Irrigation Technology Adoption in the Texas High Plains: A Real Options Approach

Water scarcity has been a significant issue for several decades in the Texas High Plains, with agriculture identified as the main activity contributing to this scarcity. To address this issue, much effort has been devoted to developing and encouraging adoption of sophisticated irrigation systems with high levels of water application efficiency, such as the low energy precision application (LEPA) system, subsurface drip irrigation (SDI), and variable rate irrigation (VRI). In this study, the economic feasibility of these irrigation systems is evaluated in cotton farming in the Texas High Plains using a real options approach. Results find that only the LEPA system is profitable under current conditions. The VRI system is profitable with high cotton prices (above $0.72/lb), while SDI is not profitable under any conditions explored.


Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/21427
Total Pages:
28
Series Statement:
Selected Paper 155874




 Record created 2017-04-01, last modified 2017-08-24

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