This study looks at the economic feasibility of Alternate Wet Drying (AWD) irrigation methods to address concerns of groundwater depletion and greenhouse gas (methane) emissions associated with rice production. AWD is an irrigation régime where the producer allows the rice field to dry intermittently during the rice life-cycle rather than having the field continuously submerged. In previous studies AWD has been found to reduce water usage by from 20-70% and to reduce methane emissions by over 50% as compared to rice produced under continuous flooding. However; the large disadvantage of AWD is that it is often times associated with a yield loss. Thus, this study sets out to estimate the economic viability of three types of AWD irrigation methods in Arkansas using test plot data. Data includes water usage, methane emissions and yields for three hybrid rice varieties across three years and three AWD methods. The goals of this study are to (1) estimate if any of the AWD methods demonstrate higher profitability than traditional flooding (2) introduce a carbon offset market to capture benefits of the GHG reduction, via methane, and estimate profitability between AWD and traditional flooding (3) introduce a water tax equivalent to the social cost of water and reestimate profitability of AWD and traditional flooding. These results will give producers as well as large rice buyers (MARS and Kelloggs) an idea of relative profitability and additional premiums necessary to switch to/source a more “sustainable” rice crop.


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