Article

Economic and Resource Journal of Land and Rural Studies

6(1) 15–33
Impacts of Drip Method  2017 Centre for Rural
Studies, LBSNAA

of Irrigation on Okra SAGE Publications

sagepub.in/home.nav
DOI: 10.1177/2321024917731840
Cultivation: An Analysis of http://lrs.sagepub.com

Field Survey Data

A. Narayanamoorthy1
N. Devika2

Abstract
Drip method of irrigation (DMI) introduced relatively recently in India has proved
to save sizeable water and augment productivity of crops. Studies conducted
mostly on high-value fruit crops have confirmed the various benefits of DMI.
However, not many studies have brought out the economic and resource impacts
of drip irrigation including its benefit–cost pattern using survey data in crops like
okra (ladies’ fingers) which is an important vegetable crop in India. In this article,
we have made an attempt to fill this gap by using farm survey data collected from
a water scarce district of Tamil Nadu state. We found from this study that DMI
can reduce about 15 per cent of cultivation cost, save about 47 per cent of water
resources and electrical energy, and augment about 49 per cent of productivity
of okra over the same crop cultivated under conventional flood method of
irrigation (FMI). Farmers cultivating okra under DMI are also able to generate
an additional farm business income of `72,711/acre over the non-drip adopters.
The net present worth and benefit-cost ratio estimated using different discount
rates corroborate that investment in drip irrigation is economically highly viable
for okra crop cultivating farmers.

Keywords
BCR, crop productivity, drip irrigation, Indian agriculture, NPW, water and
energy saving

1
Department of Economics and Rural Development, Alagappa University, Karaikudi, Tamil Nadu,
India.
2
Research Scholar.

Corresponding author:
A. Narayanamoorthy, Department of Economics and Rural Development, Alagappa University,
Karaikudi 630003, Tamil Nadu, India.
E-mails: na_narayana@hotmail.com; narayana64@gmail.com
16 Journal of Land and Rural Studies 6(1)

Introduction
The major objective of this article is to study the economic and resource impacts
of drip method of irrigation (DMI) on okra crop (popularly known as ladies’
fingers in English-speaking countries). Studies have provided strong evidences of
benefits of using DMI in cultivation of high-value crops such as grapes, banana,
sugarcane, cotton, etc. (see Dhawan, 2002; Narayanamoorthy, 1997, 2005).
However, not many studies have intensely analysed the economic and resource
impacts of DMI on okra, which is an important vegetable crop in India. In this
article, therefore, an attempt has been made to study this issue by using survey data
collected from farmers cultivating okra crop with DMI in a relatively water scarce
district in Tamil Nadu state.
Okra is one of the most widely cultivated vegetable crops mainly by
smallholding farmers all over the country. Though it is mostly cultivated under
irrigated condition, the inadequate supply of water at the critical stages of the
plant growth often affects the productivity of okra in India (see GOI, 2004; Rekha
& Mahavishnan, 2008). To be more precise, since most vegetable crops are
sensitive to water stress, adequate water supply for such crops is very essential
(Chauhan, Yadav & Singh, 2013; INCID, 1994; NCPA, 1990). Research suggests
that water stress in crops will have different kind of impacts on the yield. The
moisture stress will affect the germination of seed, growth of plant, peg formation
and seed fillings, all of which ultimately result in poor-quality yield (Rekha &
Mahavishnan, 2008). Moreover, since most vegetable crops are having shallow
root, even two or three days of water stress can affect the yield significantly
(Chauhan et al., 2013; www.ncpahindia.com). Therefore, adequate irrigation is of
paramount importance to increase the size and weight of individual guard and to
have increased productivity of crop. But, owing to increased water scarcity (see
Amarasinghe & Smakhtin, 2014; CWC, 2010; MOWR, 1999; Narayanamoorthy
& Ali, 2015, 2016; Seckler, Amarasinghe, Molden, Silva & Barker, 1998; Seckler,
Barker & Amarasinghe, 1999), farmers come across extreme challenges to
supply water at a regular interval and at required quantity for crops under the
conventional FMI. This creates hardships to the vegetable growers, who are
mostly smallholders in India.
DMI helps to completely ease the problem of water stress for crops even
under severe water scarcity condition.2 Using pipe network and emitters, water
is delivered very close to the root zone of the crops under DMI. This method is
entirely different from the conventional method, where water is supplied to the
whole crop land, instead of providing exclusively to the crop at the root zone. As
far as conventional system of irrigation is concerned excess supply of water at
times proves to be a deterrent to yield of many of the vegetables (Chauhan et al.,
2013; INCID, 1994). By supplying water at the required time and quantity using
pipe network, DMI promises to check the excess supply of irrigation water and

