Economics of Drip Irrigation Adoption Among Sugarcane Growers: A Farm-Level Cost-Benefit Analysis

Abstract

Drip irrigation is widely promoted to sugarcane growers as a way to save water and raise returns, and farm-level cost-benefit studies are often cited in support. This narrative review asks how far such studies can be trusted to tell an individual grower whether adoption pays. It draws on published work on sugarcane water relations, on irrigation efficiency and water use, on the economics of technology adoption, on discounting, and on the methods used to estimate effects from observational farm data. No new cost-benefit analysis was carried out and no cost or yield figures are reported. The review finds that the verdict of a farm-level account depends heavily on a small set of choices: the discount rate and horizon, whether subsidies are counted as a transfer or a resource cost, how water and power are priced, farm size, and the yield the grower would have obtained anyway. Adopters are also not a random sample of growers, so a simple comparison with non-adopters tends to mix the effect of the technology with the advantages of the farms that choose it. Water saved on the farm may not be water saved in the basin. The review concludes that adoption can pay under identifiable conditions, that claims of general profitability are poorly supported, and it sets out how accounts should be reported so that readers can judge transfer to their own farms.