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Drainage water management impact on farm profitability

Author

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  • Nistor, Adela P.
  • Lowenberg-DeBoer, James
Abstract
The representative farm planning model that is used for the 2005 Purdue University Top Farmer Crop Workshop base case was extended to include managed drainage activities in order to evaluate the impact of drainage management time on farm operations. The analysis considered two alternative enterprises: rotation corn - soybeans with and without controlled drainage activities. The baseline solution assumed that controlled drainage has 10% higher average yields than free flowing drainage, one drainage control structure is needed each 20 acres, and all drainage management work was done on good field days. The results suggest that the baseline optimal solution was rotation corn-soybeans with controlled drainage where 1,500 acres were cultivated with corn following soybeans and 1,500 acres with soybeans following corn. Compared to the enterprise without controlled drainage, the annual returns to resources were 10% and 7.9% higher with and without EQIP subsidy respectively. Time opportunity cost for the managed drainage activities in each time period in the baseline solution was zero except for Dec. 6 - Apr. 21 period when its value was 10 dollars/hour and 108.69 hours of labor were hired. This was because of the controlled drainage activities (both installation and boards removal occur in this time period) that completely utilize full-time field labor and require additional hours of part-time labor to be hired. When hiring part-time labor was not available, the optimal enterprise was rotation corn-soybeans with managed drainage on 2/3 of the farm and corn-soybeans without controlled drainage on 1/3 of the farmland for a total annual contribution margin of 675,505 dollars. Increasing labor available by one more hour would increase the profits by 281.30 dollars (Dec 6 - Apr. 21), 28.06 dollars (Apr 22 - Apr 25), 338.18 dollars (Apr. 26 - May 2), 229.48 dollars (May 3 - May 9), 9 dollars (May 10 - May 16), 28.07 dollars (Nov. 1 - Nov 14 and Nov 15-Dec 5). In the baseline scenario the yield advantage threshold for profitability of managed drainage was 2.3% and 4.5% with and without EQIP subsidy respectively.

Suggested Citation

  • Nistor, Adela P. & Lowenberg-DeBoer, James, 2006. "Drainage water management impact on farm profitability," 2006 Annual meeting, July 23-26, Long Beach, CA 21389, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21389
    DOI: 10.22004/ag.econ.21389
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    Cited by:

    1. Matekole, Augustus N. & Westra, John V., 2009. "Economic Analysis of Tillage and Nutrient Best Management Practices in the Ouachita River Basin, Louisiana," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49519, Agricultural and Applied Economics Association.
    2. Griffin, Terry W. & Mark, Tyler B. & Dobbins, Craig L. & Lowenberg-DeBoer, James M., 2014. "Estimating whole farm costs of conducting on-farm research on midwestern US corn and soybean farms: A linear programming approach," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 4(1), October.

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    Keywords

    Farm Management;

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