Soilless Agriculture Practices such as Hydroponics and Aquaponics
Soilless Agriculture Practices such as Hydroponics and Aquaponics
Business Model Description
Invest in production of agricultural goods through soilless and pesticide-free agricultural methods such as hydroponics and aquaponics to conserve water while increasing quality of yield
Expected Impact
Reduce agricultural water consumption by 95% while greatly increasing yield.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Tunisia: South-West
- Tunisia: Centre-East
- Tunisia: South East
- Tunisia: North-East
Sector Classification
Food and Beverage
Development need
Tunisia has limited natural resources of water, soil and fisheries, and is also highly exposed to climate change, hindering food security. Degradation of land and water resources, desertification and loss of biodiversity, inappropriate use of pesticides and fertilizers, and lack of modernization prevent increase in added value with significant consequences on livelihoods. (1,2)
Policy priority
The 5-Year Development Plan (2016-2020) and National Climate Change Adaptation Plan intended to boost agriculture's contribution to Tunisia's growth by increasing agricultural activity's adaptability and bolstering food security. (3,4) Stimulus programs are also suggested for agriculture, since it employs 14.4% of the workforce and provides up to 10.1% of GDP (5).
Gender inequalities and marginalization issues
Rural women and youth consitute the most vulnerable segment of farmers (6). Rural women contribute in a variety of ways to their families' income, in addition to household chores. These activities are largely underpaid or little compensated.
Rural women often encounter difficulties due to societal norms and gender-based prejudice, which complicates their access to money, markets, and services (3).
Investment opportunities introduction
In the first 11 months of 2021, 475.1 million TND (USD 164 million) of private agricultural investments were made, which shows a 26.5% increase compared to the same period of the previous year (7). Moreover, recent investment-related legislation places a premium on investor rights and provides incentives to attract investment.
Key bottlenecks introduction
COVID-19 had severe consequences on agriculture, including input supply disruptions, challenges in vital sectors, marketing and supply disruptions, logistical issues, and border closures (8). Structural restrictions affect agriculture, including poorly organized value chains, restricted access to funding, and severe water scarcity paired with low soil fertility (3).
Food and Agriculture
Development need
Tunisia is one of the world's twenty poorest countries in terms of water resources, with agriculture using more than 80% of its available water (9). Soilless agriculture uses 95% less water and is twice as fast to produce fruit as traditional agriculture. This technique is a water-saving solution that may also increase access to high-nutrient foods (10).
Policy priority
Soilless cultures have existed in Tunisia for more than thirty years (11). Tunisian government is often acknowledged by donors for the far-sighted and proactive policies established since the 1970s to collect and save water, especially in the agricultural sector, which is one of the largest consumers of water resources (12).
Gender inequalities and marginalization issues
This method has high yield and labor efficiency, along with high quality products (13). However, the initial investment cost is high, which may cause a problem since the majority of Tunisian farms are small-scale (3). It is well established that marginalized people are relatively unable of competing with high yield techniques (14).
Investment opportunities introduction
Hydroponics is a rapidly growing industry that is expanding exponentially on a daily basis. It has amassed a sizable market share in a short period of time (15). Soilless farming is ideal for tomatoes. It may also be used for a variety of crops, including cucumber, herbs and aromatic plants, green vegetables, as well as flowers and decorative plants (11).
Key bottlenecks introduction
Inıtial investment costs are higher than conventional agriculture practices. Moreover, in order to practice soilless agriculture, medium to high expertise is needed (13). Finally, some experts believe that hydroponics results in products lacking in flavor (10).
Agricultural Products
Pipeline Opportunity
Soilless Agriculture Practices such as Hydroponics and Aquaponics
Invest in production of agricultural goods through soilless and pesticide-free agricultural methods such as hydroponics and aquaponics to conserve water while increasing quality of yield
Business Case
Market Size and Environment
10% - 15%
The global aquaponics market is expected to grow at a CAGR of 12.8% from 2019 to reach 1.4 billion dollars by 2025 (17).
Indicative Return
15% - 20%
Experts in the reigon point to a return over investment around 15-20%.
Investment Timeframe
Short Term (0–5 years)
The payback period depends on the types of crops on average between 3-5 years.
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Capital - CapEx Intensive
Market - Highly Regulated
Impact Case
Sustainable Development Need
Agriculture is using more than 80% of Tunisia's already scarce water resources (9). The World Resources Institute's water stress index ranks Tunisia among the top 33 countries out of 167, with less than 450 cubic metres per person per year with below 500 indicating absolute scarcity (21,22).
Gender & Marginalisation
Economic wellbeing and access to water in Tunisia were previously studied in an article. The findings indicate that "water poverty" is more prevalent inland than near the coast, despite the fact that the interior receives more rainfall (23).
