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Curtis Wilde, Jeff Johnson, James Bordovsky Texas Tech University and

The Effects of Relaxing Subsurface Drip Irrigation (SDI) Design Uniformity Standards on Returns on Investment and Net Present Values of the Irrigation System. Curtis Wilde, Jeff Johnson, James Bordovsky Texas Tech University and Texas Agricultural Experiment Station - Lubbock.

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Curtis Wilde, Jeff Johnson, James Bordovsky Texas Tech University and

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  1. The Effects of Relaxing Subsurface Drip Irrigation (SDI) Design Uniformity Standards on Returns on Investment and Net Present Values of the Irrigation System Curtis Wilde, Jeff Johnson, James Bordovsky Texas Tech University and Texas Agricultural Experiment Station - Lubbock Beltwide Cotton Conference New Orleans, Louisiana January 9-12, 2007

  2. Background • Efficient in-season water application • High water use efficiencies • High initial cost to install • Installation design uniformity standards • Not to exceed Flow Variation of 20% (USDA – NCRS)

  3. Objective • Apply NPV and ROI analysis to installation of SDI systems with varying design uniformities • Can design uniformity standards be reduced to decrease the initial cost of the SDI system

  4. Methods and Procedures • Study looks at: • Returns on investment (ROI) and Net Present Value (NPV) for: • Two irrigation levels • 1.0 BI Level (80% of the evapotranspiration demand of the crop) • 0.6 BI Level (60% of the 1.0 BI Level) • Three designs with different uniformities • 5.0% Flow Variation • 16.7% Flow Variation • 37.1% Flow Variation

  5. Methods and Procedures P = annual profits IC = initial cost of the system IC = initial cost of the system ATCF = after tax cash flows for year i TV = terminal value of the system in year n n = number of years considered in the analysis

  6. Methods and Procedures • 7 year simulation analysis • Cumulative Distribution Functions (CDFs) show the probability of a NPV occurring • Allows the system designs to be ordered based on risk

  7. SDI Designs 1.0FV5.0 Design layout 0.6FV5.0 Design layout 1.0FV16.7 & 1.0FV37.1 Design layout 0.6FV16.7 & 0.6FV37.1 Design layout

  8. ROI Results for 1.0BI Level

  9. ROI Results for 0.6BI Level

  10. NPV Results for 1.0 BI Level

  11. NPV Results for 0.6BI Level

  12. CDF Results for 1.0BI Level

  13. CDF Results for 0.6BI Level

  14. CDF Results (cont.) • Cost share programs (EQIP) increase NPVs

  15. CDF Results for 1.0BI Level w/ EQIP

  16. CDF Results for 1.0BI Level w/ EQIP

  17. Conclusions • SDI design uniformity standards could be relaxed under certain conditions to reduce the initial cost of installation • When a lower irrigation level is used system uniformity can be decreased without an detriment to NPV • At lower irrigation levels ROI and NPV could be greater for lower design uniformities

  18. The Effects of Relaxing Subsurface Drip Irrigation (SDI) Design Uniformity Standards on Returns on Investment and Net Present Values of the Irrigation System

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