Issue 63: Hydroponics as an agricultural production system

Issue 63
March/April – 2002
Story Title: Hydroponics as an agricultural production system
Edited by: Steven Carruthers

A recent study has shown that the commercial hydroponics industry is successful and rapidly expanding. According to the report, it dominates the production of a limited number of crops, and is probably the fastest growing sector in the Australian horticultural industry.

Australia’s hydroponic production of fresh vegetables, herbs and cut flowers is now valued at between $300-$400 million at the farm gate, according to a report commissioned by the Rural Industries Research and Development Corporation (RIRDC). If this figure is accurate, the report says it is equivalent to 20% of the total value of vegetable and cut flower production in Australia. The report forecasts even stronger growth for the Australian hydroponics industry, provided several key issues are addressed. These include establishing a venture that has a realistic economic framework; close attention to market requirements, before production begins; a realistic expectation of price, yield and labour requirements; and previous experience in horticultural production.

In Australia, which has a highly variable climate and a discerning customer base, the hydroponics industry provides an opportunity to overcome production variability. However, despite the benefits of consistent production that can be derived from hydroponic techniques, and the fact that hydroponic production has been used commercially since the 1970’s, there has been a perception that the industry has stalled in its evolution into a large-scale commercial alternative to traditional agricultural production. This is the basis of the RIRDC study on “Hydroponics as an agricultural production system”. The study sought to investigate and report on:

– The characteristics and trends in the global and Australian hydroponics industries;
– The requirements for a commercial production system;
– The economics of commercial production;
– Constraints on further expansion of hydroponics as an agricultural production system; and
– Conclusions on the future of hydroponics as a large-scale production system.

The aim of the study is to increase the understanding of whether the hydroponics industry in Australia has emerged as a large-scale alternative to traditional agricultural enterprises and, if not, why not. The report includes recommendations for further strengthening the Australian hydroponics industry.

Australian industry overview
At the present time, Australia is ranked in the top 10 world commercial hydroponic producers by area. It is the largest hydroponic lettuce producer in the world with over 240 ha under production; hydroponic strawberry cultivation is larger than that in the United States, and the flower industry is almost as large as that in the US.

In terms of main systems in use, the study found NFT (Nutrient Film Technique) and rockwool are the ‘backbones’ of the Australian industry with growing systems moving towards recirculation. More than half of all Australian hydroponic production is grown outdoors, which reflects the high proportion of lettuce grown. This is different to the worldwide scene where the majority of hydroponic crops are grown in greenhouses.

The study found a reluctance by Australian growers and retailers to market produce under a hydroponic label, which is cited as one reason why the industry is perceived as being smaller than it actually is. Hydroponic produce is often marketed on qualities such as taste and freshness rather than method of production. This reluctance to use hydroponic branding follows European trends in product marketing.

The study found that industry growth is being driven in part by new entrants and in part by conventional soil-based growers converting to hydroponic production techniques. The report forecasts that industry growth will continue in this way over the next five years.

Although Australia is ranked in the top 10 world commercial hydroponic producers, the report says that the industry is not best practice in critical production and marketing issues. According to the study, the industry is characterised by a large ‘tail’ of producers who are reluctant to invest and adopt innovation.

The study profiles the commercial production industry as family-based units producing for boutique markets, families as part of a larger growing and marketing cooperative, and corporate entities with investors who are not active in day-to-day management. The industry is capital intensive and capital costs are anywhere between $100 and $200 per square metre of growing area, depending on the sophistication of the greenhouse being proposed and the level of equipment being included.

According to the study, commercial success is linked to:
– Establishment of the venture in a realistic economic framework;
– Attention to market requirements before production commences;
– Realistic expectation of price, yield and labour requirements;
– Experience in horticultural production prior to entry into hydroponics.

The study highlights the fact that hydroponics is not a magical production system. It requires more skill to manage than conventional soil-based systems, and generates more technical problems. The report stresses that it is vital to recognise that the same level of skill is required to grow crops hydroponically as for soil growing.

