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Investment in Water Saving Technology on Horticultural Farms

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  • Mallawaarachchi, Thilak
  • Hall, Nigel H.
  • Phillips, Brian

Abstract

A long run programming model for analysing investment behaviour on perennial crop farms is formulated and applied to citrus and wine grape producing farms in the Murumbidgee Irrigation Area. Prices and technological parameters are defined exogenously, while the optimal replanting pattern of the crops and the optimal mix of irrigation techniques are determined endogenously. The model is used to examine likely investment in water saving irrigation technology at different crop prices and input costs. The results indicate that such investment is a profitable option at current water charges, particularly for those farmers with access to off-farm employment However, the adoption decision will be highly sensitive to potential cost savings. Water-saving technology could become more attractive under higher water charges, but only if the preferred option of farm expansion were not available. The modelling framework, which allows for control over many factors influencing perennial crop investment decisions' has applications in the analysis of the long term consequences of many policy options affecting farm yields or prices.
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Suggested Citation

  • Mallawaarachchi, Thilak & Hall, Nigel H. & Phillips, Brian, 1991. "Investment in Water Saving Technology on Horticultural Farms," 1991 Conference (35th), February 11-14, 1991, Armidale, Australia 145924, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare91:145924
    DOI: 10.22004/ag.econ.145924
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    File URL: https://ageconsearch.umn.edu/record/145924/files/1991-08-05.pdf
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    Cited by:

    1. Mallawaarachchi, Thilak & Quiggin, John C., 2001. "Modelling socially optimal land allocations for sugar cane growing in North Queensland: a linked mathematical programming and choice modelling study," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), pages 1-27.
    2. Mallawaarachchi, T. & Walker, P. A. & Young, M. D. & Smyth, R. E. & Lynch, H. S. & Dudgeon, G., 1996. "GIS-based integrated modelling systems for natural resource management," Agricultural Systems, Elsevier, vol. 50(2), pages 169-189.
    3. Mallawaarachchi, Thilak, 2002. "Assessing Best-Practice Environmental Management Options at the decision scale: a model for technology choice and policy analysis," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 125136, Australian Agricultural and Resource Economics Society.
    4. Qureshi, Muhammad Ejaz & Mallawaarachchi, Thilak & Wegener, Malcolm K. & Bristow, Keith L. & Charlesworth, Philip B. & Lisson, Shaun N., 2001. "Economic evaluation of alternative irrigation practices for sugarcane production in the Burdekin Delta," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 125867, Australian Agricultural and Resource Economics Society.

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