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Economic evaluation of using surge valves in furrow irrigation of row crops in Louisiana: A net present value approach

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  • Adusumilli, Naveen
  • Davis, Stacia
  • Fromme, Dan

Abstract

Addressing irrigation water efficiency continues to emerge as one of the potential solutions to minimize irrigation water use, improve water quality, and enhance soil health. Despite the clear importance of financial information in decision‐making regarding adoption of irrigation tools, little information is available regarding the profitability outlook of such adoption. Lack of assessment of costs and returns could lead to producers resisting adoption citing profit reductions. Hence, a cost-assessment using the financial information is necessary to evaluate the tools’ economic outlook. By using long-term projections of input prices, crop yield, and crop prices, this paper develops a financial analysis of irrigation using surge valves by calculating annual cash flows and net present value. The analysis is based on demonstration plot results and anecdotal estimates related to water savings and yield improvements in corn and soybeans in Louisiana and Mississippi. The positive estimates for net present value indicate that an investment in irrigation efficiency improvement is an economically sound choice. These estimates can enhance the adoption of irrigation‐efficiency improvement practices by providing an initial understanding of the overall profitability independent of short-term management decisions.

Suggested Citation

  • Adusumilli, Naveen & Davis, Stacia & Fromme, Dan, 2016. "Economic evaluation of using surge valves in furrow irrigation of row crops in Louisiana: A net present value approach," Agricultural Water Management, Elsevier, vol. 174(C), pages 61-65.
    • Handle: RePEc:eee:agiwat:v:174:y:2016:i:c:p:61-65
    DOI: 10.1016/j.agwat.2016.04.024
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    1. Evans, R. G. & Girgin, B. N. & Chenoweth, J. F. & Kroeger, M. W., 1995. "Surge irrigation with residues to reduce soil erosion," Agricultural Water Management, Elsevier, vol. 27(3-4), pages 283-297, July.
    2. Schaible, Glenn D. & Aillery, Marcel P., 2012. "Water Conservation in Irrigated Agriculture: Trends and Challenges in the Face of Emerging Demands," Economic Information Bulletin 134692, United States Department of Agriculture, Economic Research Service.
    3. Izuno, Forrest T. & Podmore, Terence H., 1986. "Surge irrigation management," Agricultural Water Management, Elsevier, vol. 11(3-4), pages 279-291, September.
    4. Horst, M.G. & Shamutalov, S.S. & Goncalves, J.M. & Pereira, L.S., 2007. "Assessing impacts of surge-flow irrigation on water saving and productivity of cotton," Agricultural Water Management, Elsevier, vol. 87(2), pages 115-127, January.
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    Cited by:

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    2. Sardaro, Ruggiero & Bozzo, Francesco & Petrillo, Francesco & Fucilli, Vincenzo, 2017. "Measuring the financial sustainability of vine landraces for better conservation programmes of Mediterranean agro-biodiversity," Land Use Policy, Elsevier, vol. 68(C), pages 160-167.
    3. Sara Savi & Stefano Poni & Alessandro Moncalvo & Tommaso Frioni & Irene Rodschinka & Linda Arata & Matteo Gatti, 2019. "Destructive and optical non-destructive grape ripening assessment: Agronomic comparison and cost-benefit analysis," PLOS ONE, Public Library of Science, vol. 14(5), pages 1-24, May.
    4. Naveen Adusumilli & Rowell Dikitanan & Hua Wang, 2019. "Effect of Cost-Sharing Federal Programs on Adoption of Water Conservation Practices: Results from Propensity Score Matching Approach," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-16, July.
    5. Adusumilli, Naveen & Wang, Hua & Dodla, Syam & Deliberto, Michael, 2020. "Estimating risk premiums for adopting no-till and cover crops management practices in soybean production system using stochastic efficiency approach," Agricultural Systems, Elsevier, vol. 178(C).
    6. Luigi Roselli & Arturo Casieri & Bernardo Corrado de Gennaro & Ruggiero Sardaro & Giovanni Russo, 2020. "Environmental and Economic Sustainability of Table Grape Production in Italy," Sustainability, MDPI, vol. 12(9), pages 1-24, May.
    7. Sohoulande Djebou, Clement D. & Conger, Stacia & Szogi, Ariel A. & Stone, Kenneth C. & Martin, Jerry H., 2021. "Seasonal precipitation pattern analysis for decision support of agricultural irrigation management in Louisiana, USA," Agricultural Water Management, Elsevier, vol. 254(C).
    8. Ziolkowska, Jad R., 2018. "Profitability of Irrigation and Value of Water in the Southern High Plains," 2018 Annual Meeting, August 5-7, Washington, D.C. 274355, Agricultural and Applied Economics Association.

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