Economics, risk, and resource-use efficiency of open versus closed hydroponic systems for vegetable production in arid regions

Introduction Hydroponics is expanding in arid regions to improve water and nutrient use efficiency, with recirculating (closed-loop) designs promising greater circularity. However, the comparative economics, risk profiles, and resource-use trade-offs of open versus closed hydroponic configurations remain largely unexplored under real farm conditions in arid environments. Methods Using primary data from 35 United Arab Emirates (UAE) farms participating in a government conversion program, this study compares drain-to-waste (open) and closed-loop systems for tomato and cucumber production. This study’s novelty lies in integrating gross-margin analysis with stochastic risk tools and per-plant resource-intensity metrics into a unified, crop-specific decision framework applied under arid land conditions. Gross margins are estimated, and stochastic dominance (FSD, SSD, SDRF) and stochastic efficiency with respect to a function (SERF) are used to rank production options by risk-adjusted performance. Results Results are crop-specific: closed-loop cucumber is preferred across plausible levels of risk aversion, whereas open-system tomato performs better in terms of risk–return. Resource-intensity metrics indicate large per-plant savings with closed loops, including nutrients (−66% for tomato and −40% for cucumber) and cooling water (−33% for tomato and −23% for cucumber). In comparison, irrigation water use for cucumber increases slightly (+6%). Discussion These results provide a decision framework that aligns circular resource gains with risk-adjusted economics, indicating when to prioritize closed-loop cucumber and when to pair open-system tomato with circular practices in arid food systems.