Binyamin:

Hydroponics used to be quite popular during the 1990s. But to produce cost effective hydroponic crops requires huge scales, and the huge scale of producing hydroponic crops costs too much.

To put into perspective:
1 acre of hydroponic system with PU sheds and systems will be in the range of about RM1 million easily. This does not include the cost of the land itself, or the overheads, which would increase the total initial capital outlay to RM1.5 million easily.

For conventional farming on 1 acre of land, the normal capital outlay is about RM150,000 or less, including the acquisition of land. Here I'm assuming heavy agri machines are rented, not owned.

The amount of crop produced in a 1 acre hydroponics facility is roughly 4 times the yield of conventional farming. So if 1 acre can produce about 30,000kg of crop per year using conventional method, hydroponics would give 120,000kg.

Now let's calculate the revenues.

If 1kg of crop averages about RM5 per kg, conventional farming would yield RM150,000 a year. After amortization of land costs, the farmer could see a nett profit of around RM30,000- RM50,000. With hydroponics, the revenue would be about RM600,000; net revenue would be in the range of RM130,000 or so.

Although hydroponics is 4.33 times greater than conventional farming, the initial capital outlay is 10 times as much. Keep in mind that in any business, be it farming or food peddling, there is a minimal scale of sale needed to break even, so with costlier equipment, higher efficiency is required to offset its cost.

Aside from this, do bear in mind the vicious cycle of agriculture output. To put it simply, more does not necessarily mean better. Producing 4.33 times the yield of conventional farming would look good on paper, but would it cause an oversupply in the marketplace, and hence a price crash? I remember that at one point, Cameron Highland farmers literally dumped tons of cabbages on the doorsteps of their local DOA after influx of foreign cabbages led to prices plummeting from RM2.00 per kg to RM0.40 per kg within a month.

Farming is not just about biology. It is also about marketing and economics. In other words, it's a multidisciplinary subject, which is often not emphasized.

You can market through FAMA, but I don't like them very much. In my opinion, they haven't been doing a good job. You can get a wholesaler to buy up your crop, especially if you have large scale. But honestly, you'd get more value for your produce if you sold them yourself.