Water scarcity in Tunisia's interior is limiting crop yields and farmers' profit margins. This is devastating for the region's economy, which is built on farming. Water scarcity is contributing to the economic divide between prosperous coastal regions and impoverished interior governorates (23).
Expected Development Outcome
Farming without using soil is predicted to use 95% less water than conventional agriculture, yield double the amount of fruit in the same amount of time, and, as a result, boost general access to high-nutrient foods (10).
Gender & Marginalisation
This farming method is expected to increase crop yields and farmer profit margins, particularly in Tunisia's interior regions where water poverty is severe.
Primary SDGs addressed
2.4.1 Proportion of agricultural area under productive and sustainable agriculture
2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size
6.4.1 Change in water-use efficiency over time
6.4.2 Level of water stress: freshwater withdrawal as a proportion of available freshwater resources
10.16 US dollars per cubic meter
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
People
Public sector
Outcome Risks
Significant electrical energy consumption due to high lighting needs, numerous electronic systems and air conditioning (11).
Increased agricultural output may generate increased agricultural waste with significant environmental footprint (24).
Gender inequality and/or marginalization risk
Impact Risks
The complicated and detailed nature of the production activities might endanger the activities being delivered as planned and thus risk the delivery of impact.
Producers may at any point switch from soilless agricultural practices back to conventional farming methods, risking the endurance of the positive impact.
Impact Classification
What
Positive results are likely to include reduction in water waste up to 95%, increased agricultural production and food security, as well as enhanced profit margins for farmers.
Who
Farmers who live in areas with limited access to water
Risk
While soilless agriculture model is proven, the appropriate delivery and the endurance of activities require consideration.
Impact Thesis
Reduce agricultural water consumption by 95% while greatly increasing yield.
Enabling Environment
Policy Environment
Tunisia's 5-Year Development Plan (2016-2020) seeked to increase agriculture's contribution to the country's growth by ensuring the sustainability of natural resources and bolstering food security, among other goals (25).
The 2017 National Water Sector Report offers an overview of the sector in Tunisia. It assesses water resources, institutional structure, and efforts. The study is a tool for stakeholder engagement, emphasizing the necessity for technology transfer and PPPs in agriculture (25).
The 2007 National Strategy for Farm Sector and Ecosystem Adaptation to Climate Change recommends strategies to increase agricultural sector resilience, incl. trading blue credits, which entails the exchange of water usage rights. Unused water rights may be sold to others (25).
Financial Environment
Financial incentives: In agriculture and fisheries, there is a 15% investment premium on medium and large projects and 30% on small projects up to 1 million TND (USD 350,000) (26). Tunisia encourages foreign investors to pursue sustainable development; with an asset equal to 50% of the investment, up to 300,000 TND (104,000 USD), given to eco-responsible initiatives.
Fiscal incentives: For a period of 10 years, profits generated from agricultural direct investments are completely deducted from taxable income.
Other incentives: 30% of agricultural export turnover may be sold on the local market. Customs and duties on imported equipment are waived. Imported and locally bought equipment is exempt from VAT and consumption taxes.
Regulatory Environment
Tunisia's 2014 Constitution guarantees the right to water. Water conservation and sensible usage are both a governmental and societal responsibility.
The Investment Law n°2016-71 on September 30, 2016 allows for two incentive programs. Article 20 of provides for a first regime for national interest projects, while Article 19 provides for projects including direct investment activities.
Government Decree 2017-389 defines projects of national interest as those contributing to a national economic priority (incl. agriculture) and satisfy one of the following criteria: investment of 50+ million dinars; creation of 500 new employment each year for three years.
Tax Incentives Law n°2017-8 of 14 February 2017
Marketplace Participants
Private Sector
Souaqi Farms, Grow It Yourself (GIY), Tunisie Aquaponie
Government
Agency for the Promotion of Agricultural Investments (APIA), Directorate of Veterinary Services and Bureau of Planning and Hydraulic Equilibrium & Directorate of Agricultural Production (Ministry of Agriculture), Aquaculture Technical Center (CTAQUA)
Multilaterals
Food and Agricultural Organization (FAO), International Fund for Agricultural Development (IFAD), African Development Bank (AfDB), European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC).
