The economics of crop production with different irrigation sources was worked out to compare the economic feasibility of irrigation investment with existing and improved technologies. Different irrigation technologies, input and output prices and break-even yields could be important to justify the future of irrigation technology transfer and uptake.
Tanzania
· The cost of irrigation per hectare varies from system to system. In the case of the traditional gravity system the annual (fixed) cost per hectare was US$ 16 compared to US$ 43/ha in the case of the improved gravity system (Table 1).· Total cost of irrigation per hectare was US$ 26 for maize, US$ 27 for beans and US$ 38 for paddy under traditional gravity system and was US$ 53, US$ 55 and US$ 69 respectively under improved gravity systems (Table 1).
· In the case of the manually operated treadle pump the annual cost per hectare was US$ 49 compared with US$ 212 for diesel and US$ 152 for electric powered pumps (Table 2).
· Total cost of irrigation per hectare with 100 percent crop intensity was US$ 126 with the treadle pump, US$ 306 with a diesel pump and US$ 190 with an electric pump for maize. The costs were US$ 268, US$ 306 and US$ 229 for beans with the treadle, diesel and electric pumps respectively (Table 2).
· In the case of paddy, the costs were US$ 227, US$ 436 and US$ 305 respectively with the treadle, diesel and electric pumps. Since farmers normally go for two crops (i.e., at least 150% crop intensity), the profitability will be even higher.
· Irrigated yields are almost two times higher than the rainfed yields. The average yield of irrigated maize and paddy are about 2.5 t/ha and 3.5 t/ha respectively (Table 3).
· Gross margin analyses indicate that beans are comparatively more profitable than maize and paddy. Irrigated crops yield almost four times higher gross margins than rainfed crops. However, paddy is remunerative in view of the higher crop value. Given the food security goals, irrigated maize is still a profitable option (Table 3).
· Break-even crop yields indicate the safety margin in irrigated agriculture as average yields are almost 1.5 times higher than the break-even yields. Even with price or yield fluctuations farmers are able to manage that level of crop production.
TABLE 1 Cost of irrigation under gravity irrigation types (diversion schemes) in Tanzania
|
Costs |
Traditional gravity |
Improved gravity |
|
Capital cost ($) |
4145 |
16582 |
|
Average coverage (ha) |
51 |
65 |
|
Life period (yrs) |
10 |
15 |
|
Irrigation cost ($/ha): |
|
|
|
a. annual capital cost ($/ha) |
16.28 |
43.67 |
|
b. maintenance cost ($/ha) (3% of capital cost) |
0.50 |
1.30 |
|
c. labour cost ($/ha): wet season | ||
|
1. maize |
9.10 |
8.18 |
|
2. beans |
10.00 |
10.00 |
|
3. paddy |
20.90 |
24.54 |
|
d. Total irrigation cost ($/ha) | ||
|
1. maize |
25.88 |
53.15 |
|
2. beans |
26.78 |
54.97 |
|
3. paddy |
37.68 |
69.51 |
TABLE 2 Cost of irrigation under different pumping technologies in Tanzania
|
Items |
Manual power Treadle pump |
Mechanical power |
||
|
Diesel |
Electric |
|||
|
Capital cost ($) |
100 |
1025 |
736 |
|
|
Average coverage (ha) |
0.4 |
2 |
2 |
|
|
Life period (Yrs) |
5 |
10 |
10 |
|
|
Irrigation cost ($/ha): |
|
|
|
|
|
a. annual capital cost ($/ha): |