2
An elaborate presentation on various benefits of adopting DMI in crop cultivation can be seen from
GOI (2004), Narayanamoorthy (2005) and MOWR (2006).
Narayanamoorthy and Devika 17

put an end to the water losses occurring through conveyance and distribution.
The experimental data-based studies carried out in different locations show that
the okra crop cultivated under DMI increases the productivity by about 20–30
per cent and saves water by about 40–60 per cent over the method of FMI
(see Biswas, 2010; INCID, 1994; Rajaraman & Pugalendhi, 2013; Rekha &
Mahavishnan, 2008; Sharma & Kaushal, 2015). DMI also has the potential of
enhancing the productivity of crops that too with a reduced cost of cultivation
(Dhawan, 2002; Namara, Upadhyay & Nagar, 2005; Narayanamoorthy, 1996,
1997, 2004a, 2005; Postal, Polak, Gonzales & Keller, 2001; Shah & Keller,
2014; Shreshta & Gopalakrishnan, 1993). Because of increased benefits and
well-supported state sponsored subsidy schemes for DMI, the area under DMI
has expanded noticeably from mere 70,590 hectares in 1991–1992 to 0.197
million hectares in 2009–2010 and further to 3.37 million hectares in 2015–
2016 (FICCI, 2013, 2016).3
Since DMI requires fixed capital investment, this formed the basis of several
studies that tried to find out the impact of DMI on different parameters of
crop cultivation including its economic viability in different crops, using both
experimental and field level data (see AFC, 1998; Dhawan, 2002; INCID, 1994;
Namara et al., 2005; Narayanamoorthy, 1997, 2003, 2004a, 2005). A variety of
studies carried out using field survey data on high-value crops such as banana,
grapes and sugarcane have showed that it can save water by about 30–40 per cent,
increase productivity by about 30–45 per cent and also lower the cost of cultivation
considerably as compared to the same crops cultivated under FMI with similar
environment. With the help of discounted cash flow technique, a few studies have
also demonstrated that the investment in drip irrigation is economically viable for
farmers even without subsidy (see Narayanamoorthy, 1997, 2004a, 2004b).
Though studies are available on the impact of DMI on many crops, credible
studies on okra crop cultivation using farm survey data are seldom available in
India.4 Due to inherent problems associated with the surface method of irrigation
and increased water scarcity, farmers are unable to supply water at the required
time and interval for okra and other similar crops that eventually increases moisture
stress for crops. Many a time, despite of using required yield-increasing inputs,
farmers are unable to harvest the expected yield from okra crop due to moisture
stress and irregular water supply. Certain experimental data-based studies that
were cited earlier in the article provide evidence of DMI increasing crop and
water productivity. But, the results generated from experimental data cannot be

3
Since late 1990s, significant progress has been made in adopting micro-irrigation in India. India’s
total area under micro-irrigation (includes drip and sprinkler irrigation) was 7.73 million hectares as
on 2015–2016. Of this, drip-irrigated area accounted for about 44 per cent (to know more details on
the development of micro-irrigation in different states and regions in India, see FICCI, 2016).
4
Vegetable crops are commonly cultivated under FMI in the country. Most vegetable crops can also
be cultivated under DMI (INCID, 1994). But, not many detailed analytical study on the economic and
resource impacts of DMI on vegetable crops are available in the literature. In fact, to the best of our
knowledge, no detailed study has been published on the economics of okra cultivation under DMI,
especially in India’s premier journals.
18 Journal of Land and Rural Studies 6(1)

completely relied upon for policy decisions as they vary considerably from the
field-level results. Furthermore, the exiting studies have not attempted to study
whether or not the investment on DMI is economically viable for short-duration
vegetable crops like okra. Therefore, one must find out answer to questions such
as what drives the farmers to cultivate okra crop under DMI? What is the impact
of it on water saving and productivity of okra? How much additional income
can be generated by adopting DMI in okra crop cultivation? Is the investment on
drip irrigation economically viable for okra cultivating farmers without subsidy?
Since studies focusing on these issues using farm survey data are not available,
an attempt is made in this study to fill this gap using data collected from farmers
cultivating okra crop in water scarce Sivagangai district in Tamil Nadu state with
the following objectives:

1. To determine the operation-wise cost saving due to DMI in okra crop

cultivation.
2. To estimate the water and electricity saving due to DMI in okra crop
cultivation.
3. To study the impact of DMI on the productivity of okra crop.
4. To study the relative income of drip- and non-drip-irrigated okra crop.
5. To estimate the economic viability of drip investment in okra crop
cultivation with and without capital subsidy under different discount rates.

Empirical Settings
The study has been carried out in Sivagangai district of Tamil Nadu state using the
data collected from the sample farmers who have cultivated okra crop with drip and
FMI. Sivagangai district is located in the southern-eastern part of Tamil Nadu state
and has been selected purposively for the study because it is known for water
scarcity. With very little coverage of canal irrigation, the district’s agriculture has
been predominantly relying on tank irrigation which is also not assured due to
erratic monsoon rainfall (see GOTN, 2014). In order to combat the water scarcity
problems, farmers have resorted to using DMI in crops like sugarcane, banana,
chilli, brinjal, ladies finger, groundnut, etc., in the district especially in the recent
years. Okra crop has been cultivated in different parts of the district, but its cultivation
is relatively higher in Kaliyarkovil block of the district because of its soil suitability.
Using groundwater, farmers have traditionally been cultivating okra crop in this
block under the conventional FMI. But, in the recent years, due to over-exploitation
of groundwater, farmers are unable to cultivate the okra crop under FMI. As DMI
helps the farmers to cultivate crops even under severe water scarcity, farmers have
started adopting it for cultivating okra in this region. Kalaiyarkovil block has been
selected for conducting detailed study as the adoption DMI in okra cultivation is
found to be relatively high in this block in Sivagangai district.
In this study, we compare water use, cost of cultivation, productivity and
profitability of okra crop cultivated under drip- and non-drip-irrigated conditions.
Therefore, a total of 60 farmers consisting of 30 adopters and 30 non-adopters of
Narayanamoorthy and Devika 19

