Economic Viability of Micro-Irrigation Technologies in Smallholder Horticultural Farming

Abstract

This study investigated the economic viability of Micro Irrigation Technologies (MITs) compared with traditional furrow irrigation in smallholder horticultural farming in northern Tanzania. Using a quasi-experimental cross sectional design, data were collected from 540 farmers, divided into adopters and nonadopters of MITs. Economic metrics, including net present value (NPV), the benefit‒cost ratio (BCR), and the internal rate of return (IRR), were analysed over a five-year investment horizon through statistical methods in SPSS and Microsoft Excel. The results indicate that MITs, particularly drip and sprinkler systems, increase the productivity and profitability of high-value crops such as onions and tomatoes, yielding significantly higher NPVs than furrow irrigation does. Despite their high initial costs, these technologies demonstrated long-term economic benefits, including improved water efficiency and labour cost savings. Regression analysis further revealed that both crop type and irrigation technology significantly influence economic outcomes. Onions and tomatoes under MIT presented the highest financial returns, whereas peppers under furrow irrigation achieved better cost efficiency. This study underscores the transformative potential of MITs in enhancing horticultural productivity and sustainability in water-scarce regions. The study recommends targeted interventions, including subsidies, financial incentives, training programs, and policy support, to scale up the adoption of MITs.