49.11 |
212.17 |
152.35 |
|
|
b. maintenance cost |
5 |
21 |
15 |
|
|
|
(10% of capital cost) |
|
|
|
|
c. labour cost ($/ha): |
||||
|
|
1. maize |
72.18 |
22.7 |
22.7 |
|
2. beans |
88.18 |
22.82 |
22.82 |
|
|
3. paddy |
173.18 |
246.45 |
244.54 |
|
|
d. energy cost ($/ha): |
||||
|
|
1. maize |
- |
50.18 |
39.27 |
|
2. beans |
- |
50.18 |
39.27 |
|
|
3. paddy |
- |
156.36 |
92.82 |
|
|
e. Total irrigation cost ($/ha/year): |
||||
|
|
1. maize |
126.29 |
306.07 |
190.07 |
|
2. beans |
268.58 |
306.07 |
229.44 |
|
|
3. paddy |
227.29 |
435.98 |
304.71 |
|
TABLE 3 Economics of crop production in Tanzania
|
Crap |
Total cost (US $) |
Yield (kg/ha) |
Price (US$/ha) |
Total revenue (US$/ha) |
Break-even yield (Kg/ha) |
Gross margin <US$/ha) |
Gross margin/plot (US$) |
|
Maize (rainfed) |
109.2 |
1100 |
0.15 |
165 |
728 |
55.8 |
1395 |
|
Maize (irrigated) |
177.8 |
2550 |
0.15 |
382.5 |
1185 |
204.7 |
51.2 |
|
Beans (rainfed) |
140.5 |
400 |
0.64 |
256 |
220 |
115.5 |
28.9 |
|
Beans (irrigated) |
214.3 |
980 |
0.64 |
627.2 |
335 |
412.9 |
103.2 |
|
Paddy (irrigated) |
286.9 |
3550 |
0.15 |
532.5 |
1912 |
245.6 |
61.4 |
TABLE 4 Investment cost of different pumping technologies in Malawi
|
Items |
Human power R & W pump |
Mechanical power Treadle pump |
With sprinkler |
|
|
Diesel |
Electric |
|||
|
Capital cost ($) |
60 |
100 |
1040 |
750 |
|
Average coverage (ha) |
0.25 |
0.4 |
2.0 |
2.0 |
|
Life period (Yrs) |
5 |
5 |
10 |
10 |
|
Irrigation cost ($/year): |
|
|
|
|
|
a. annual capital cost ($) |
32 |
53 |
240 |
173 |
|
b. annual sprinkler cost ($) |
- |
- |
904 |
904 |
Note: Cost of sprinkler system will be $ 1 500 -2000. Life period will be 20 years. Replacement cost of sprinkler heads will be $ 60/ha after 10 years; Replacement cost of sprinkler hoses will be $ 72/ha every 5 years.
Malawi
· In the case of rope and washer pumps, the annual cost per hectare was US$ 32 compared to US$ 53 in the case of the treadle pump. For mechanical equipment, the annual cost per hectare is US$ 240 and US$ 173 with diesel and electric pumps respectively (Table 4).· Since the cost of irrigation was worked out with sprinkler systems, this cost is comparatively higher than the manual systems. Total cost of irrigation per hectare for maize with 100 percent cropping intensity was US$ 254 with rope and washer and US$ 231 with the treadle pump, US$ 1 576 with the diesel pump and US$ 1 393 with the electric pump. The costs were US$ 258, US$ 242, US$ 1651 and US$ 1 448 for beans respectively with the above systems. For cabbage, the costs were US$ 265, US$ 272, US$ 1 659 and US$ 1 454 respectively with the above irrigation sources. Since farmers normally go for two crops (i.e., at least 150 percent crop intensity), the profitability will be higher still (Table 5).
· Gross margin analyses indicate that vegetables are comparatively more profitable than maize. Average gross margin per hectare ranged from US$ 48 for rainfed maize to US$ 1 283 for irrigated maize. For beans, it was US$ 879, onion US$ 2 270 and for cabbage
· Break-even crop yields indicate the safety margin in irrigated agriculture. For vegetables, average yields are almost 2.5 times higher than the break-even yields. Even with price or yield fluctuations farmers can manage that level of crop production.
