Financial Analysis of Melon Production in Lower Southern Region of Thailand

Abstract

This research aims to study the farmers’production and distribution management of melon and to conduct financial analysis of melon production in lower southern region of Thailand. The data were collected from the interviews of 23 farmers producing melon in greenhouse in Songkhla, Phatthalung, Satun and Trang province using snowball sampling. The data were analyzed using descriptive statistics. Meanwhile, project financial analysis techniques were employed with three criteria including net present value (NPV), benefit - cost ratio (BCR) and internal rate of return (IRR) with sensitivity analysis. The analysis was calculated at 9% discount rate and 10–years project life. The results showed that 78 percent of farmers planted melon in high tunnel greenhouse. The popular varieties were Golden Egg, Kimoji, and Baramee. Most farmers, 83 percent, planted melon in substrate culture. All farmers applied drip irrigation; in addition, 70 percent of farmers applied AB fertilizer. The average harvest period was 46 days after pollination. Most farmers distributed melon directly to the consumers (online) and at the farm. The financial analysis of melon production was implemented in an1-rai area with 3 greenhouses and 3 production crops/greenhouse/year. The yields were 200 fruits each production crop. The average yields were 1.5 kilogram/fruit. The average selling price was 155 baht/kilogram. The initial investment was 361,520 baht. The operating expenses were 205,713 baht/year. The returns were 418,500 baht/year (1st-year exemption). The base cases in both before and after loan are feasible i.e. NPV = 857,348.53 and 836,706.33 baht, BCR = 1.55 and 1.46, and IRR = 67.17% and 156.53%. The sensitivity analysis results showed that all cases were feasible except the case of a 15% yield decrement and 25% price decrement simultaneously is infeasible.