Economics of Tile Drainage

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Does Drainage Pay?

Draining the excess water from the soil profile provides the necessary aeration needed for proper crop root development. As a result, there is less risk of crop damage due to too much water, and the well-developed roots will have access to the deeper water in the soil. With drainage, soil warms faster in spring, and with good aeration, biological activity is increased. The increased biological activity enhances soil structure by increasing soil aggregation and it helps provide nutrients to the crop. Drainage also helps the soil dry sooner, which provides timely field operations (planting, harvesting and other processes) and trafficability. Earlier drying of the soil provides earlier seed germination due to warmer soil temperatures. Research has also shown that crop yield is less variable from year to year with subsurface drainage (Brown et al., 1998). The overall impact of subsurface drainage is a healthier, more productive soil with more stable crop yields.

 

The challenge of determining the cost effectiveness of installing drainage is estimating the crop yield increase due to subsurface drainage (CornSoybeanDigest, 2010). The crop yield increase due to drainage depends on soil type and drainage design. With the extra income due to crop yield increase and knowing the cost of the drainage system, one can calculate the payback period. For example, if the cost of the drainage system is $650/ac and the increased crop yield has a value of $120/ac, the payback period is about 5 years, 5 months. Installing the drains in the entire field is the ideal as it gets the job done at once. However, when the cost of tiling the entire field is too much, one can install the drains in the field a section at a time over years as they can afford it. Furthermore, determining which section of the field can provide the most bank for their buck (crop yield increase) when drained would be a good strategy. For example, if there's a section of the field with a very poorly drained soil that can provide more yield increase than another section of the field with a somewhat poorly drained soil, the very poorly drained soil should be tiled first.

Commonly, tile 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 (CornSoybeanDigest, 2010). In other words, 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.

 

References

Brown, L.C., Schmitz, B.M., Batte, M.T., Eppley, C., Schwab, G.O., Reeder, R.C., Eckert, D.J., 1998. Historic drainage, tillage, crop rotation, and yield studies on clay soils in Ohio. Proc. 7th Int. Drain. Symp. 456–464.

Corn and Soybean Digest. Tile: Will it pay for itself, and how can the cost be covered? Online article, July 2010. Access link here.

 

 

The following are sources 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 for read the article.

2- Here is a link to an interactive economic calculator for subsurface drainage.

3- Iowa State University also has a video.