For the pdf version of this bulletin, click here.


8. Economics of drainage

Surface drainage is a cheaper option to prevent surface water ponding and controlling runoff without causing erosion. In this system, excess water from the soil surface flows over the naturally or artificially sloping ground toward shallow ditches and grassed waterways.

It is best to install surface drainage prior to installing a subsurface drainage system. However, surface drainage can be installed after subsurface drainage installation, but caution is advised to keep the minimum 2-ft cover above the drain pipe during land grading. Two types of surface drainage systems are described below: Parallel ditch and targeted.

When installed in a poorly drained soil in the Midwest USA, subsurface drainage has clear economic advantage, and it pays very well. Benefit is from the increased crop yield compared to an undrained field, and cost is from the drainage system. Percent corn yield increase can range from 20% to 80%. Payback period ranges from 2 to 6 years for corn (Ghane et al., 2021). The site-specific payback period depends on:

1- Long-term average growing-season rainfall

2- Drainage design (drain depth and spacing)

3- Soil property (saturated hydraulic conductivity and depth to restrictive layer)

4- Economics (interest rate, depreciation, maintenance cost, pipe cost, installation cost, corn price).

Drainage Does Not Cost. It Pay!


How should drainage investment be done when renting land?

Typically, drainage investment is done by the landowner because it increases the value of the land. In the scenario that the land operator wants to invest in the drainage system, the rental value should not increase as the operator is paying for the drainage system. In addition, the operator and landowner should agree on having a long-term lease that provides enough time to pay off the drainage-installation loan (FarmProgress, 2010). The lease term should be greater than the amortization period of the drainage-installation loan. Otherwise, a buyout clause should be added to the lease agreement.


Other Resources

The following are resources to help better understand the economics of subsurface (tile) drainage:

  1. Iowa State University has published an article entitled understanding the economics of tile drainage. Click here to read the article.
  2. Here is a link to an interactive economic calculator for subsurface drainage.
  3. Iowa State University also has a video.