New South Wales
NSW has the largest commercial hydroponics industry. Although the industry includes significant areas of cut flowers, tomatoes and cucumbers, it is lettuce which dominates the industry, especially ‘open head’ gourmet-style products such as cos, mignonette, butter and oakleaf varieties. Hydroponic lettuce are grown outdoors in a (hail) netted environment using NFT or modified NFT utilizing gravel or perlite media.

The major hydroponic production area is concentrated in the Sydney Basin, within close proximity to the major markets. However, with urban expansion and conflicting land use issues, the industry is expanding into the Central Coast region. The north coast of NSW is also a major production hub with centres of activity located in Port Stephens, Port Macquarie, Coffs Harbour, and the Tweed Valley. A number of Central Coast and North Coast lettuce growers belong to a successful cooperative export marketing arrangement known as Lotus Red.

A recent trend to emerge in the industry is the establishment of new, large commercial enterprises run by extended family units in regional NSW centres such as Tamworth, Yass and Mittagong. These enterprises are targeting both regional centre markets and markets in the capital cities.

Victoria
While NSW hydroponic production is dominated by lettuce, Victoria is evenly split between cut flowers, tomatoes and lettuce. Popular cut flowers include roses, gerberas, carnations and lisianthus. Flowers are grown in greenhouses, often in a pine bark media using run-to-waste systems.

Production tends to be concentrated in an area around Melbourne and Port Phillip Bay, with pockets of activity in Gippsland, the Mornington Peninsula, the Dandenongs, the Bellarine Peninsula, Seymour and northern Victoria.

The Victorian industry has a number of large commercial hydroponic tomato growers and marketers. These large operations act as packers and marketers for clusters of independent growers and ensure large consistent lines of product are available to customers. For example, in Victoria, Flavorite supply 50% of the hydroponic tomatoes sourced by Coles. Most of Woolworths demand for hydroponic tomatoes is also satisfied by Flavorite. Woolworths market up to four grades of tomato at any one time. Hydroponic produce, including vine-ripened tomatoes, attract the highest prices per unit.

South Australia
The commercial hydroponics industry in South Australia is concentrated on the Adelaide Plains north of Adelaide, and the Fleurieu Peninsula to the south of the State capital. Smaller production areas can be found in major rural centres such as Murray Bridge, Mount Gambier, and on the York and Eyre Peninsula.

The major hydroponic crops grown in South Australia are lettuce, tomatoes and cut flowers. Other important crops include strawberries, cucumber, herbs (Asian and Mediterranean varieties), and Asian vegetables.

Hydroponic growers supply the major Adelaide market, as well as important interstate markets. South Australian growers are a significant supplier of hydroponic tomatoes to Victorian markets where they play an important part in the critical mass equation that is able to supply high quality tomatoes to Victorian consumers throughout the year.

Queensland
Queensland is the second largest commercial hydroponic production state after NSW. Production is dominated by lettuce, flowers and tomatoes. Significant other products include cucumbers and strawberries. Most produce is grown outdoors.

The industry is concentrated in the south-east of the state and services Brisbane and the Gold Coast. There are pockets of growers throughout Queensland including hydroponic strawberry production on the Atherton Tablelands, and cucumbers in Bundaberg and Toowoomba. Cucumbers include Lebanese and continental varieties. They are generally grown in run-to-waste systems utilising the most acceptable locally available media. Hydroponic cucumbers hold a significant share of the total domestic market.

Tasmania
Tasmania has a small, export-orientated commercial hydroponics industry. Major products are lettuce, flowers and tomatoes. Significant other products include cucumbers, capsicums and eggplant. Tasmania has fruit fly-free status which facilitates the export of fresh horticultural produce to countries like Japan.

Western Australia & the Northern Territory
Western Australian production is spread across lettuce, cucumber, flowers and tomatoes. Production occurs in the outer areas surrounding Perth, with some activity at Bunbury and Albany.

There are a handful of hydroponic producers supplying the Darwin and Alice Springs markets in the Northern territory.

Economic analysis
The results of the economic analysis show modest returns for entry-level investment, and that results are consistent with agricultural production for a mature product – that is, hydroponic products are mainstream and widely consumed; hydroponic produce does not attract the very high prices of a new or novel crop or product, although premiums are sometimes available. The report summarises that returns are less than those achieved for highly speculative crops with limited or newly established markets.

