Online Tool Calculates ROI of Drip Irrigation

Recently, American Vegetable Grower (AVG) magazine sat down with Inge Bisconer, Toro Micro-Irrigation’s technical marketing and sales manager, and discussed the “Drip/Micro Payback Wizard,” a FREE online tool that helps growers estimate the cost savings and production increases of drip irrigation.  And since growers are in endless pursuit of cost efficiency and maximizing their crops’ yields, the tool is an excellent resource for growers looking for empirical data on how quickly a drip irrigation system will pay for itself.

AVG: What is the story behind how the online tool –  the payback wizard – that was introduced in 2008, came to be?

Inge: The Drip/Micro Payback Wizard was developed by the Irrigation Association’s Drip-Micro Common Interest Group. The group was interested in finding out the key barriers to the adoption of drip irrigation technology in agriculture. Their research revealed that while most growers recognize the benefits of adopting drip irrigation, they were unsure how long it would take to recover the investment. The research also showed that payback periods less than three to five years were attractive to growers. Since many case studies have shown that the payback period is indeed far less than three to five years, the Drip/Micro Payback Wizard was created to help growers estimate revenue increases and cost decreases that are normally associated with the adoption of drip irrigation, along with potential water savings to farm additional acres.

AVG: What was the role of the Irrigation Association in its creation?

Inge: The Irrigation Association, together with its members, is committed to promoting efficient irrigation and to long-term sustainability of water resources for future generations. The IA provided the forum for the Common Interest Group to work within, and also provided some funding.

AVG: How many irrigation companies were involved in its development of the Payback Wizard and what was their level of participation?

Inge: The project’s primary sponsors were Toro Micro-Irrigation, Netafim, Rain Bird, Robert’s Irrigation, and T-Systems International, and secondary sponsors included the Mazzei Injector Corp. The committee chairperson, vice-chairperson, and volunteers from each sponsor worked together to create the Payback Wizard.

AVG: In a nutshell, the Payback Wizard provides an estimate of how long it will take to recover the costs of investing in a drip irrigation system. Please briefly describe how the system works.

Inge: The Payback Wizard database is populated with estimated investment costs along with cooperative Extension production cost, yield, and revenue data for each crop in each of the 50 states. After the crop, state, acres, current type of irrigation system, and water cost per acre are entered, the Payback Wizard uses this data to generate a report that estimates the payback period on the investment and the additional acres that could be farmed with the water saved. This report may then be printed, or, the user can view the detailed data used to generate the report and edit the values to better reflect a specific production scenario.

AVG: How does the information gleaned from the Drip Wizard help with grower concerns about increases in water prices, water shortages, etc.?

Inge: One of the primary benefits of drip irrigation is improved water and resource use efficiency, i.e. gaining optimum production with a minimum of inputs. Thus, drip irrigation helps alleviate situations where water is expensive or scarce. The Wizard helps growers estimate how much water could be saved and/or how many additional acres could be farmed due to higher application uniformities associated with drip. In addition, the Wizard helps growers estimate how quickly this technology will pay for itself.

AVG: One piece of information that is determined from the analysis is an estimate of how many additional acres can be irrigated with the conserved water. How critical is this information to growers?

Inge: This information is critical where growers are faced with the prospect of limiting the acres planted due to water allocations, water scarcity, or drought. Since drip irrigation technology applies water more uniformly than other methods of irrigation, a grower could possibly plant more acres when using drip than could be planted using other irrigation methods. This is important because more planted acres equates to higher income potential and more efficient use of the grower’s land resources.

AVG: How can the report be customized to reflect individual’s conditions?

Inge: Each line item of the report’s cost, revenue, and investment categories is populated with a default base value and a multiplier that estimates the change that will take place when drip is adopted. In edit mode, all of the base values and multipliers may be changed to more accurately reflect any individual condition.

AVG: If no yield or quality increases are projected, then the payback increases to 3.88 years. How was that figure determined?

Inge: That figure was determined by estimating cost savings alone. If there are no cost savings, and no revenue increases, the Wizard reports that the drip irrigation system investment will never pay for itself. However, in most cases, either a revenue increase or cost savings are realized upon adoption of drip irrigation technology, so a payback period is provided.

AVG: What is one piece of advice you can offer to growers thinking about converting to drip irrigation?

Inge: Drip irrigation systems are typically customized to effectively meet each grower’s unique production requirements. For this reason, it is of primary importance to choose a reputable dealer and manufacturer who will design and configure the right system to satisfy those needs, and who will be on hand to help with installation, operation and maintenance long after the sale is completed.

Click here to use the Payback Wizard online or to download for FREE.

To view the original article by American Vegetable Grower, click here.