DMI have been selected from the selected block. Here, the non-adopters of DMI
refer to those farmers who cultivate okra under FMI. As the adoption of DMI is
found only among the farmers who own irrigation wells (groundwater), farmers
who cultivate okra using groundwater source of irrigation under both drip- and
flood-irrigated condition have been selected for this study. While the adopters
have been selected using random sampling procedure with the help of adopters’
list provided by the Agricultural Officer of the block, purposive sampling method
has been followed to select the non-drip irrigated farmers who cultivate the same
crop nearest to the field of drip adopters, but not very close to the plot where FMI
is used for okra cultivation. This is done specifically to avoid leaching effect from
the flooded plots to the nearby plots. Relevant data on the economic and resource
parameters have been collected from this selected sample of 60 farmers pertaining
to the year 2015–2016.
A major objective of the article is to find out the economic viability of investment
in drip irrigation in okra crop cultivation. To study this, net present worth (NPW)
and benefit–cost ratio (BCR) are estimated using discounted cash flow technique.
The NPW is the difference between the sum of the present value of benefits and
that of costs for a given life period of the drip set. It pools together the total benefits
with the total costs taking into account items such as cost of capital and depreciation
costs of the drip set. As per the NPW criterion, the investment on drip set can be
treated as economically viable if the present value of benefits is greater than the
present value of costs. The BCR is closely related to NPW as it is obtained just by
dividing the present worth of the benefit stream with that of the cost stream. If the
BCR is more than one, then the investment on any project can be considered as
economically viable. Apparently, a BCR greater than one implies that the NPW of
the benefit stream is higher than that of the cost stream (for details, see Gittinger,
1984). The NPW and BCR can be mathematically defined as follows:

t=n
Bt − Ct
NPW = ∑ (1)
(1+ i )t
t=1

t=n
Bt
∑ (1+ i) t
t=1
BCR = t=n (2)
C
∑ (1+ti)t
t=1

where Bt = benefit in year t; Ct = cost in year t; t = 1, 2, 3, … n; n = project life in

years; i = rate of interest or the assumed opportunity cost of the investment.
As underlined earlier, fixed capital is required for adopting drip irrigation in any
crop and thus, it is necessary to take into account the income and cost stream for the
whole life span of drip investment. But, it is difficult to collect the actual cash flows
for the entire life span of drip investment because of the absence of observed temporal
information on benefits and costs. Therefore, the following realistic assumptions are
used to estimate the cash inflows and cash outflows for drip investment:
20 Journal of Land and Rural Studies 6(1)

1. The life period of the drip-set is primarily assumed to be five years as

followed by the INCID (1994) study and on that basis NPW and BCRs are
worked out. Alternatively, NPW and BCR are also worked out by assuming
life period as 10 years based on the experience gathered from the adopters
of drip irrigation.
2. The cost of cultivation incurred and income generated through okra
cultivation using DMI is assumed to be constant during the entire life
period of drip-set.
3. Three different rates of discount (interest rates) are considered in order to
understand the sensitivity of investment to the change in capital cost. They
are assumed at 10, 15 and 24 per cent5 as alternatives representing different
opportunity costs of capital.
4. The technology used for cultivating okra crop is assumed to remain
constant during the entire life period of drip-set.

Okra Cultivation in India: An Overview

Since the focal point of the study is on okra crop farming, it would be useful to
understand the overall state of cultivation of this crop in India before getting into
the analysis of the filed-level data. Okra is one of the important and popular
vegetable crops in India, which is also cultivated in most tropical and sub-tropical
countries. Adaptability to a wide range of soil and hot conditions, suitability for
round the year cultivation, continues demand from all groups of consumers have
made okra as an important vegetable crop in India. The roots and stems of okra
are used for cleaning the cane juice from which gur or jaggery is prepared
(TOI, 2013). Though it is not grown in Europe and North America, consumers
from these countries have started liking this vegetable because of its nutrient
content; it contains dietary fibre, folate, pyridoxine, thiamine, vitamin C, A and K,
folic acid, copper, calcium, potassium, iron, magnesium, manganese, zinc and
phosphorus. Okra also helps to earn foreign exchanges as it accounts for 65
per cent of the export of fresh vegetables in India (Vanitha et al., 2013; Venkanna,
Balikai & Patil, 2015).
The world’s total area under okra was about 1.10 million hectares in the year
2013–2014 from which about 8.70 million tonnes of production was harvested.
Okra crop is cultivated mainly in India, Nigeria, Sudan, Pakistan, Ghana, Egypt,
Benin, Saudi Arabia, Mexico and Cameroon. India has the largest area under
okra accounting for about 48 per cent of world’s area followed by Nigeria that

5
The rate of interest for farm loans from institutional sources mostly varies from 10 to 15 per cent
per annum. But sometime farmers tend to take loan from local moneylenders for farming
operations, where the minimum rate of interest is 24 per cent per annum. Although none of the
sample farmers in this study have used private finance for installing drip system, we have attempted
to find out whether or not the investment is viable to okra-cultivating farmers, if 24 per cent is used
as discount rate.
Narayanamoorthy and Devika 21

