Risk Effects on Optimal Irrigation Strategies and Investment in Irrigation Technology for Cotton Under Climate Change

Adoption of irrigation to reduce cotton yield losses during increasingly frequent drought periods with climate change is a potential risk management strategy for farmers. However, cotton farmers in the mid-south are concerned about whether investment in supplemental irrigation is economically feasible. This study determined whether adopting irrigation is risk efficient by assessing the impacts of climate change on cotton production. The Decision Support System for Agrotechnology Transfer crop simulation model was adapted and validated for different water holding capacity (WHC) soils and used to simulate cotton yield under various irrigation strategies and climate change scenarios for 2020-2050. Using the simulated yield data, Antle’s econometric approach was employed to estimate optimal irrigation timing and rate strategies while considering the variance and skewness of net returns. Estimated net return responses were used to determine certainty equivalents and net present values of irrigation investment. Crop model calibration and validation results showed that simulated yield matched well with observed yield. The profit-maximizing strategy on high WHC soils under climate scenario RCP 4.5 was to delay initiation of irrigation until mid-bloom stage of cotton growth, which is consistent with a previous study using field experiment data. Preliminary results also indicated that expected profit and variance of profit increased with delaying initiation of irrigation from first square to the mid-bloom stage on high WHC soils. The paper and presentation will further explore the impacts of climate change on cotton profit, risk, and investment in irrigation technology for different WHC soils.