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Water Resources Management

Erschienen in:

01.09.2012

Investment in Irrigation Systems under Precipitation Uncertainty

verfasst von: Christine Heumesser, Sabine Fuss, Jana Szolgayová, Franziska Strauss, Erwin Schmid

Erschienen in: Water Resources Management | Ausgabe 11/2012

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Abstract

Efficient agricultural water management is indispensable in meeting future food demands. The European Water Framework Directive promotes several measures such as the adoption of adequate water pricing mechanisms or the promotion of water-saving irrigation technologies. We apply a stochastic dynamic programming model (SDPM) to analyze a farmer’s optimal investment strategy to adopt a water-efficient drip irrigation system or a sprinkler irrigation system under uncertainty about future production conditions, i.e. about future precipitation patterns. We assess the optimal timing to invest into either irrigation system in the planning period 2010 to 2040. We then investigate how alternative policies, (a) irrigation water pricing, and (b) equipment subsidies for drip irrigation, affect the investment strategy. We perform the analysis for the semi-arid agricultural production region Marchfeld in Austria, and use data from the bio-physical process simulation model EPIC (Environmental Policy Integrated Climate) which takes into account site and management related characteristics as well as weather parameters from a statistical climate change model. We find that investment in drip irrigation is unlikely unless subsidies for equipment cost are granted. Also water prices do not increase the probability to adopt a drip irrigation system, but rather delay the timing to invest into either irrigation system.

Vorheriger Artikel Study on the Trade-Off between Ecological Base Flow and Optimized Water Supply

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In this section, profits for an irrigation system are calculated for the case that the irrigation system is switched on. This implies that it is used optimally throughout the year. Optimal use is determined endogenously by the EPIC model (cp. section 2.2.).

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Although the production of corn results in relatively high dry matter crop yields on both soil types, it yields relatively low average profits compared to, for instance, carrots production which has a relatively low dry matter crop yield but yields high average profits. Amongst others, this difference in profits can be explained by varying revenues, a product of fresh matter crop yields and commodity prices. Corn has a low dry to fresh-matter conversion coefficient of 1.17 and a relatively low average commodity price of 121.8 €/t. In contrast, dry to fresh matter crop yields of carrot production are converted by a factor of 8.3 and subject to commodity prices of 236 €/t.

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Titel: Investment in Irrigation Systems under Precipitation Uncertainty
verfasst von: Christine Heumesser
Sabine Fuss
Jana Szolgayová
Franziska Strauss
Erwin Schmid
Publikationsdatum: 01.09.2012
Verlag: Springer Netherlands
Erschienen in: Water Resources Management / Ausgabe 11/2012
Print ISSN: 0920-4741
Elektronische ISSN: 1573-1650
DOI: https://doi.org/10.1007/s11269-012-0053-x

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