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Irrigation Pays in Protecting Crop Revenues in the Northeast

An Economic Case Study at Intervale Community Farm

After severe drought in much of the Northeast last year, this summer reminds us that the trend in the Northeast is for more rainfall. However, this rain is more often occurring in heavy downpours between periods of hot and dry weather. With this extreme and variable wet weather taking its toll on farms, a key question is: Does field crop irrigation make sense as a farm strategy given the number of wet summers in the Northeast?

To find out, USDA Natural Resources Conservation Service, UVM Extension Center for Sustainable Agriculture and the Intervale Community Farm (ICF) in Burlington, Vermont joined forces. Andy Jones, ICF farm manager, explains, “On a 100-year floodplain, ICF soils have long been recognized as productive farmland, albeit subject to flooding.  The irony is that much of the floodplain that ICF farms is composed of sandy soils, which drain well but need to be irrigated during dry periods.”

The economic costs and benefits of irrigation at ICF were analyzed with data collected from 2006 to 2016. To estimate irrigation needs in the years when data was not available, Cornell University’s Climate Smart Farming (CSF) Water Deficit Calculator was used to model when plant stress was likely to occur. In all but one year, the data showed that the benefits of avoided crop loss are greater than the costs of irrigation. This case study shows that if ICF can protect at least 3.5% of its crop revenues with irrigation as a risk management strategy, it will cover its costs of irrigation.

This study shows that irrigation is profitable despite on-going setup costs and variable summer weather.  Overall, the total net benefits per irrigated acre over 11 years was $33,121. The total farm benefits over all irrigated acres over 11 years were just over $500,000. 

Despite yearly rainfall, ICF would suffer reduced vegetable yields and quality without extra water. A range of irrigation scenarios were considered in order to identify thresholds of when irrigation is needed the most and the least. If all the years were “dry”, total farm benefits over 11 years due to irrigation would have exceeded $800,000. Even if all years were “wet”, total farm benefits would have remained positive at almost $70,000. The main reason for value in wet years is that these years may still have dry periods during critical crop growth stages when irrigation provides important benefits.

This input was used to create the following partial budget

Intervale Community Farm Irrigation Partial Budget in 2016 dollars (average $/acre/year)
Increases in Net Income Decreases in Net Income
Average Increase in Income Average Increase in Cost
Item Item
Avoided Production Losses $3,793 Irrigation Equipment $285 
  Annual Material (plastic, drip tape, etc.) $227 
  Annual Operation Costs (Labor & Fuel) $269 
Total Increased Net Income/Acre/year $3,793 Total Decreased Net Income/Acre $782 
Total Net Benefit per Acre per Year $3,011
Total Farm Net Benefits per acre over 11 years  $33,121 
Total Irrigation NET FARM BENEFITS (based upon all acres receiving supplemental irrigation) $508,705
Total Acres Irrigated 10 to 25 acres
Years of data (2006-2016) 11
ICF’s decision to invest in drip and spray irrigation over the past 16 years has been sound. The benefits of reducing losses due to summer water deficits has exceeded the costs of purchasing the equipment, running the pumps, and additional costs of labor and materials associated with managing the system. ICF was also able to keep their investment costs low by purchasing used equipment and by using existing wells. For other farms within the Northeast, the particular net benefits will depend upon their particular cost inputs and other local conditions. Each farm will have its own set of site-specific cost and benefit parameters.
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Image by Jenny Brown