Economic efficiency of the organic cinnemon cultivation model

Abstract

This study examines the economic efficiency of the organic cinnamon cultivation model in Trung Son Commune, Phu Tho Province, in the context of sustainable forestry transformation and value-added production development. Based on a combination of household survey data and financial investment analysis, the study employs key indicators including Net Present Value (NPV), Internal Rate of Return (IRR), Benefit-Cost Ratio (BCR), and Equivalent Annual Annuity (EAA) to evaluate the economic efficiency of the model over a 15-year production cycle. In addition, sensitivity analysis was conducted to assess changes in financial efficiency indicators under different discount rates. The results show that the organic cinnamon cultivation model generates high financial efficiency, with NPV exceeding VND 689 million per hectare at a discount rate of 7.2%, and increasing significantly as the discount rate decreases. The EAA and BCR indicators remain high and stable, while IRR reaches approximately 28.43%, reflecting strong profitability and a substantial financial safety margin. The trends in these indicators indicate an inverse relationship between investment efficiency and discount rates, while also confirming the relative stability of the model under changing financial conditions.