Assessing economic sustainability and resilience of tomato farming ventures in Addis Ababa: A project-based evaluation

Urban Farm DB summary

A 2024 project-based appraisal of urban tomato farming in Addis Ababa, Ethiopia, using net present value (NPV), internal rate of return (IRR) and benefit–cost ratio (BCR). With the cost of water included the venture returns a negative NPV of −US$30,100 per hectare per year, an IRR of 0.2%, a BCR of 0.83 and a payback period beyond ten years; excluding water costs it turns positive (NPV +US$15,100/ha/yr, IRR 21%, BCR 1.02, payback 2.9 years). Production cost is US$0.60/kg with water and US$0.45/kg without, against an average selling price of US$0.47/kg, so the venture does not pay for itself as long as water must be bought. Sensitivity analysis shows returns rise with price and yield and fall with operating costs. The authors treat better market access, agro-processing and cooperative formation as preconditions for viability.