Table 1: Trends in Area, Production and Yield in Okra in India, 1970–1971 to

2014–2015
Production
Area (’000 ha) (’000 tonnes) Yield (tonnes/ha)
Year World India TN World India TN World India TN
1970–1971 420 220 NA 1600 1150 NA 3.90 5.22 NA
1980–1981 560 300 2.91 2510 1700 30.98 4.50 5.76 10.64
1990–1991 780 370 3.15 3590 2280 33.05 4.60 6.16 10.50
2000–2001 880 350 6.07 5230 3350 41.09 6.00 9.57 6.77
2010–2011 1050 500 5.70 7100 5780 46.80 6.70 11.60 8.21
2011–2012 1060 520 Na 7830 6260 NA 7.40 12.08 NA
2012–2013 1780 530 8.27 9500 6350 75.98 5.34 11.98 9.19
2013–2014 1100 530 8.77 8690 6350 83.59 7.90 11.91 9.53
2014–2015 NA 500 9.21 NA 5710 91.91 NA 11.32 9.98
Source: Compiled from NHB (2015) and GOI (2015, 2016).
Notes: ha—hectares; NA—not available; TN—Tamil Nadu state.

accounted for 34 per cent during 2013–2014 (NHB, 2015). In production too,
India ranks first in the world with about 6.35 million tonnes (73 per cent of
world’s total production).
There has been a significant increase in the area under okra over the years in
India, which increased from 0.22 million hectares in 1970–1971 to about 0.50
million hectares in 2014–2015, an increase of about 127 per cent (see Table 1). Along
with the area, the production and productivity of the crop has also increased over
the years due to continuous demand for okra from its consumers. At the state level,
although okra has been cultivated in most state in India, it has been cultivated
predominantly in states like West Bengal, Bihar, Gujarat, Andhra Pradesh and
Odisha. Tamil Nadu state occupied 14th position in India’s total okra production
during 2013–2014.
As reported earlier, although okra is an important vegetable crop cultivated
almost in all parts of India, sample survey-based field studies focusing on its
cultivation under DMI are seldom available. However, a few experimental data-
based studies did show that DMI helps to save water, increase productivity and
profitability of okra crop as compared to the same crop cultivated under FMI
(INCID, 1994). With this background, we now analyse the economic and resource
impacts of DMI on okra crop cultivation utilising the farm survey data.

Analysis of Survey Data

As mentioned earlier, quite a few field data-based studies on different crops
cultivated under DMI are available in India, but not on okra crop cultivation that
too using properly designed methodology. Since okra is one of the vegetable
22 Journal of Land and Rural Studies 6(1)

Table 2: Socio-economic Characteristics of the Sample Farmers

Average Value
Characteristics Unit FMI DMI
Age of farmer (agriculture head) Years 50.14 46.40
Education of farmer Years 4.52 8.67
Farming experience of farmer Years 35.34 27.10
Landholding size Acres 3.66 6.98
Net cropped area Acres 3.66 6.98
Gross cropped area Acres 5.55 12.52
Net irrigated area Acres 3.66 6.98
Gross irrigated area Acres 5.55 12.52
Land use intensity % 100.00 100.00
Cropping intensity % 151.64 179.37
Source: Computed using survey data.
Notes: FMI—flood method of irrigation; DMI—drip method of irrigation.

crops cultivated for edible purpose with mostly under irrigated condition, it would
be useful to study the impact of DMI on the economic and resource aspects of it.
As mentioned in the methodology section, a total of 60 sample farmers (30 from
drip adopters and 30 from non-drip adopters) have been selected for the study.
Before analysing the various aspects of impact of DMI, let us briefly understand
the basic characteristics of the sample farmers. Data presented in Table 2 depict
that the drip adopters’ condition seems to be better than the non-drip adopters in
almost all the characteristics. The differences between the two categories of
farmers are perceptible especially in land- and irrigation-related parameters. For
instance, the average landholding size of the drip adopters was 6.98 acres, whereas
the same was only 3.66 acres for non-drip adopters. Drip irrigation requires a
fixed capital to install the system in the field and therefore, the large farmers who
are relatively better in terms of resources have adopted this relatively new
irrigation technology. This is expected because most adoption-related studies
have confirmed that early adopters of any new technologies are relatively educated
and resourceful farmers (Azhar, 1991; Lockheed, Dean & Lawrence, 1980;
Schultz, 1964).

Cost of Cultivation
As per the data published by the CACP, the cost of cultivation in most of the crops
has increased substantially particularly after mid-1990s, which has been
highlighted by Narayanamoorthy (2013) and Narayanamoorthy et al. (2015).
Although the costs of most farm inputs have risen, the cost of irrigation water is
arguably the significant one. DMI promises to help in reducing the cost of
cultivation drastically which is not highlighted by many studies. DMI reduces the
Narayanamoorthy and Devika 23

cost of cultivation especially in operations like irrigation, weeding, ploughing and

preparatory works. To study the impact of DMI on various operational costs of
cultivation, we have compared each of the operations of drip-irrigated okra with
flood-irrigated okra crop. The data on operation-wise cost of cultivation presented
in Table 3 show a difference of about 15 per cent in the total cost of cultivation6
between the two methods of irrigation. As confirmed by earlier studies on other
crops, among the various operations, substantial amount of cost saving is noticed
in operations like irrigation7 (83.12 per cent), weeding and interculture (about
69.70 per cent) and preparatory works (about 47.54 per cent). The results are not
at all surprising, rather are along the expected lines. The reduced consumption of
water under DMI helps reducing the cost on irrigation over the method of flood
irrigation. FMI or conventional method of irrigation uses the soil surface to flow
water down the field where water losses occurring through evaporation and
distribution are substantial. The performance of FMI is also highly dependent on
soil properties such as infiltration rate and surface roughness. These problems are