It needs to be remembered that the majority of commercial hydroponic growers are competing against conventional soil-based producers with mainstream commodity style products, such as tomatoes, lettuce and cucumbers. The study summarises that improved industry profit is linked to larger scale production, exploitation of niche markets, and on-farm value-adding.

Marketing
Hydroponic product is distributed through all the normal wholesale and retail distribution channels. The Sydney and Melbourne markets handle the bulk of grower sales. Major buyers, including supermarket chains, source hydroponic product predominantly through the wholesale markets, but in some cases they also buy direct from growers.

To facilitate large buyer purchase of hydroponic product, leading edge growers have organised themselves into selling cooperatives to jointly market a line of produce and ensure appropriate product quality. Examples of grower clustering for marketing purposes include Flavorite in Victoria for tomatoes and Lotus Red in NSW for lettuce.

Some hydroponic product, including lettuce and tomatoes, is branded as hydroponics at retail level, but a lot of hydroponic product is sold on the basis of quality and not by promoting its method of production (i.e. hydroponics versus soil). For instance, premium hydroponic tomatoes are often marketed as ‘vine-ripened’ rather than hydroponic; and fancy hydroponic lettuce are marketed as ‘living lettuce’ in a root-on form, rather than as hydroponically grown.

Given that hydroponic product is marketed through all channels, and some does not compete with soil grown produce, it is difficult to isolate price premiums for all the major hydroponic products. However, where hydroponic produce competes against conventional soil-grown products, the hydroponic product tends to occupy a higher price band. Higher unit returns are achieved because not only does the product often look and taste superior, but supply is reliable and virtually year-round for many crops.

Export sales
A small amount of Australian hydroponic produce is exported to regional markets such as Singapore, Hong Kong, Taiwan and Malaysia. Where Australian hydroponic produce exports have been successful, success has been achieved through cooperative marketing efforts, where individual growers have pooled, graded and quality assured product for sale under a single brand name. Generally, at the current time, individual hydroponic growers are not of significant size to tackle export markets.

Advice from NSW Agriculture’s marketing unit, AgSell, is that domestic markets for hydroponic produce need to be better served and understood before individual growers tackle export sales. A stronger domestic base, it is argued, will provide a platform for export sales and absorb any produce that cannot be exported. Furthermore, it needs to be remembered that the bulk of South-East Asian demand for both lettuce and tomato is for low-grade ‘commodity’ style product for the hamburger market..

Industry constraints
According to the report, the Australian industry is successful as a commercial producer, but to build on that success, the following constraints need to be addressed:

– Grower cooperation to ensure production volumes, adequate grading and market interest in industry output;
– A retreat from the amateurism that characterises a new or emerging industry, that is, use of substandard equipment and a reluctance to invest/embrace a commercial scale of production;
– Promotion to shift public opinion away from an image of backyard marijuana production and a high chemical input or unnatural systems;
– Information freely available to counter the dubious claims by some industry promoters regarding industry yields and profits. This information together with industry promotion would assist to improve the industry’s image with financial institutions;
– Attention to a constantly shifting and evermore sophisticated market, including one that is starting to demand the low chemical, sustainably produced product that is the industry’s strength. Product branding may be one way of capturing this market;
– Industry education and training at a grass roots level of production is important. This might include education on climate control, crop environmental requirements, and IPM programs within greenhouses;
– Industry data and standards including formal QA procedures or a suitable HACCP assessment; and
– Fulltime professional industry leadership to drive the industry from a strategic position, including formulation and resourcing of an industry strategic plan.

The study concludes that none of these industry constraints are intractable.

Reasons for failure
As previously stated, hydroponics is not a magical production system. It requires more skill to manage than conventional soil-based systems and generates more problems. According to the study, the most common reasons for failure of commercial hydroponic operations are:

– The venture was not established in a realistic economic framework, including manageable loan repayments;
– System design and management were inadequate;
– Yield and quality of produce did not meet budget projections;
– Ignorance of the importance of horticultural knowledge in producing a commercial hydroponic crop;
– Labour requirement was underestimated; and;
– Insufficient attention to marketing. producers enter the sector without establishing market outlets, realistic sale prices, tailoring product to meet demand or investigating brand names.

