Green Master Vegetables Business Plan — Open Field Versus Tunnels

The economics of each system compared on capital, yield, risk and season, and why the plan runs both rather than choosing one.

Open Field Versus Tunnels

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Figure 5. Gross margin per hectare by production system, Year 5.

	Open field	Tunnels
Gross margin per hectare, Year 5	R53’000	R1 460’000
Yield per hectare per crop, Year 5	32 t	100 t
Crops per year	1.8	1.9
Establishment cost per hectare	Roughly R65’000 for drip and land preparation	Roughly R460’000 for structure, drip and fittings
Return on establishment cost	82%	317%
Typical crops	Cabbage, butternut, onion, beetroot, sweet potato	Tomato, sweet pepper, cucumber
Weather exposure	Full. Hail, frost, heat and wind all hit the crop	Substantially protected
Skill required	Moderate	High. A tunnel crop failure is expensive and fast
Area in the plan, Year 5	40.5 ha	4.5 ha
Share of Year 5 gross margin	24.7%	75.4%

Figure 6. Area by production system and tonnage.

Ten per cent of the planted area produces 75 per cent of the gross margin. That single sentence is the most important fact about the production system, and it explains why every gate in Section 10 is about adding tunnel area safely rather than adding hectares quickly.

Why the plan does not simply build tunnels everywhere

On the arithmetic above, every rand should go into tunnels. Three things argue against it for an entry-level operation. Capital: at roughly R460 000 a hectare, 45 hectares of tunnels would need over R20 million before a single crop is planted, more than the entire funding envelope of this plan. Skill: tunnel production is a technical discipline, and a first-time grower who over-commits to it will lose crops faster than an open-field grower, because a controlled environment amplifies management errors as efficiently as it amplifies yields. Concentration: tunnels are a small number of high-value crops sold into a market that can move 30 per cent in a month, so a tunnel-only farm has no diversification at all. The plan therefore adds 1.5 hectares of tunnel a year from Year 3, funded from proven cash flow, and treats open field as the volume base that carries the fixed costs. An operator who has run tunnels successfully for three seasons should revisit this ratio aggressively.

5.1 What would change the ratio

Condition	Evidence required	Consequence
Three seasons of tunnel crops within 10% of yield plan	Recorded yields by tunnel and by crop	The skill objection falls away; accelerate tunnel area
A contracted offtake for tunnel crops	A signed retail or processor agreement at agreed volumes	The concentration objection falls away; price risk is transferred
Grant or concessional funding for structures	An approved Blended Finance or CASP allocation for tunnels specifically	The capital objection falls away; build ahead of cash flow
Water confirmed well above requirement	Independent assessment showing surplus capacity	Tunnels use less water per tonne than open field; surplus favours them
Persistent open-field weather losses	Two seasons of hail, frost or heat damage on record	The risk comparison shifts decisively toward protection

Any two of those conditions together would justify doubling the tunnel programme. None of them can be assumed at the outset, which is why the plan builds the evidence before it builds the structures.

Previous section4. Water: The Binding Constraint

Next section6. Crop Plan and Rotation