TABLE 5 Cost of irrigation with varying technologies in Malawi
|
Items |
Human power |
Mechanical power |
|||
|
R & W pump |
Treadle |
Diesel |
Electric |
||
|
1. Fixed cost ($/ha) |
128 |
132 |
240 |
173 |
|
|
With sprinkler |
- |
- |
1144 |
1077 |
|
|
2. Variable cost: |
|
|
|
|
|
|
i. maintenance cost |
13 |
13 |
24 |
17 |
|
|
ii. labour cost ($/ha) |
|
|
|
|
|
|
|
1. maize |
113 |
86 |
22 |
22 |
|
2. beans |
117 |
97 |
25 |
25 |
|
|
3. onions |
154 |
154 |
30 |
30 |
|
|
4. cabbage |
124 |
127 |
27 |
27 |
|
|
iii. energy cost ($/ha) |
|
|
|
|
|
|
|
1. maize |
- |
- |
146 |
104 |
|
2. beans |
- |
- |
218 |
156 |
|
|
3. onion |
- |
- |
350 |
250 |
|
|
4. cabbage |
- |
- |
224 |
160 |
|
|
c. Total irrigation cost (100 % crop intensity) |
($/ha/year) |
|
|
|
|
|
|
1. maize |
254 |
231 |
1576 |
1393 |
|
2. beans |
258 |
242 |
1651 |
1448 |
|
|
3. onion |
295 |
299 |
1788 |
1547 |
|
|
4. cabbage |
265 |
272 |
1659 |
1454 |
|
|
Notes: |
1. Fuel consumption will be about 0.3 lit/HP-hr and lubrication oil cost will be about 10% of the fuel cost. Total hours of pumping per ha. will be about 104 hrs for maize; 156 hrs for beans; 250 hrs for onion; 160 hrs for cabbage. Diesel costs $ 0.56/litre. |
|
|
2. R & W indicates rope and washer pump. |
TABLE 6 Economics of crop production in Malawi
|
Crop |
Total cost (US$) |
Yield (kg/h) |
Price (US$/kg) |
Total revenue (US$/h) |
Break-even yield (kg/ha) |
Gross, margin (US$/ha) |
Gross margin/plot (US$) |
|
Maize (rainfed) |
56.3 |
950 |
0.11 |
104.5 |
512 |
48.2 |
12.1 |
|
Maize (irrigated) |
531.9 |
5500 |
0.33 |
1815 |
1612 |
1283.1 |
320.8 |
|
Beans (irrigated) |
520.7 |
2000 |
0.7 |
1400 |
744 |
879.3 |
219.8 |
|
Onion (irrigated) |
1387.8 |
10450 |
0.35 |
3657.5 |
3965 |
2269.9 |
567.5 |
|
Cabbage |
1178.9 |
17500 |
0.20 |
3500 |
5894 |
2321.1 |
580.3 |
Zambia
· Cost of irrigation per hectare varies with the system used. In the case of traditional surface system the annual (fixed) cost per hectare was US$ 585 compared to US$ 218/ha with the rehabilitation system (Table 7).· Total cost of irrigation (fixed and variable costs) was US$ 613 for maize, US$ 620 for tomato and is US$ 618 for onion with the traditional surface system and US$ 235 for maize, US$ 242 for tomato and US$ 240/ha for onion with the improved system (Table 7).
· For the manually operated treadle pump, the annual cost was US$ 85/ha and is US$ 258 for diesel and US$ 181 for electric powered pumps (Table 8).
· Total cost of irrigation was US$ 156/ha with the treadle pump, US$ 320/ha with the diesel pump and US$ 223 with the electric pump for maize at 100 percent crop intensity. The costs are US$ 182, US$ 323 and US$ 222/ha respectively for tomato with the treadle, diesel and electric pumps respectively at 100% crop intensity. Since farmers normally go for two crops (i.e., at least 150% crop intensity), the profitability will be higher still (Table 8).