The study summarises that the industry has grown rapidly from a zero base over the last 25 years. False starts and setbacks associated with dubious means of promotion in the 1980’s and early 1990’s have been overcome and the industry is fast reaching critical mass.

Global trends
The RIRDC study also focussed on characteristics and trends in global industries. The key messages to emerge from the report are:

– The commercial hydroponics industry has grown four- to five-fold in the last 10 years, and is currently estimated at between 20,000 and 25,000 ha with a farm gate value of US$6 to $8 billion;
– Production is focussed in affluent countries with discerning consumers (The Netherlands, Spain, Canada, Japan, UK, USA, Italy, NZ and Australia), or countries which have access to these markets (Mexico and China);
– Worldwide, there are a limited number of crops grown hydroponically. Tomatoes, cucumbers, lettuce, capsicum and cut flowers are the most important commercial crops;
– Hydroponics has embraced Integrated Pest Management and is moving away from run-to-waste systems with their potential for environmental problems;
– Industry success in the short to medium term will come from a market focus, not a breakthrough in hydroponics technology;
– North American expansion is currently ‘production push’ and is set for an expanded period of low returns if a Dutch-style market focus is not brought to their production;
– Competition on the domestic Australian market can be expected from NZ, and possibly Holland, in the short to medium term; and
– International integration of production and marketing will ‘shut out’ producers who are not sufficiently large-scale or part of a cluster arrangement.

The report concludes that the Dutch industry is an efficient industry model for Australia to emulate.

An overview of world production area, systems used and crops produced, updated from Hanger 1990 (AHA Proceedings, 1993), is provided in Table 3. A brief discussion follows of the world situation for key indicator countries. Data limitations mean some figures were not available for either the historic or current period.

Key points from Table 3

– Production is dominated by developed western countries, Mexico (which exports product to North America), and China (which exports product to Japan);
– The world area of hydroponic production has increased four- to five-fold in the last 10 years;
– Rockwool and NFT systems dominate production;
– There are a limited number of crops grown commercially using hydroponics and these are largely the same worldwide; and
– The most important commercial hydroponic crops are tomatoes, cucumber, cut flowers, lettuce and capsicum.

Western Europe
Holland
The Dutch are the recognised world leaders in commercial hydroponics. Holland has a total hydroponic production area of some 10,000 ha made up of 13,000 mostly family-based holdings that employ an estimated 40,000 people (Netherlands Department of Environment, Food and Rural Affairs, NDEFRA). Hydroponics accounts for 50% of the value of all fruit and vegetables produced in the country. Holland’s most important vegetable/fruit crops are capsicum, tomatoes and cucumbers and production is export focused. Important cut flowers are roses, gerbera, carnation and chrysanthemum. Again, produce is grown for largely export markets (NDEFRA).

Nearly all glasshouse production in Holland is hydroponic. Conversion of greenhouses to rockwool and NFT-based hydroponic systems was necessitated by widespread soil depletion, a build-up of soil disease, salinisation, high water tables and favourable economic returns (Hanger, 1993).

The Dutch hydroponic industry is well serviced with government support for research, training and information. The industry enjoys efficient commercial infrastructure (including provision of production inputs), transport, cluster-based production and marketing systems. In the face of rising competition, especially from lower cost southern Europe, Dutch growers have moved away from employing brokers and auction sales and towards direct contracting with major retailers (NDEFRA).

The Dutch government has recently legislated to reduce the number of chemicals registered for application to food crops from 600 to 200 and Dutch hydroponic producers have responded by developing, implementing and marketing produce under Integrated Pest Management (IPM) systems. More than 70% of Dutch hydroponic production is now produced using IPM, and for tomatoes and capsicum it is more than 90%. IPM relies on the use of natural predators – ichneumon flies, bugs, spiders, mites and ladybirds – rather than chemicals to control harmful insects. If reduction in availability of registered agricultural chemicals becomes a worldwide trend, then hydroponics is favourably placed for a major period of growth (van Os et al. 1999).

