Economic analyses of implemented tailwater recovery systems in the Lower Mississippi Alluvial Valley

Tailwater recovery (TWR) systems are being implemented on agricultural landscapes to reduce nutrient loss and save water on the landscape for irrigation. These systems are a large financial investment for both the United States Department of Agriculture Natural Resources Conservation Service (USDA NRCS) and private producers with total costs ranging from $400,000 to 900,000. Although economic analyses of TWR systems have been modeled, analyses of implemented TWR systems have yet to be completed. Economic studies are necessary to guide adaptive management of conservation funding for appropriation in methods with the greatest return. Therefore, an analysis was conducted on the costs and benefits of TWR systems by first comparing net present value (NPV) and benefit-to-cost ratios (BCR) of operation scenarios with and without TWR systems, as well as, with and without sediment reduction benefits. Second, the impact of the level of USDA NRCS financial assistance on NPV was evaluated. Three discount rates of 3, 7, and 10% were used on both rented and owned land schemes. Five TWR system scenarios were used in the investigation including dryland, irrigated, irrigation improvements, TWR systems, and TWR systems with external benefits of sediment loss mitigation. NPV and BCRs were positive and greater than one for TWR systems if producers owned the land but remained negative or less than one if land was rented. Beyond improvements to irrigation infrastructure, farms with a TWR system installed lost NPV of $51 to $328 per ha. Therefore, TWR systems are not considered to be economically viable when land is not owned.