Cost-Benefit Analysis of Drip Irrigation in Cotton Production in Northwestern China

Abstract

The extremely arid climate of the Tarim Basin in Northwestern China offers ideal production conditions for cotton, making the region one of the nation’s major cotton production bases. However, in the last decades the overuse of water resources for agricultural production led to severe ecological degradation and increasing competition for water among farmers. Still the majority of farmers in the region use flood irrigation to provide water to their crops. Drip irrigation under plastic mulch constitutes a new technology that generally features increased water use efficiency, however at higher production costs. The present study assesses the costs and benefits of applying drip irrigation based on a primary household dataset collected in the region. The results show, that application of drip irrigation is only beneficial in economic terms, if farmers manage to increase their yield levels at the same time. Therefore it is recommended to improve the agricultural extension service, and cover a substantial share of the additional cost for the farmer through providing subsidy for advanced irrigation technology.