The Dutch hydroponic industry is characterised by Hanger (1990), Carruthers (1999) and NDEFRA (2001) as having:

– A history of glasshouse production that facilitated adoption of hydroponic systems;
– Efficient and established crop production and marketing systems that made commercialisation of hydroponics possible;
– A willingness by producers to fully commit to new and best practice technology;
– Government support for the industry in the form of assistance with an appropriate legislative environment, training and information provision;
– A greenhouse industry that was concentrated over a relatively small area and was therefore easy to service;
– Market demands determining production;
– Producer specialisation and therefore leading edge efficiency in a single crop;
– Clusters of like producers who jointly market produce and share information and experiences;
– Increasing business size over time and glasshouses now measured in hectares rather than metres squared;
– Continuous productivity improvement including cost control and therefore decreasing unit cost price;
– Quality control systems and branded product marketing, including the butterfly symbol to signify low chemical usage/use of IPM; and
– Marketing based on product quality rather than hydroponics as a production system.

Trends in the Dutch hydroponic industry are summarised by the Netherlands Department of Environment, Food and Rural Affairs as including:

– Increasing influence of the market on production, i.e. contract production for retailers, fewer middlemen;
– Increasing social pressure for a product that is produced without chemicals, “in-harmony” with nature, use of IPM;
– Rationalisation and increasing business size;
– Quality control systems, objective definition of quality and accurately predicted harvest times;
– Full automation of glasshouses, research on energy efficiency;
– Additional Government funding of research on floriculture and horticulture.

The study concludes the Dutch industry provides a useful model for the further development of Australian commercial hydroponic production.

Spain
Spanish hydroponics has grown rapidly on the back of a fast growing horticultural sector. The area of Spanish greenhouses now stands at 30,000 ha and it is estimated that some 12% or more of this area is dedicated to hydroponic production (Ministry of Agriculture, Food and Fisheries Spain).

Greenhouse production in Spain has grown with the adoption of best management practice and technology from Holland and the UK combined with EC market access, a favourable year-round climate and lower labour costs.

Initially, Spanish hydroponic production was constrained by poor support infrastructure, shortages of nutrient solution and early failures with nursery stock. However, once these initial difficulties were addressed, and using the Dutch industry as a model, it is anticipated that the Spanish industry will continue to grow rapidly over the short to medium term (Ministry of Agriculture, Food and Fisheries Spain).

Germany
The German production industry is small and in the past hydroponic production was not well regarded. Pushed by the Greens, there was a perception in Germany that hydroponic production was not natural and that it was reliant on chemical inputs. At the time, much of Germany’s imports were from Holland who responded by emphasising that their produce was free from many agricultural chemicals. The Dutch do not market their product as hydroponically grown; rather, they focus on the ‘clean and green’ image they have established for their produce (Donnan, 2001).

The RIRDC study stresses the importance of marketing produce on the basis of its qualities (e.g. flavour, freshness and visual appeal), or to increase consumer understanding of the beneficial qualities of hydroponic produce (e.g. lower chemical and water usage, sustainability of production, better flavours in fruit and vegetables), so that the actual production method does not work against growers.

North America
Canada
Canada has rapidly embraced commercial hydroponic production, expanding in total greenhouse area from as little as 100ha in 1987 to 1,574ha (3,886 acres) in 2001. Most greenhouse production is under plastic rather than glass due to the relative lower cost of production. Area under plastic was 1,075ha (2,653 acres), and area under glass was 499ha (1,232 acres). Sales from greenhouse products, (flowers, plants and vegetables) were $1.7 billion in 2000, up 18% over 1999 (Economic Digest, June 2001).

Hydroponics is the most popular method of growing vegetables in glasshouses in Canada. Canadian production systems utilize rockwool, perlite and NFT for the production of tomatoes, cucumber and capsicum. Some 50% of tomatoes and capsicum and 25% of cucumbers produced hydroponically are exported to the United States (Khosla, 1999).

