Profitability analysis of irrigation in sugarcane: a case study of a sugar mill in Goiás

Flavio Henrique Campos, Aline Bigaton, Haroldo José Torres da Silva, Pedro Valentim Marques and Rubens Duarte Coelho

Revista IPecege, 2017, vol. 3, issue 2

Abstract: This publication presents a financial analysis of a mobile linear irrigation system used by a sugar mill located in the state of Goiás, with the aim of providing data to feed a model that can later be used as a tool for economic analysis and profitability of irrigation in sugarcane. Annual fixed and variable costs and the direct and indirect benefits of irrigation were evaluated. The direct benefit comes from increased revenue due to increased productivity of the irrigated area and increased longevity of the sugarcane field; and the indirect benefits come from cost reductions resulting from the reduction in production area and harvesting and transportation costs. As a result, irrigation presented total annual costs of approximately R$ 72.00 per ton. The benefit/cost ratio of irrigation was 1.066, considering only the direct benefit of productivity (Stage 1), and 1.313 when considering the direct benefit of increased longevity and productivity (Stage 2). Therefore, irrigation presents good financial profitability in this case study.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ipeceg:386264

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