Table 3: Operation-wise Cost of Cultivation of Drip- and Flood-irrigated Okra Crop

(`/acre)
Gain over FMI
Operation DMI FMI Amount Per Cent
1. Preparatory works 3,180.00 6,062.07 2,882.07 47.54
2. Seed and sowing 3,273.67 5,857.24 2,583.57 44.11
3. Fertilisers 2,710.00 5,756.90 3,046.90 52.93
4. Farm yard manures (FYM) 3,360.00 3,089.66 –270.34 –8.75
5. Pesticides 1,238.33 3,587.93 2,349.60 65.49
6. Weeding and interculture 1,964.00 6,481.03 4,517.03 69.70
7. Irrigation 1,470.00 8,710.34 7,240.34 83.12
8. Harvesting 34,500.00 23,586.21 –10,913.79 –46.27
9. Transport and marketing 4,728.38 3,187.93 –1,540.45 –48.32
Total cost (cost A2 + FL) 56,424.33 66,319.31 9,894.98 14.92
Source: Computed using survey data.
Note: The cost of cultivation referred in this article is cost A2 + FL as per CACP definition.

6
The Commission for Agricultural Costs and Prices (CACP) of India has been using nine different cost
concepts for cost calculation. We have used cost A2 + FL for computing profitability, etc., in this
paper. By the definition of CACP, cost A2 + FL includes all actual expenses in cash and kind incurred
in production by the farmer plus rent paid for leased-in land as well as imputed value of family labour.
The definition of other cost concepts can be seen from CACP (2015) or at www.cacp.dacnet.nic.in
7
For irrigating crops, all the sample farmers in both DMI and FMI categories have used only
electrically operated pump sets which require very less operating expenditure. In this study, since
electricity has been supplied free of cost to all farmers in Tamil Nadu over the last almost three
decades, only the human labour cost that are used for managing water supply to crops is considered as
irrigation cost.
24 Journal of Land and Rural Studies 6(1)

completely absent under DMI. A relatively fewer requirements of ploughing and

other preparatory works for cultivating okra under DMI helps reducing the cost on
preparatory works. Since water is supplied only at the root of the crops and not to
the non-crop zone under DMI, weed growth is reduced substantially. As a result
of reduced weed growth, the requirement of labour for weeding and interculture
operation in okra cultivation is eventually reduced. On the whole, the results
clearly show that DMI has the capability of reducing the cost of cultivation in
okra crop over the method of flood irrigation.

Water and Electricity Consumption

DMI is primarily introduced in agriculture to conserve the water resources. As
water is supplied directly to the root zone of the crop under DMI, substantial
amount of water losses occurring due to conveyance, distribution and application
at the field level are reduced. Through experimental-based studies, water
consumption is usually estimated as depth of water applied (in terms of cm or
mm). It is difficult to follow the same method at the farmers’ field because of
changes in the horse power (HP) of the pump set, water level in the well, varying
level of delivery pipes, condition of the water extraction machineries, distance
between place of water source and field to be irrigated, quality of soil, terrain
condition, etc. In view of these difficulties, water consumption is measured in
terms of horse power (HP) hours of irrigation. HP hours of water consumption is
computed by multiplying HP of the pump-set with hours of water used by drip-
and non-drip-irrigated farmers.
Data presented in Table 4 depict that DMI in okra cultivation saves enormous
amount of water. Although the number of irrigation used for drip-irrigated crop
(77 times) is substantially higher than that of flood-irrigated crop (29 times), the
duration of hours used for each turn of irrigation is only about 1.40 hours under
DMI as against the use of 6.40 hours per acre under FMI. As a result, the total water
used for drip-irrigated okra comes to about 561 HP hours/acre, whereas the same
comes to about 1.061 HP hours/acre for non-drip-irrigated okra crop. This means
that farmers using drip irrigation are able to save about 500 HP hours of water per
acre, which is about 47 per cent saving over FMI. Since farmers are able to supply
required quantity of water at the required time exclusively at the root zone of the
crop under DMI, a substantial water saving is achieved. The same area farmers
are unable to accomplish this when okra is cultivated under FMI. Though the
water usage under the FMI is much higher than under the DMI, farmers following
FMI reported that they were not able to supply adequate quantity of water during
the time of crop growth mainly due to water shortage in the well and also due to
reduced supply of electricity. Since DMI requires less hours of water supply for
crop, farmers are able to manage the irrigation schedule even with reduced supply
of electricity, which is not possible under FMI. Therefore, their okra crop had
faced either moisture stress or excess wetting during the crop season, which has
significantly impacted upon the crop growth. In fact, quite a few sample farmers
have reported that frequent interruptions in electricity supply, water scarcity and
Narayanamoorthy and Devika 25

Table 4: Water Use, Electricity Consumption and Productivity of Drip and Flood
Method Irrigated Okra

