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Economic analysis of irrigation re-use systems in the Macalister Irrigation District of Eastern Victoria

  • Myers, Ben D.
  • Tarrant, Katherine A.
  • Ho, Christie K.M.
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    Irrigation re-use systems are a common way of improving water use efficiency on irrigated dairy farms in the Macalister Irrigation District. A partial budget analysis of installing a range of irrigation re-use systems on an existing dairy farm was conducted using a case study approach. Two re-use dam sizes were tested – 6 ML and 9 ML. The analysis quantified the benefits of installing a re-use system through growing and consuming additional grazed pasture. There are also potentially other benefits of installing a re-use system both on and off farm, including improved irrigation management and reduced nutrient transfer from the capture area. The analysis found that irrigation re-use systems were almost always a good investment, regardless of the volume of water re-used or the amount of additional pasture consumed. The 9 ML dam had some economies of size, and therefore a lower pasture response per megalitre of water re-used was needed to meet the decision criterion (10% nominal internal rate of return). Only in the situation where both the value of pasture and percentage of water re-used were low ($100/t DM and 10% respectively), was the investment not justified on economic grounds. For a 6 ML re-use dam, a pasture price of $150/t DM and a re-use rate of 10% was still able to achieve a nominal internal rate of return of 12%.

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    File URL: http://purl.umn.edu/131750
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    Article provided by Australasian Farm Business Management Network in its journal AFBM Journal.

    Volume (Year): 09 (2012)
    Issue (Month): 1 ()
    Pages:

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    Handle: RePEc:ags:afbmau:131750
    Contact details of provider: Web page: http://www.csu.edu.au/faculty/science/saws/afbm
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