ECONOMIC EVALUATION OF PROFITABILITY IN ORGANIC PRODUCTION OF CORN IN THE REGION OF ILHA DE SÃO LUÍS IN MARANHÃO

Abstract

This study aimed to evaluate the economic viability of organic sweetcorn production in São Luís municipality, Maranhão State, Brazil. Data were collected considering the first crop results of 2017, and then a cost spreadsheet was prepared. The revenue was determined according to the productivity achieved and the price at which the corncobs were commercialized. The economic indicators [net present value (NPV) and internal rate of return (IRR)] were calculated, taking into account the inputs and outputs of Cash Flow. A sensitivity analysis was carried out showing 15% impact on the values of production costs and on the reduction in revenue. The NPV for this project over a three- year projection was R $ 15,602.95 (Brazilian currency) for an attractiveness rate of 25%. The IRR stayed at 118.15%, and the project can be considered financially viable, facing the risk associated with agricultural activities. In the sensitivity analyzes, the components that showed the greatest impact on the indicators were the reduction in revenue (due to falling prices or productivity) along with reduction of 22.15% in NPV and fertilizer expenses along with reduction of 12.56% in IRR.