S. Method of Savings over FMI

No. Particulars Irrigation Average In Value In %
1 Number of irrigation/acre DMI 76.50
–47.47 –163.52
FMI 29.03
2 Hours required per DMI 1.40
irrigation/acre 5.05 78.29
FMI 6.4
3 HP hours of water used/ DMI 561.00
acre 500.45 47.15
FMI 1,061.45
4 Electricity consumption DMI 420.75
(kWh/acre) 375.34 47.15
FMI 796.09
5 Productivity (quintal/acre) DMI 47.58
15.70 49.25
FMI 31.88
6 Water productivity DMI 8.48
(kg/HP hours of water) 5.48 182.39
FMI 3.00
7 Electricity productivity DMI 11.31
(kg/kWh) 7.30 182.39
FMI 4.00
8 Cost of cultivation DMI 56,424.33
(`/quintal) 9,894.98 14.92
FMI 66,319.31
9 Value of output (`/acre) DMI 190,333.33
62,816.09 49.26
FMI 127,517.24
10 Farm business income DMI 133,909.00
(`/acre) 72,711.07 118.81
FMI 61,197.93
Source: Computed using survey data.

non-availability of labour are the three important factors instrumental for adopting
the DMI for okra cultivation.
An important advantage of DMI is that it saves enormous amount of electrical
energy while operating irrigation pump sets. The reduced consumption of water
by drip-irrigated crop obviously curtails the working hours of pump set reducing
the required quantum of electricity. We have estimated the electricity saving in
okra cultivation by assuming that 0.750 kWh of power is used per HP for every
hour of pump set operation which is also followed by some earlier studies (see
Narayanamoorthy, 1997, 2004a; Shah, 1993). According to this estimate, the
consumption of electricity under DMI is only about 421 kWh/acre as against 796
kWh/acre under FMI. This means that the drip adopters are able to save an amount
of 375 kWh of electricity from every acre of okra cultivation over the FMI. In water-
intensive annual crops like sugarcane and banana such a saving in electricity due to
DMI is found to be significantly very high and has proved to be a panacea for the
water-stressed regions of Maharashtra (see Narayanamoorthy, 2009).
26 Journal of Land and Rural Studies 6(1)

Increased Crop Productivity

Apart from saving water and electricity, DMI also helps to increase the productivity
of crops to a considerable extent by reducing their moisture stress, which is also
observed in this study. Table 4 clearly depicts that the productivity of okra
cultivated under DMI (48 quintal/acre) is about 49 per cent higher than that under
FMI, which is only 32 quintal/acre. There arises a question as to what catapulted
the productivity of okra under DMI? Could it be due to higher application of
yield-increasing inputs under DMI? The farmers have outlined the following five
main reasons for increased yield of okra cultivated under DMI. First, the moisture
stress for crop under DMI is reduced because of its ability to supply required
quantity of water at the required time. This resulted in increase in germination of
seed, plan height, more flowers in canopies and size of produce. Second, supply
of water only at the root zone of the crop prevents water flow to other zones and
therefore, weed growth is considerably reduced. Third, the supply of water at
regular intervals also allowed the crop to absorb the fertilisers without any
immense losses through leaching and evaporation. Fourth, size of okra is reported
to be bigger under drip method because of the absence of moisture stress as
compared to FMI. Fifth, the better growth of plant under DMI allows for increased
yield of okra which is not possible under FMI. Given the relatively less use of
yield-increasing inputs (confirmed by operation-wise cost of cultivation) under
drip-irrigated okra as compared to the same with non-drip-irrigated condition, one
can conclude that the productivity gain in okra could be due to the adoption of
DMI. Besides increasing absolute productivity of crops, DMI also helps in
enhancing the water and electricity productivity of the crop considered for the
analysis (see rows six and seven in Table 4), which is essential in view of the
dwindling water resources and scarcity of electricity experienced in the recent
years in India.

Farm Business Income

The analysis so far reveals that DMI indeed promotes water and electricity saving,
and improves okra productivity as well. We now analyse the relative profit levels
of okra cultivated under drip- and flood-irrigated method. It is important to note here
that the total cost of cultivation that is considered for calculating the profitability
of okra crop is calculated taking into consideration only the variable cost, but not
fixed cost components like interest rate and depreciation. The gross income from
okra is calculated by multiplying total yield with the price received from the
market by the farmers. The total cost of cultivation is subtracted from the gross
value of production under DMI and FMI to calculate the profit. The profit per acre
estimated as per this method comes to `133,909 for DMI, but it is only `61,198
for FMI (see Table 5). This means that farmers cultivating okra under the method
of drip irrigation are able to generate an additional profit of about `72,711/acre
over the method of conventional flood irrigation. One may be interested to know as
to how drip farmers could make substantial profit. Is it due to increased productivity
Narayanamoorthy and Devika 27

Table 5: Cost and Income Details of Drip- and Flood-irrigated Okra

(`/acre)
Gain over FMI
Particulars DMI FMI Amount Per cent
1. Gross cost of cultivation 56,424.33 66,319.31 9,894.98 14.92
2. Gross value of production 190,333.33 127,517.24 62,816.09 49.26
3. Profit (farm business income) 133,909.00 61,197.93 72,711.07 118.81
4. Capital cost of DMI (without subsidy) 38,533.33 – – –
5. Subsidy for DMI 10,540.00 – – –
6. Capital cost of DMI (with subsidy) 27,993.33 – – –
Source: Computed using survey data.
Note: Cost of cultivation used in this study refers to cost A2 + FL.

or is due to the effect of price? As mentioned in the methodology section, farmers

selected for this study have cultivated more or less uniform variety of okra.
Therefore, farmers were able to get same price for the okra harvested from drip-
and flood-irrigated fields. This suggests that this higher profit is mainly due to
yield effect under DMI and not because of price effect. This analysis of
un-discounted profit also suggests a very crucial point that the farmers would be
able to repay the entire capital cost of the drip system (which is about `38,533/
acre without subsidy) from the profit of the very first year itself.