Non-Profit
Tunisian Union of Agriculture and Fisheries (UTAP), Small Scale Fisheries Tunisia (ATDPA), International Union for the Conservation of Nature (IUCN), Technical Center for Protected and Geothermal Crops (CTCPG), Aquaculture Technical Center (CTAQUA)
Public-Private Partnership
Africa Agriculture and Trade Investment Fund (AATIF)
Target Locations
Tunisia: South-West
Tunisia: Centre-East
Tunisia: South East
Tunisia: North-East
References
- (1) The Republic of Tunisia, 2021. Voluntary National Review 2021. https://sustainabledevelopment.un.org/content/documents/279442021_VNR_Report_Tunisia.pdf
- (2) The Republic of Tunisia, 2019. Voluntary National Review 2019. https://sustainabledevelopment.un.org/index.php?page=view&type=111&nr=23372&menu=35
- (3) Minister of Agriculture, Water Resources and Fisheries. FAO 35th Regional Conference for the Near East. https://www.fao.org/3/cb1226en/cb1226en.pdf
- (4) Republic of Tunisia, 2018. Economic Recovery Plan 2019-2020. http://www.cae.gov.tn/wp-content/uploads/2019/08/Plan-de-relance-V-Finale-12-oct.pdf
- (5) French Development Agency, 2021. North Africa Regional Strategy 2021-2025. https://www.afd.fr/sites/afd/files/2021-03-02-49-37/strategie-regionale-afrique-nord-2021-2025.pdf
- (6) FAO, 2021. FAO supports a new startup that facilitates market access for small farmers and Tunisian artisans. https://www.fao.org/neareast/news/view/en/c/1413975/
- (7) APIA, 2021. 475.1 Millions de dinars d'investissements agricoles privés durant les onze premiers mois de l'année 2021. http://www.apia.com.tn/actualites/detail/179
- (8) SwitchMed, 2018. Tunisia. https://www.unido.org/sites/default/files/files/2020-01/SwitchMed%20Magazine%20-%20Tunisia.pdf
- (9) Switchmed, 2021.
- (10) African Manager, 2021. Agriculture: Des cultures hors sol sont possibles en Tunisie, assure un chercheur. https://africanmanager.com/agriculture-des-cultures-hors-sol-sont-possibles-en-tunisie-assure-un-chercheur/
- (11) Kapitalis, 2021. L'agriculture hors-sol, la reponse au deficit hydrique chronique. http://kapitalis.com/tunisie/2021/03/13/lagriculture-hors-sol-la-reponse-au-deficit-hydrique-chronique/
- (12) Siyada, 2021. Quand les monocultures envahissent les périmètres irrigués et menacent la biodiversité tunisienne. https://www.siyada.org/fr/siyada-board/nourriture-eau-et-terre/quand-les-monocultures-envahissent-les-perimetres-irrigues-et-menacent-la-biodiversite-tunisienne/
- (13) Gonnella,M.;Renna,M., 2021. The Evolution of Soilless Systems towards Ecological Sustainability in the Perspective of a Circular Economy. Is It Really the Opposite of Organic Agriculture? Agronomy. https://doi.org/10.3390/agronomy11050950
- (14) Metabolic, 2017. The Global Food System: An Analysis. https://www.metabolic.nl/publication/global-food-system-an-analysis/
- (15) Grow It Yourself. Formations. https://growit-yourself.com/formations/
- (16) African Manager, 2021. Lancement de Celavie, projet italo-tunisien d’aquaponie. https://africanmanager.com/lancement-de-celavie-projet-italo-tunisien-daquaponie/
- (17) Aquatic Network, 2019. Global Aquaculture Market Predicted to Grow to USD 274.8 billion by 2025. https://www.aquanet.com/blog/global-aquaculture-market-predicted-to-grow-to-usd-274-8-billion-by-2025-83
- (18) Oxford Business Group. https://oxfordbusinessgroup.com/tunisia-2019-0.https://oxfordbusinessgroup.com/overview/green-shoots-government-programmes-and-private-investment-sector-improve-irrigation-and-boost
- (19) World Crunch, 2020. In Tunisia, A Digital Revolution For Agriculture Takes Root. https://worldcrunch.com/tech-science/in-tunisia-a-digital-revolution-for-agriculture-takes-root
- (20) NABC, 2018. Tunisia Business Opportunity Report Agriculture. https://nabc.nl/wp-content/uploads/2020/08/NABC-Tunisia-Report_FINAL.pdf
- (21) Global Information Society Watch, 2020. Water scarcity in Tunisia: Environmental activism, sustainable development and technology. https://giswatch.org/node/6262
- (22) DW, 2020. Bringing water to Tunisia's struggling farmers. https://www.dw.com/en/bringing-water-to-tunisias-struggling-farmers/a-54082647
- (23) Plackett, Benjamin, 2018. Researchers See Water at Root of Tunisia’s Inequality Problem. Al-Fanar Media. https://www.al-fanarmedia.org/2018/06/researchers-see-water-at-root-of-tunisias-inequality-problem/
- (24) Adejumo et al, 2020. Agricultural Solid Wastes: Causes, Effects, and Effective Management. https://www.intechopen.com/chapters/73517
- (25) UNDP, 2020. Engaging private sector in NDC implementation - Assessment of private sector investment potential for the water sector in coastal areas. https://www.undp.org/content/dam/LECB/docs/pubs-reports/undp-ndcsp-tunisia-private-sector-exec-sum.pdf?download
- (26) Invest in Tunisia. Provided Financial Incentives. http://www.investintunisia.tn/m/En/provided-financial-incentives_11_622