Risk-Return Assessment of Irrigation Decisions in Humid Regions

The environment for decision-making at the farmObjectives of Irrigation Managers firm level has always been volatile, but particularly so in recent years. Product prices have seen wide fluctuaAmir et al. provides some insight into the overall ditions, due in part to a reduced emphasis on farm-price lemma faced by the researcher interested in defining support programs and more reliance on world markets. "optimal" irrigation strategies in their statement that, Input prices, especially those that are energy related "every farmer has his own experience and preferences (fertilizers, chemicals, fuels), have also increased in which can hardly be formulated in mathematical terms" an erratic manner in recent years. Changes in the basic (p. 1413). This perspective may be correct, although institutional setting, including farm-price support polsome inroads have been made with utility analysis icy, water supply regulation, environmental controls, (English and Orlob). Amir et al. suggest the developand trade policy have all contributed to variability. As ment of interactive, computer scheduling models ena result, it has become even more important to better abling the user to execute a "decisive role in directing understand the nature of risk and uncertainty-reducing the search (for a strategy) according to his preferprocesses, such as irrigation. ences," which relieves the researcher from specifying There are many sources of variability affecting ira well-defined objective function. A case can be made rigation management. The purpose of this paper is to for this view; however, there are situations where show what these sources are and how to include them specifying the choice criterion can be useful, espein an analysis, and to suggest the implications for choice cially as it relates to making general recommendations of an optimal irrigation strategy within a humid reor formulating water-use policy. Nearly all researchgion, such as the Southeast. We use a time-dynamic ers have chosen this latter approach. soybean-yield simulation model to generate the proMost of the literature visualizes a decision-maker duction estimates and other simulators to generate cost having a single-dimensional objective, such as to maxestimates. Historical weather and price information imize unconstrained yield (Anderson and Maass; provide the data sources which "drive" the simulaAhmed and van Bavel; Dean; DeBoer et al., Fangmeir tors. and Mohammed; Harrington and Heerman; Jackson and Ferguson; Lambert et al.; Morey and Gilley; Stegman et al.) or unconstrained profit (Anderson, Jay et REVIEW OF LITERATURE al.; Boggess et al.; Burt and Stauber; English et al. 1981; Gowon et al.; Hart et al., Lembke and Jones; The irrigation manager is faced with the intricacies Morgan et al.; Van Deman et al.; Windsor and Chow). in the soil-water-atmosphere-plant realm as well as the Others have added various conditions or provisos. Dylla complexity of the socio-political-legal-institutionalet al. attempted to minimize nitrate percolation and economic setting in which production is planned and drought stress subject to a constraint of maximum yield. implemented. This problem setting has been adHall and Buras; Dudley et al.; Hall and Butcher; and dressed by researchers from many disciplines. The folHarris and Mapp suggested maximization of profit, lowing literature review is a comprehensive attempt to subject to a water constraint. Wu and Liang chose to provide the reader with a means for judging the conminimize irrigation cost, and Schoney et al. minitext for the present study. All the irrigation strategy mized water consumption and energy costs, subject to analyses reported in recent professional (not just ecomaximum yield. Other objectives (which usually give nomic) journals were reviewed to determine: (1) what the same end result) are to maximize evapotranspiraspecific objectives were ascribed to the irrigation mantion (ET), while minimizing applications of water, ferager and (2) how the variability issue has been adtilizer, and pesticides (Hammond et al. 1981), or to dressed. These two dimensions were selected because "conserve" water, while avoiding yield loss (Rhoades they are fundamental in providing a perspective on this et al.). Prihar et al. chose to reduce the irrigation-water/ literature. pan-evaporation ratio while Trava et al. recommended