Financial Viability of Drip Investment

It is evident from the analysis presented above that the profit (farm business
income) from okra cultivation under DMI is found to be significantly higher than
the same under conventional irrigation method. However, this profit cannot be
treated as the effective (real) profit of okra cultivated under DMI. This is because
of the fact that it does not take into account the capital cost of the drip set, its
depreciation and the interest accrued on using the fixed capital for installing the
drip-set in the field. In order to calculate the net profit, all these parameters should
be taken into account. Importantly, the longevity of drip-set is an important
variable to determine the net present value, which in turn is a determinant of per
hectare profit. DMI is also a capital-intensive technique and therefore, the initial
high investment needed for installing drip systems remains the main impediment
for the widespread adoption of it, especially in crops like okra which is not a long-
duration annual crop. How does the requirement of fixed investment affect the
economic viability of okra cultivation under DMI? To what extent such effect can
be counterbalanced by government subsidy is one of the pressing issues that
requires an empirical answer. There is, therefore, a need to find out the economic
feasibility of drip investment on okra cultivation under different scenarios taking
into account all these issues. To answer these issues, we have computed both the
28 Journal of Land and Rural Studies 6(1)

NPW and the BCR by utilising the discounted cash flow technique, as indicated
earlier in the methodology section.
A major factor that determines the economic viability of the drip irrigation in
any crop is the required capital investment. Therefore, a brief discussion about the
requirement of capital for drip irrigation is useful before getting into the aspects
of economic viability of the system. The capital investment required for DMI
varies depending upon the nature of crop. While narrow spaced crops need higher
fixed investment, wide spaced crops require relatively low fixed investment. This
is because of relatively less requirement of tube length, emitters and drippers.
Most states including Tamil Nadu are providing about 50 per cent of the capital
cost as subsidy either through a state sponsored scheme or centrally sponsored
scheme to encourage the adoption of drip irrigation for different crops since it is a
capital-intensive technology. As is evident from Table 5, the average capital cost
of drip-set for okra crop comes to about `38,533/acre without subsidy, whereas
it is only `27,993/acre after deducting the state subsidy. The actual capital cost
difference between with and without subsidy comes to only `10,540/acre, which is
less than 50 per cent of the capital cost. This is because of the fact that the subsidy
is calculated based on the investment of the drip system which varies from one
manufacturer to another depending upon the quality of materials (emitters, valves,
etc.) including main pipes used for installing the system.
With this understanding, let us now analyse the benefit–cost pattern of drip
investment estimated using discounted cash flow technique. The NPW and the BCR
have been computed separately by including subsidy and by excluding subsidy in
the total fixed capital cost of drip set. Financial viability analysis under different
rates of discount would indicate the efficacy of investment at various levels of the
opportunity cost of investment. Though the BCR is sensitive to discount rate and
the degree of such sensitivity depends on the pattern of cash flows, it is interesting
to observe the sensitivity of the BCR when there is simultaneous change in
both subsidy and discount factor. Keeping this in view, we have attempted to
find out answers specifically to the following four important issues namely (1)
Is the investment on drip system for okra cultivation economically viable to
farmers? (2) Will the farmers be able to meet the investment in drip irrigation to
cultivate okra without subsidy on capital cost? (3) What is the payback period of
drip investment? and (4) What will be the trend in the NPW and BCR when the
assumed life period of the drip system is 5 years and 10 years?
The results of NPW and the BCR estimated using the actual price of okra
received by the farmers are presented in Table 6. Both the NPW and BCR
computed under different scenarios clearly reveal that the drip investment on okra
cultivation is economically viable for farmers. Along the expected lines, the NPW
of the investment with subsidy is marginally higher than that under ‘no subsidy’
option. For instance, the NPW at 10 per cent discount rate computed assuming
five years as life period of the system comes to about `472,590/acre without
subsidy and `482,171/acre with subsidy. This implies that farmers are able to get
a handsome additional benefit due to subsidy support.
Narayanamoorthy and Devika 29

Table 6: NPW and BCR Estimated Using Actual Price Received by the Sample Farmers
for Drip-irrigated Okra Crop
Life Period Discount
Subsidy Category Assumed Rate NPW (`/acre) BCR
With subsidy 5 years 24% 345,056.41 2.94
15% 424,541.71 2.99
10% 482,171.98 3.01
10 years 24% 470,458.48 3.04
15% 647,716.30 3.11
10% 797,364.40 3.14
Without subsidy 5 years 24% 336,556.40 2.81
15% 415,376.49 2.87
10% 472,590.16 2.90
10 years 24% 461,958.40 2.93
15% 638,551.00 3.02
10% 787,782.52 3.06
Source: Estimated using survey data.
Notes: Estimated using discounted cash flow technique for actual price; NPW—net present worth;
BCR—benefit-cost ratio.

