Financial Feasibility study of GREENBOX technology for crop production in an urban setting

Abstract

<b><sc>Abstract.</sc></b> Food security pressure, especially in urban areas, continues to rise due to surging demand for food resulting from a growing population and declining resources. It has been a critical call to improve crop production and make food readily available to consumers without traveling long distances in an economically sustainable manner. The Yang Laboratory at the University of Connecticut has developed a GREENBOX technology that uses Controlled Environment Agriculture (CEA) for leafy green crop production. A GREENBOX is an individual thermally insulated chamber with an artificial lighting source and a soilless cultivation system (hydroponics) in an environment that is controlled at the grower's discretion. This study performed a financial feasibility study of GREENBOX technology for urban crop production. We carried out a benefit-cost analysis by assessing the Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PP). These parameters were evaluated for a base case scenario from data collected or estimated for a representative GREENBOX unit. We then conducted a sensitivity analysis on NPV, IRR, and PP. A multivariate regression analysis was carried out to understand the variation of the NPV. The base case scenario revealed that GREENBOX was financially viable. GREENBOX technology was financially feasible in all scenarios except when skilled labor wages exceeded $19/hr and units were below 300. A statistically significant regression equation was derived in which rising rent, labor, and electricity prices negatively impacted the NPV, while the rising lettuce sales price and the number of GREENBOX units positively impacted the NPV. GREENBOX farming may serve as a local source of fresh crops for the urban population.