· Gross margin analyses indicate that vegetables are comparatively more profitable than maize and paddy. However, paddy is remunerative in view of the higher value of the crop. Given the food security goals, irrigated maize is still profitable (Table 9).
· Break-even crop yields indicate the safety margin in irrigated agriculture. Even with price or yield fluctuations farmers are able to manage that level of crop production (Table 9).
TABLE 7 Cost of irrigation under surface systems in Zambia
|
Costs |
Traditional gravity |
Improved gravity |
|
|
Capital cost ($) |
2080 |
4850 |
|
|
Average coverage (ha) |
160 |
10 |
|
|
Life period (yrs) |
20 |
20 |
|
|
Irrigation cost ($/ha): |
|
|
|
|
a. annual capital cost ($/ha) |
585 |
218 |
|
|
b. maintenance cost ($/ha) |
18 |
7 |
|
|
(3% of capital cost) |
|
|
|
|
c. labour cost ($/ha): |
|
|
|
|
|
1. maize |
10.80 |
10.80 |
|
2. tomato |
17.44 |
17.44 |
|
|
3. onion |
15.20 |
15.20 |
|
|
d. Total irrigation cost ($/ha) |
|
|
|
|
e. (100% crop intensity) |
|
|
|
|
maize |
613.80 |
235.80 |
|
|
tomato |
620.44 |
242.44 |
|
|
onion |
618.20 |
240.20 |
|
Note: For new system completion, cost estimates for Mulumbi system were used where the main system will cost about $ 250/ha and tertiary development about $ 1 050/ha. For rehabilitation, data for Nkandabwe were used for computation where the main system rehabilitation will cost about $ 125/ha and tertiary system repairs will cost about $ 360/ha.
Zimbabwe
· Cost of irrigation per hectare was worked out for various pumping technologies, namely, sprinkler, drip and surface irrigation systems. Further, cost of irrigation with 'collector wells' was also analysed for financial viability.· Data from the Hama Mavhaire irrigation system were used to analyse the cost of irrigation with sprinkler irrigation. Data from the Mushandike irrigation system were used to analyse the irrigation cost with the gravity system. Data from the collector well installed in Zaka were used to analyse the irrigation cost with that system. The cost of drip irrigation was computed taking into account yield differences observed between drip and other irrigation types at the Chiredzi research station. In general, for vegetables, a minimum of 20 percent higher yield was observed with drip compared to sprinkler irrigation. In all cases, data for 1995-96 were used.
· Productive life periods assumed in the analysis were: dam 40 years; scheme canals 20 years; pumping unit 15 years; sprinkler head and pipes 20 years; drag-hose 6 years; collector well 15 years two hand pumps were used in the collector well and life was assumed to be 8 years. Interest rate was 12%. Efficiencies of the systems were as follows: sprinkler 75%; drip 85%; gravity 45% and manual irrigation from collector well 65%. Pump efficiency was 70%. Average cost of electricity was US$ 0.05/kwh or US$ 18/megalitre. Average cost of water from collector wells was about US$ 0.36/m3.
· Total irrigation costs (annual and variable costs, excluding labour and energy costs) was US$ 1 518/ha for the sprinkler system; US$ 1 417/ha for the drip irrigation system; US$1 520/ha with the surface system and US$ 2 494/ha with the collector well system (Table 10)
· Total irrigation costs (including labour and energy costs) was US$ 1 654/ha with sprinkler irrigation; US$ 1 553/ha with drip system; US$1 600/ha under gravity system and US$2 752/ha with collector well. Even though farmers use sprinkler and drip systems with 250 to 300 percent crop intensity, a conservative estimate of 200 percent was used in the analysis for all the irrigation types (Table 10).
· Import and export parity prices were used in the gross margin calculations for maize and wheat crops. The export parity price for maize was US$ 0.15/kg and for wheat, the import parity price was US$ 0.27/kg. Total gross margin was US$ 1 840/ha with sprinkler; US$ 2 219/ha with drip system; $1 821/ha with surface system and $2 635/ha with collector well (Table 11).
