of 400
square feet:

One-Time Setup Cost of Hydroponic Farming:

ITEM COST in BIRR

shelter 10,000
NFT System Setup 5,000
Pipes 3000
Pipe connectors 500
2000-liter tank 12,500
Water pump (1 HP) 1000
pH meter 500
Labor cost 10,000
Stand 12,000
Lamps 500
Total cost 55,000 birr