The economics of subsurface drip irrigation on perennial pastures and fodder production in Australia

Abstract Dairying in the southern Murray–Darling Basin accounts for about 25% of Australia's annual milk production, and relies on irrigation for pasture production. Border-check irrigation is the predominant method of irrigation used in the region, however subsurface drip irrigation (SDI) could be an alternative. We present an economic evaluation of converting from border-check to subsurface drip irrigation for grazed perennial pasture, and a comparison of border-check and subsurface drip irrigation for fodder lucerne (alfalfa, Medicago sativa ) production. Costs and potential savings/benefits associated with these systems are identified, and a 10-year, discounted net cash flow analysis performed for each scenario. Our results indicate that it is only in situations where a substantial increase in pasture consumption is achieved (2.8 t DM/ha/yr), valued at $300/t DM, with concurrent water savings of 2.0 ML/ha/yr, valued at $250/ML, each year for 10 years, that it is predicted that the internal rate of return is large enough to justify the SDI system investment for grazed perennial pastures. The sensitivity of the investment to various combinations of additional lucerne conservation (for hay and silage) and water savings indicate that installation of SDI for a lucerne hay/silage production system could be a profitable investment if combinations equivalent to 3 t DM/ha/yr of lucerne, valued at $400/t DM, coupled with 30% water savings, valued at $150/ML, each year for 10 years, could be achieved. The capital cost associated with installing such a system limits the feasibility of adopting this technology at the present time. Further research is required to quantify potential perennial pasture and lucerne dry matter production gains and water savings associated with this technology.