In the case of 'collector wells' even though the area irrigated was about 0.5 ha, the well also serves as a drinking water source for about 600 people in the rural area who consumed about 13 litres/person/day. Average cost was US$ 0.35/m3. If two boreholes are drilled and two hand pumps installed, the cost would be about US$ 0.42/m3, whereas a single borehole with motorized pump, would cost US$ 0.38/m3. However, the success rate was less than 50 percent in the latter two cases. Hence, the viability of the scheme based on the gross margin from the community gardens could not be judged for the collector well.
· In the case of smallholder schemes, besides financial viability, other benefits such as employment generation, improved nutritional standards and improved market activities associated with forward and backward linkages are also common. These benefits can further justify the rationale for smallholder irrigation investment.
· Break-even crop yields indicate the safety margin in irrigated agriculture. Even with price or yield fluctuations (risks) farmers can manage that level of crop production.
TABLE 8 Cost of irrigation under different pumping technologies in Zambia
|
Items |
Manual power Treadle pump |
Mechanical power |
||
|
Diesel |
Electric |
|||
|
Capital cost ($) |
160 |
1125 |
786 |
|
|
Average coverage (ha) |
0.4 |
2.0 |
2.0 |
|
|
Life period (yrs) |
5 |
10 |
10 |
|
|
Irrigation cost ($/ha): |
|
|
|
|
|
a. annual capital cost ($/ha) |
85 |
258 |
181 |
|
|
b. maintenance cost |
8.5 |
25.8 |
18.1 |
|
|
|
(10% of capital cost) |
|||
|
c. labour cost ($/ha): |
||||
|
|
1. maize |
62.18 |
19.80 |
19.80 |
|
2. tomato |
88.18 |
17.44 |
17.44 |
|
|
3. onion |
76.12 |
16.20 |
16.20 |
|
|
d. energy cost ($/ha): |
||||
|
|
1. maize |
- |
16.34 |
4 22 |
|
2. tomato |
- |
32.16 |
5.70 |
|
|
3. onion |
- |
32.16 |
5.70 |
|
|
e. Total irrigation cost ($/ha/year): (100 % crop intensity) |
||||
|
|
1. maize |
155.68 |
319.94 |
223.12 |
|
2. tomato |
333.40 |
222.24 |
181.68 |
|
|
3. onion |
169.62 |
332.16 |
221.00 |
|
Note: Capital cost also includes the well drilling based on cheaper drilling technologies which accounts for roughly one-third of the capital cost. Maintenance cost will be about 10% of annual capital cost. Fuel consumption will be about 0.3 lit/HP-hr and lubrication oil cost will be about 10% of the fuel cost. Average cost of diesel will be about $ 0.25 per litre and electricity costs about $ 0.016/kwh. Even though the interest rate varies up to 60%, only 45% is used for computation.
