Economic analysis of irrigation modernisation connection options for a dairy farm in northern Victoria
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Limited availability of irrigation water has placed pressure on farmers and water authorities to improve the efficiency of their operations. ‗Modernisation‘ of irrigation infrastructure systems is occurring throughout Australia in order to improve system delivery efficiency and reduce water losses.
A case study farm was used to examine the economic impacts of investing in a range of on-farm infrastructure connection options to improve irrigation efficiency. The analysis determined the required incentive payment for each connection option along with the impact from additional pasture/saved water/saved labour for a selected option.
None of the irrigation upgrade options analysed were profitable investments for the case study farm business, without the payment of a substantial incentive. The amount of incentive required to ensure the farmer was no ‗worse off‘ varied markedly between the options analysed. The options with low capital expenditure, but higher water losses, appear the most profitable in all water availability scenarios, particularly under low irrigation water availability.