Economic risk analysis of precision cotton irrigation scheduling method under conservation tillage

There is a gap in economic understanding regarding post-adoption changes in profitability and income risks, resulting in the limited adoption of precision irrigation scheduling methods. This study investigated the profitability and the associated risks with the adoption of precision irrigation scheduling methods for cotton (Gossypium hirsutum) production under conservation tillage. Two irrigation scheduling methods were compared with a dryland control (Control): a calendar-based checkbook method (Checkbook) and a precision irrigation method using the Smart Irrigation Cotton App (Cotton App) in Camilia, GA. The net return distributions were subsequently ranked using stochastic efficiency with respect to a function to examine the risk preferences of the irrigation methods among cotton growers. The findings revealed significant water saving, ranging from 24% to 77%, when the Cotton App was used instead of the Checkbook. Risk analysis indicated that the Cotton App was preferred over the Checkbook across all levels of producer risk aversion. The utility-weighted risk premiums for the Cotton App ranged from −$18 to $42 ha⁻¹ when compared to the Control and from $284 to $305 ha⁻¹ when compared to the Checkbook. The positive risk premium value of the Cotton App over the Checkbook suggests that adopting precision irrigation scheduling strategies, such as the Cotton App, could enhance profitability for cotton growers. The findings from the risk analysis provide valuable guidance to risk-averse cotton growers, enabling them to make well-informed decisions regarding the adoption of innovative methods and effectively mitigate income uncertainties while conserving water and thus promoting sustainable agricultural practices.