TABLE 9 Economics of crop production in Zambia
|
Crop |
Total cost (U$) |
Yield (kg/ha) |
Price (US$/kg) |
Total revenue (US$/ha) |
Break-even yield (kg/ha) |
Gross margin (US$/ha) |
Gross margin/plot (US$) |
|
Maize (rainfed) |
124.7 |
1750 |
10.12 |
210 |
1039 |
85.3 |
21.3 |
|
Paddy (rainfed) |
146.8 |
760 |
0.30 |
228 |
489 |
81.2 |
57.0 |
|
Cotton (rainfed) |
121.6 |
700 |
0.22 |
154 |
553 |
32.4 |
8.1 |
|
Maize (irrigated) |
172.5 |
5300 |
0.12 |
636 |
1438 |
463.5 |
115.9 |
|
Tomato (irrigated) |
314.6 |
7500 |
0.13 |
975 |
2420 |
660.4 |
165.1 |
|
Onion (irrigated) |
615.5 |
8550 |
0.21 |
1795.5 |
2931 |
1180 |
295 |
|
Cabbage |
509.1 |
9800 |
0.16 |
1568 |
3181 |
1058.9 |
264.7 |
|
rape |
250.8 |
4200 |
0.24 |
1008 |
1045 |
757.2 |
189.3 |
|
Paddy (irrigated) |
328.4 |
4200 |
0.30 |
1260 |
1095 |
931.6 |
232.9 |
TABLE 10 Cost of irrigation under different pumping technologies in Zimbabwe
|
Items |
Sprinkler system |
Drip system |
Gravity system |
Collector well |
|
|
Capital cost ($) |
|||||
|
a. Dam |
940295 |
940295 |
5330526 |
- |
|
|
b. Well |
|
- |
- |
7020 |
|
|
c. Scheme/equipment |
202105 |
303158 |
1582500 |
912 |
|
|
Area covered (ha) |
96 |
115 |
633 |
0.5 |
|
|
Irrigation cost ($/year): |
|||||
|
a. annual capital cost ($/ha/year) |
1175 |
981 |
1010 |
|
|
|
|
1. Dam |
|
|
|
2050 |
|
2. Well |
309 |
338 |
438 |
368 |
|
|
3. Scheme/structure |
|
|
|
|
|
|
b. Maintenance cost ($/ha/year) |
34 |
48 |
72 |
76 |
|
|
c. Energy cost ($/ha) |
62 |
62 |
- |
- |
|
|
d. Labour cost ($/ha) |
7 |
7 |
40 |
129 |
|
|
e. Total irr. Cost ($/ha/year) |
1654 |
1553 |
1600 |
2752 |
|
|
f. Gross margin ($/ha/year) |
1840 |
2219 |
1821 |
2635 |
|
Assumptions: Life periods assumed are: dam 40 years; scheme canals 20 years; pumping unit 15 years; sprinkler head & pipes 20 years and drag-hose 4 years; collector well 1 5 years; two hand pumps used in collector well and life will be 8 years. Interest rate 12%. Efficiency of sprinkler system 75%; drip system 85%; gravity system 45% and manual irrigation from collector well 65%. Pump efficiency 70%. Average cost of electricity $ 0.05/kwh or $ 1 8/megalitre. Average cost of water from collector well will be about $ 0.35/m3.
TABLE 11 Economics of crop production in Zimbabwe
|
Crop |
Total cost; (US$) |
Yield (kg/ha) |
Price (US$/kg) |
Total revenue (US$/ha) |
Break-even yield (kg/ha) |
Gross margin (US$/ha) |
Gross margin/plot (US$) |
|
Maize (sprinkler) |
264.3 |
7400 |
0.15 |
1110 |
1762 |
845.7 |
211.4 |
|
Ground nut (sprinkler) |
258.1 |
2740 |
0.31 |
849.4 |
832 |
591.3 |
147.8 |
|
Sugar bean (sprinkler) |
363.3 |
1940 |
0.7 |
1358 |
518 |
994.7 |
248.7 |
|
Cotton (surface) |
432 |
2100 |
0.61 |
1281 |
635 |
849 |
212.3 |
|
Wheat (surface) |
511.6 |
4000 |
0.27 |
1080 |
1894 |
568.4 |
250.1 |
|
Green maize (surface) |
454.7 |
9600 |
0.15 |
1440 |
3031 |
985.3 |
246.3 |
|
Grain maize (surface) |
363.2 |
8000 |
0.15 |
1200 |
2421 |
836.8 |
209.2 |
|
Tomato |
618.2 |
14500 |
0.15 |
2175 |
4120 |
1556 |
389.2 |
|
Cabbage |
593.2 |
23900 |
0.07 |
1673 |
8474 |
1079.8 |
270 |
