Economic Efficiency of Investment in Processing of Vegetables

Subić, Jonel and Jeločnik, Marko (2022) Economic Efficiency of Investment in Processing of Vegetables. In: Proceeding from the XI International conference Competetiveness of Agro-food and environmental economy (CAFFE 2022). ASE-FEAM, Bucharest, Romania, pp. 132-139. ISBN 2285-9179

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Abstract

Globally, vegetable is important part of daily nutrition. In Serbia is generally produced by small family farms. Due to relatively short period of appearance as a fresh in local markets, presence of many veggies could be successfully pronged by their processing into the food products at the farm level. Usually individual farm is economically so weak to invest into the specific processing line, but joined in association or cooperative of vegetable producers, it could adequately contribute in generation of value added and additional incomes. The main goal of the paper is to analyze the economic efficiency of investment (in total 88,629.4 EUR) in line for vegetable processing (i.e. production of tomato juice and pickles). Derived results, primarily values for Net present value - NPV (119,868.5 EUR), Internal rate of return - IRR (39.57%) and Dynamic payback period - DPP (2 years and 5,70 months), show that planned investment could be assumed as economically justified, and above all it could represent the sustainable entrepreneurial alternative for any farm involved in sector of vegetable production.

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