With different discount rates, the BCR has also been computed which clearly
suggests that drip investment is financially feasible for okra-cultivating farmers
under the scenario of with and without subsidy. The minimum BCR comes to 2.81
and maximum goes up to 3.06 when one estimates the same without considering
subsidy. This increases further from 2.94 to 3.14 when subsidy is deducted from
the capital cost. The relatively higher BCR realised with subsidy indicates the
important role played by the subsidy in enhancing the economic viability of
drip irrigation in okra cultivation. The minimum BCR estimated comes to 2.81
without subsidy. Interestingly, the drip investment in okra cultivation is turned
out to be very much viable to farmers even with the discount rate of 24 per cent.
All these clearly corroborate the fact that the investment on drip irrigation in okra
cultivation is financially viable even without availing state subsidy.
The NPW and BCR are also sensitive to the life period of the drip system
assumed for calculation. The BCR is expected to be relatively less when one
estimates the same assuming relatively less number of life period as compared
to the longer period because of higher density of the capital investment. Though
the ideal life period of the drip system okra cultivation is 5 years, the experiences
of the farmers suggest that the system may work up to 10 years with proper
maintenance. In the worst case, the system may be expected to work only up to
5 years. We have specifically attempted to see as to what extent the NPW and
BCR are sensitive to the varying life period of the drip system. The results
30 Journal of Land and Rural Studies 6(1)

(see Table 6) show that the value of BCR and NPW increases significantly when
one estimates the same assuming 10 years as life period as compared to 5 years
as life period.
An important issue with regard to the DMI adoption in crops like okra is as to
how many years are needed (payback period) for the farmer to fully recover the
capital investment in drip adoption. The year-wise NPW estimated under various
scenarios (different discount rates with varying life period of the system) suggests
that the farmers would be able to recover the entire capital cost of the drip set
from the income in the very first year itself even without availing 50 per cent of
subsidy from capital cost. This insistently disproves the commonly held argument
that recovering capital cost for drip investment in crops like okra would take
longer period.

Conclusion and Recommendations

An attempt has been made in this article to study the economic and resource
impacts of DMI on okra crop cultivation. The study reveals that cultivating okra
crop under DMI provides a number of benefits to farmers over FMI. It not only
reduces the cost of irrigation to the tune of about 15 per cent, but also helps
reducing the cost on weeding, interculture as well as on preparatory works.
Water saving due to the adoption of DMI in okra cultivation is estimated to be
about 47 per cent over FMI. By reducing the working hours of pump set through
water saving, DMI also helps to reduce the consumption of electricity to the
tune of about 375 kWh/acre over the conventional irrigation method. The
productivity difference between drip-irrigated okra and flood-irrigated okra
comes to about 16 quintal/acre, which is about 49 per cent higher than the same
cultivated using FMI.
Augmented productivity with reduced consumption of water under DMI has
also increased the water productivity and the electricity productivity substantially.
The profit (farm business income) generated from drip-irrigated okra crop is also
substantially higher by about `72,711/acre than that of the profit realised from
conventional FMI. The NPW and BCR estimated using discounted cash flow
technique reveals that the drip investment in okra cultivation is economically viable
under both ‘with’ and ‘without’ subsidy condition. The study suggests that cultivation
of okra crop under DMI would greatly benefit the farmers. DMI is indeed a boon
to the farmers not only in Tamil Nadu but elsewhere in the country especially at a
time when they are struggling to increase the productivity of vegetable crops mostly
because of moisture stress that occurs due to inadequate water supply through
conventional FMI. In most of the times, farmers are not able to realise handsome
profit due to low yield of okra under flood-irrigated condition.
Macro-level research (see Amarasinghe & Smakhtin, 2014) suggests that
owing to various reasons, the water availability for irrigation purpose is expected
to get reduced in the future, which is going to pose serious problems for farmers in
cultivating crops under conventional FMI. Increased scarcity of water will create
Narayanamoorthy and Devika 31

serious problems for small holders who mostly rely on vegetable cultivation for
their livelihood. Therefore, promoting DMI will not only curtail the distress of
the vegetable crops growing farmers but will also help improving their livelihood
opportunities. The central and state governments have been implementing various
special programmes to improve the agricultural sector in the study area as well as
in other parts of India. While planning such programmes, the governments need
to allocate certain proportion of funds specifically for promoting vegetable crops
cultivation under DMI.
Though okra crop is cultivated predominantly in many states, most farmers still
are ignorant about the fact that okra crop cultivation under DMI is economically
viable even without the support of state subsidy. This happens mainly due to
poor awareness among the farmers about the various advantages of DMI in crop
cultivation. Therefore, the benefits of cultivating okra and other similar crops
under DMI need to be propagated through quality extension network and special
broadcast programme on a continuous basis through electronic and print media.
Although the study clearly shows that drip investment is economically viable
for cultivating okra, farmers from marginal and small size groups opined that
initial investment required for installing drip system for most vegetable crops
is beyond their reach. Therefore, some well-thought-oriented arrangements may
be made for providing drip system with low cost for vegetable crops cultivating
smallholders. In view of the looming water scarcity problems in most part of
India, any initiative that helps conserving water and energy as well as augmenting
productivity of crops will not only benefit the farming community but the entire
country as well.

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