Hydroponic production has grown in popularity with Canadian commercial vegetable producers because it is a less labour intensive way to manage larger areas of production, and an efficient way to control inputs and manage facilitates for pest and diseases. Hydroponics eliminates the need for soil fumigants and can increase yields of popular vegetables by up to 100%. (Department of Agriculture and Agri-food, Canada website 2001).

According to the Department of Agriculture and Agri-food, Canada (website 2001) and others (including Jensen, 1999 and Sullivan and Garleb, 1999), industry trends include:

– Continued conversion of conventional soil-based greenhouses to hydroponics;
– Use of IPM rather than chemicals such as methyl bromide;
– Increasing greenhouse size, the average size of a commercial Canadian hydroponic operation in already around 1.5 ha;
– An increasing need to further differentiate hydroponic product on quality attributes;
– Fight back from soil growers – the quality of field tomatoes is improving and sale price has always been very competitive; and;
– Export markets threatened by expansion of greenhouses in the US and Mexico.

Marketing and product differentiation are key factors in the Canadian industry, export and home markets are quickly lost if these issues are not constantly addressed. The study concludes breakthroughs in industry prosperity will be driven by marketing rather than further improvement in technology.

United States of America
United States crops and production techniques are similar to those in Canada. However, the industry has been slower to develop in the US. Jensen and Collins (1985) attribute this to:

– A diverse climate – fresh produce can be grown somewhere on mainland USA anytime of the year (unlike Europe and Japan with defined seasons);
– Rapid and effective transport;
– A perception of high energy costs associated with hydroponics;
– Stigma associated with historically high levels of chemical usage; and
– High levels of technical and economic management required for profitable production.

In the last three to five years there has been a major turnaround in the United States, perception of commercial hydroponic production, with industry promoters and advocates marketing improved technology and management. This in turn has led to something of a production push, as different from a market-led approach to hydroponic production. Sullivan and Garleb (1999) point to an industry at the cross roads with high potential for continued expansion, if a strategic approach to market development is taken, but with high risks of over-supply, low prices and marginal returns under existing production driven approaches. US industry trends (sourced from USDA website) include:

– US government targeting emerging agricultural systems like hydroponics for support;
– Increasing planting densities to constrain root area and save rockwool costs, maximise control over nutrition, pH, aeration and root diseases;
– In the future, all systems will be closed, with no drainage to waste, preventing any loss of mineral elements and the contamination of groundwater; and
– For health reasons, hydroponic systems may be used to reduce nitrogen levels in leafy vegetables at harvest. This may be especially important in Europe for leaf crops grown under low winter light intensities (Jensen, 1999).

The study concludes that production in the US is currently expanding at a rate that is not economically sustainable without urgent attention to market development.

Asia and New Zealand
East and South East Asia
Significant producers in Asia include Singapore, Taiwan, Japan and China who export produce to Japan. Asian countries that import hydroponic produce include Hong Kong, Korea, Taiwan and Malaysia.

In Japan, hydroponic production is vertically integrating with the food-processing sector. Produce is destined for sandwiches and side dishes and only a small percentage retails on supermarket shelves. Production is sanitised and sealed to the level of food processing plants. The industry is a major utiliser of IPM systems and is largely chemical free. Sanitisation and low or no chemical usage is extremely important to Japanese consumers who are prepared to pay prices 20-30% higher than those received for conventionally grown produce. Exports of fresh hydroponic produce from Australia to Japan from all but Tasmania are restricted by the presence of fruit fly on the Australian mainland.

While Singapore, Malaysia, Hong Kong and Taiwan markets offer potential for produce exports, the study concludes opportunities in Japan are limited under current sanitary-photosanitary arrangements.

New Zealand
New Zealand is a major producer of greenhouse, and more recently, hydroponic fruit, vegetables and cut flowers. Almost all New Zealand greenhouses are now hydroponic. The industry is efficient (best practice management and technology), large scale and export oriented. A significant percentage of the technology employed in Australia for commercial hydroponic production is NZ in origin. The NZ government encourages the development of the New Zealand industry and policies are in place to facilitate industry growth in peri-urban areas.

