Economic comparisons of variable rate irrigation and fertigation with fixed (uniform) rate irrigation and fertigation and pre-plant fertilizer management for maize in three soils

Authors

Vasudha Sharma, University of MinnesotaFollow
Suat Irmak, University of Nebraska-LincolnFollow

Date of this Version

6-2020

Citation

Published in Agricultural Water Management 240 (2020) 106307

doi:10.1016/j.agwat.2020.106307

Comments

Copyright © 2020 Elsevier B.V. Used by permission.

Abstract

Extensive field research for data collection to conduct economic comparisons of variable rate irrigation (VRI) with fixed (uniform) rate irrigation (FRI) and no irrigation (NI) in combination with three nitrogen application strategies of fixed (uniform) rate fertigation (FRF), variable rate fertigation (VRF) and pre-plant nitrogen (PP) management for maize (Zea mays L.) were conducted. Research was conducted in three soil types [(i) Crete silt loam (S1); (ii) Hastings silty clay loam (S2); and (iii) Hastings silt loam (S3)] for three growing seasons (2015, 2016 and 2017) in Nebraska, USA. For the economic analyses, the average initial investment of the irrigation system and necessary VRI technology, salvage value of the system, total capital investment, total fixed cost, net present value (NPV) and internal rate of return (IRR) were quantified by considering numerous factors/variables, including interest rate, production input cost, longevity of the system, insurance cost, ownership cost and salvage value. Soil types and irrigation management strategies (treatments) had significant impact on grain yield and thus on profitability, NPV, IRR and irrigation system payback period. Net income from FRI management was significantly higher than VRI management in all soil types. The nitrogen treatments did not affect net income in any of the growing seasons. The FRI management strategy had a positive NPV in all soil types whereas VRI management in S2 and S3 had negative NPVs. The negative NPV indicates that the present value of the costs exceeds the present value of future profits at the assumed discount rate (5%). Averaging all three years and three soils, FRI had a substantially higher net income than VRI in most cases. The maximum NPV of $4,882.07 per ha and maximum IRR of 18 % was observed in FRI-FRF treatment. A payback period of ≤10 years was determined for all FRI management treatments while the payback period for VRI management, in most cases, was more than 27 years. While the pay-back period in VRI irrigation system was less than ten years in S1, it was still longer than the corresponding FRI management treatments. Results suggest that the VRI and VRF strategies are not economically feasible in current conditions. For these variable irrigation and fertilizer technologies to be competitive with the FRI and FRF, the cost of the VRI and VRF technology will need to be significantly lower than the current investment costs. While there could be some environmental benefits of VRI and VRF technology, with the current high investment cost of VRI technology and the fact that the grain yields are not improved sufficiently to offset the investment cost, it is not possible for VRI technology to be an economically viable technology for profitable economic net return. This may explain, in part, extremely limited adoption of these technologies by producers currently in large scale production fields.