Economic Impact and Decomposition Analysis of Income Change vis-à-vis Drip and Conventional Irrigation Technology in Bananas: A Case Study of the South Gujarat Region in India

Abstract

The alarming water scarcity in Gujarat state justifies the adoption of water-efficient technologies like drip irrigation. Effective transfer and implementation of banana cultivation practices with improved irrigation system as a water-saving device is important as banana is a water-intensive crop. The study aims to assess the economic impact of drip irrigation as well as break down the income difference between drip and conventional irrigation technologies in banana cultivation. Primary data were collected from 120 banana growers each practicing drip and conventional methods of irrigation. The results of economic analysis revealed that the average total cost (₹2.94(10)∧5/ha) under the drip method was found to be less than the total cost under the conventional irrigation method (₹3.28(10)∧5/h a) despite higher initial capital investment on the drip system. The benefit-cost ratio was higher on drip-irrigated farms (1∶2.60) as compared to nondrip farms (1∶1.91). The output decomposition model revealed that adopters of drip irrigation technology produced 17.26% higher income, implying the income of banana growers practicing drip irrigation would be higher even if they used the same mean level of inputs as farmers practicing conventional methods of irrigation. Moreover, drip irrigation technology alone contributed 24.02% increase in income, while the overall contribution of change in input levels was found to be negative to the tune of −6.76%. This calls for intensive extension efforts through appropriate institutional support systems for rapid upscaling of the technology. This paper aimed at working out the cost and returns involved in the production of bananas under drip and conventional irrigation methods. The study revealed that drip irrigation technology, apart from saving water and enhancing water use efficiency, was found to be an essential tool in achieving the goal of doubling farmers’ income in South Gujarat. Moreover, drip irrigation technology significantly reduced the cost of cultivation and resulted in higher yields, thereby assuring remunerative returns to the farmers in the region. Considering the rapid decline in irrigation water availability and low water use efficiency of conventional irrigation methods, awareness needs to be created about the benefits of investment in drip irrigation as one of the most economically viable, resource efficient, and environmentally adaptable methods of irrigation.