Agricultural Economics

Agricultural Economics

Financial Evaluation of Industrial Raisin Production in Sardasht County Under Uncertainty Conditions Using Monte Carlo Simulation Approach

Document Type : Research Paper

Authors
Masoud Abdollahi 1
Foad Eshghi 2
Seyed Mojtaba Mojaverian 1
Tahereh Ranjbar Malekshah 1
1 Department of Agricultural Economics, Faculty of Agricultural Engineering, University of Agricultural Sciences and Natural Resources, Sari
2 Department of Agricultural Economics Sari Agricultural Sciences and Natural Resources University
10.22034/iaes.2025.2046039.2094
Abstract
Investment plays a critical role in fostering economic and social growth and development. Despite challenges in investing across all economic sectors, the food industry holds particular importance due to its impact on food security, waste reduction, and income enhancement for low-income farmers. Given the significance of grapes and their derivatives, as well as their potential to boost non-oil exports, this study aimed to evaluate the financial feasibility of industrial raisin production in Sardasht city under risk conditions. In this research, demand uncertainty was forecasted using data from questionnaires and interviews with 364 grape growers in 2023. The Monte Carlo simulation method was applied to determine the probability distribution of each identified risk. The project was evaluated using two criteria: net present value (NPV) and internal rate of return (IRR). The NPV was calculated at 3 billion, 10 billion, and 2.5 billion tomans under conditions of certainty, risk, and simulated risk, respectively. The corresponding IRR values were 30%, 47%, and 26%, respectively. These results indicate that the proposed project is economically viable under all three scenarios, provided it is financed through a 22% interest rate facility.
Keywords
Risk Assessment
Net Present Value
Internal Rate of Return
Monte Carlo Simulation
Grapes

Subjects

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