The study concludes that NZ will be competing in the Australian market with efficiently produced, high quality hydroponic produce in the short to medium term.

International Trends in the Industry
The study highlights the following worldwide trends in horticultural marketing and production as affecting the future of commercial hydroponics:

– The internationalisation of the supply of fresh fruit and vegetables. Global specialist food companies are seeking large continuous volumes of produce. These same companies are then capable of packing, handling and distributing this produce worldwide;
– The extension of this trend is that producers who find themselves outside this system will gradually lose access to all but low margin residual markets;
– The Dutch have responded to this challenge by shedding brokers and auction-based sales and establishing forward linkages with international food companies;
– Dutch producers also work in clusters that share information and marketing costs;
– Worldwide, there is a major rationalisation of production as a result of international industry integration.

Conclusion
The RIRDC study concludes that the commercial hydroponics industry is successful and rapidly expanding. It dominates the production of a limited number of crops, and it is probably the fastest growing in the Australian Horticulture sector. The report says the industry is larger than might commonly be perceived and this is because a lot of product is marketed on quality (e.g. vine-ripened) rather than method of production (hydroponically grown).

The report summarises that not all crops are suitable for growing hydroponically and the technology is unlikely to displace soil production for bulk commodity items in the foreseeable future. The industry will continue to grow over the next three to five years, especially if identified opportunities are brought to fruition.

The RIRDC report includes analyses on the economics of commercial hydroponic production. The study profiles five hydroponic ventures in Australia (tomatoes in rockwool, capsicum in sawdust, gerberas in potting mix, lettuce in NFT, and cucumbers in cocopeat), and contrasts features of the Australian industry alongside features of a commercially successful hydroponic operation in the Netherlands. The analysis is provided as a broad indicator of industry profitability and to provide a form of checklist for potential investors.

The study’s authors conclude with a recommendation for the industry to convene through the Australian Hydroponics & Greenhouse Association (AHGA), and to form a working group to examine options to fund the creation of a full-time industry CEO. The Association CEO’s responsibility will be to formulate an industry plan to address both the industry constraints and opportunities identified in the study.

The report, “Hydroponics as an Agricultural Production System” (Project No HAS-9a), is a new addition to RIRDC’s diverse range of over 450 research publications that forms part of its Resilient Agricultural Systems R&D program, which aims to foster agri-industry systems that have sufficient diversity, flexibility and robustness to be resilient and respond to challenges and opportunities. Most RIRDC publications and reports are available for viewing, downloading or purchasing online through its website at: http://www.rirdc.gov.au/

For further information contact:
Rural Industries Research and Development Corporation,
PO Box 4776, Kingston, ACT 2600
Ph: (02) 6272 4539 Fax: (02) 6272 5877
Website: http://www.rirdc.gov.au/

References
Bailey, N. 1999
Report on a Survey of the Australian Hydroponic Growing Industry, Survey of Hydroponic Producers, 1997, HRDC, Gordon, NSW.

Donnan, R. 1993
Planning for Commercial Growing: Hydroponics in Perspective:
Commercial Hydroponics in Australasia, AHA, 1990.

Donnan, R. 1999
Hydroponics around the world, Practical Hydroponics & Greenhouses, July/August 1998: 18-25.

Hanger, B. 1993
Hydroponics: The World, Australian, and South Pacific Islands Scene. Commercial Hydroponics in Australasia. AHA, 1990.

Hassall & Associates. 2000
Hydroponics as an Agricultural Production System, a report for the Rural Industries Research and Development Corporation, Barton, ACT. http://www.rirdc.gov.au/

Khosla, S. 1999
Hydroponic in Ontario, Canada: International Symposium on Growing Media and Hydroponics, Ontario, Canada, 19-26 May 1997, Ed AP Papadopoulos. Acta Hort. 481: 739-747.

Van Os, E and Benoit, F. 1999
Horticulture and hydroponics, International Symposium on Growing Media and Hydroponics, Canada, 1997.

Website Resources
Rural Industries Research and Development Corporation

Agriculture and Agri-Food Canada. Website: http://www.agr.gc.ca/  Ω

PH&G March/April 2002 / Issue 63


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