Economic Water Productivity and Determining the Profitability of Almond and Walnut Cultivation in Jiroft County

Document Type : Research Paper

Authors

Water Engineering Department,,. Faculty of Agriculture. Shiraz University. Shraz. Iran

Abstract

In conditions of drought and water shortage in the country, economic evaluation and determination of the economic productivity of water in orchards is of particular importance. This article examines the cultivation of almond and walnut trees from an economic perspective in the Esfandaghe region Jiroft County of Kerman province. For economic evaluation, internal rate of return, present value, and benefit-cost ratio methods were used. The economic analysis period in this plan was considered to be 50 years. The internal rate of return values was calculated as 37.6 percent for almonds and 25.4 percent for walnuts. This rate is an acceptable rate for long-term agricultural projects such as the project in question, given that the long-term bank interest rate in 1400 was 18 percent and the internal rate of return is a significant number compared to the bank interest rate, so implementing this project has priority compared to bank deposits. Based on the internal rate of return, almond tree cultivation is economically preferred. The calculated benefit-cost ratio at discount rates of 18, 23, 25, and 30 percent was 7.16, 7.06, 7.02, and 6.92 for almonds, respectively, and 1.83, 1.21, 1.033, and 0.69 for walnuts. According to the calculated benefit-cost ratio, almonds are economically justified at the aforementioned discount rates, while walnuts are not economically justified at a discount rate greater than 25. On the other hand, the economic productivity obtained for almond trees at discount rates of 18, 23, 25, and 30 percent was positive, while for walnuts at a discount rate of 30 percent, it was negative. Therefore, in the study area, planting almond trees is more economically profitable than walnuts.

Keywords

Main Subjects


Introduction

Today, agriculture is an economic activity that plays a very important role in the gross domestic product of any country and in ensuring the food security of its people. On the other hand, Iran has limited water resources and its rainfall is one-third of the global average, and the spatial and temporal distribution of rainfall does not match the needs of agriculture, which is the main consumer of water. Iran is considered one of the driest regions in the world, as it is located in the global dry belt. On the other hand, Kerman Province is considered one of the driest regions of Iran due to its specific geographical location and very scattered ruggedness. Iran is one of the major producers and exporters of almonds, and in terms of the area under walnut cultivation, it is also among the countries with the largest area under walnut cultivation. In addition, Kerman Province is one of the important provinces of the country in the field of producing horticultural and agricultural products. Previous studies indicate that economic evaluation and determination of water footprint in orchards in drought and water shortage conditions in the country are of particular importance. Despite the importance of almond and walnut trees, there is limited information in this field in Iran, therefore, considering the importance of this issue and considering the economic importance of these trees for orchardists in the region, it was necessary to conduct an economic evaluation in the desired region, and in the present study, economic evaluation and determination of water footprint and planting of local variety almond and walnut trees in the Esfandaghe region Jiroft County of Kerman province were addressed.

Materials and Methods

Esfandigheh Rural District is one of the rural districts in the central part of Jiroft County, covering an area of  nearly 3,472 square kilometers and located 75 kilometers west of Jiroft County. The prevailing climate of the dry region is semi-hot and temperate. In general, the Esfandagh region is mostly mountainous, with an altitude of 1750 meters above sea level and an average rainfall of 250 millimeters per year. The maximum and minimum temperatures in this region are 45 and -8 degrees Celsius, respectively. The studied garden is located in the village of Koran, where the surface irrigation method is used and the irrigation water for the gardens is provided through the permanent Gishki River, along which the operators use branch canals to transfer the water to the water storage pools and water supply canals of the garden. In the studied orchard, there were 100 walnut trees with 10×10 spacing per hectare, and 238 almond trees with 6×7 spacing per hectare. All the trees were fruitful and produced an economic crop. The two orchards were selected based on the possibility of accurate measurements and cooperation from the orchardist, and also to be representative of the conditions of the orchards in the region in terms of tree variety and age, and common irrigation methods. In this study, with the aim of economically evaluating the planting of almond and walnut trees, engineering economics methods were used, namely net present value (NPV), internal rate of return (IRR), and benefit-cost ratio (BCR). Also, based on a brief study of the market for these products, an economic assessment was conducted of the useful life of almond and walnut trees, and based on the information collected, the present value of the result, the internal rate of return, and the benefit-to-cost ratio for almond and walnut trees were calculated.

Results and Discussion

In this study, the internal rate of return values for almond and walnut were calculated as 37.6 and 25.4 percent, respectively. Therefore, based on the internal rate of return values, almond tree cultivation is economically prioritized. Based on the results of economic calculations, the present value values for almond trees were positive at discount rates of 18, 23, 25, and 30 percent, while for walnuts it was negative at a discount rate of 30 percent, indicating that walnuts are not economically justified at a discount rate greater than 25 percent. The results of the economic evaluation showed that, according to the calculated benefit-cost ratio, the almond tree was economically justified up to a discount rate of 30%, while the walnut tree was economically justified up to a discount rate of 25%. At a discount rate of 30%, the benefit-cost ratio of walnut was calculated to be less than one (0.69), and the present value and economic productivity of water were also negative, indicating that walnuts lose their economic justification at interest rates higher than 25%. Based on the calculations of the economic productivity values of almond and walnut trees in this study, the economic productivity value of almond juice was a positive number at all calculated discount rates, while for walnuts, at a discount rate of 30 percent, its value was negative (-13.2), indicating that walnuts are not economically viable at this discount rate. The results of the water footprint assessment showed that since the amount of irrigation water was less than the water requirement of the trees, it was not possible to calculate the green water. On the other hand, the calculation of green water could not be calculated due to the unavailability of rainfed cultivation information. Therefore, given that the water consumption was less than the potential limit and in drought conditions, the farmer is forced to apply deficit irrigation and no additional water is given to be included in the gray water estimate, this value was reported as zero. In terms of frost considerations, walnut trees in the studied region are more at risk of frost than almonds. However, it should be noted that additional research by experts is needed to examine the effect of frost on these trees in order to provide definitive results.

Funding

The study was funded by Shiraz University, Iran national Science foundation (INSF), and Grant No. 2GCU1M222614.

Authorship contribution

All authors contributed equally to the conceptualization of the article and writing of the original and subsequent drafts.

Declaration of Generative AI and AI-assisted technologies in the writing process

During the preparation of this work no AI-assisted technology was used.

Data availability statement

Data will be made available on request.

Acknowledgements

The authors gratefully acknowledge Shiraz University Research Council, the Drought Research Center, and the Iran National Science Foundation (NSF) for funding.

Ethical considerations

The authors avoided data fabrication, falsification, plagiarism, and misconduct.

Conflict of interest

The author declares no conflict of interest.

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