2. Some economic analyses

Summary

Field trials in Victoria have demonstrated that a variety of tree species have high survival and growth rates when irrigated with recycled municipal effluent. This paper presents some analyses of the economics of irrigating plantations of trees with recycled water. Three case studies are examined, these being radiata pine (Pinus radiata) grown for sawlogs, poplar (Populus spp.) grown for peeler logs, and flooded gum (Eucalyptus grandis) grown for firewood. The profitability of each case study was examined for both flood irrigation and fixed-sprinkler irrigation. The effect of varying the interest rate between 3% and 7% (real) was also studied.

The analyses show that when the costs of both land and irrigation are charged to the project, radiata pine under flood irrigation is profitable at interest rates between 3% and 7%. and poplar under flood irrigation is profitable at an interest rate of 3%. Neither species are profitable with fixed-sprinkler irrigation, and flooded gum grown for firewood is clearly uneconomic for both types of irrigation. Radiata pine and poplar are shown to be more profitable than agriculture of irrigated pastures carrying 20 dry sheep equivalents, which in turn was considerably more profitable than flooded gum.

Given the nature of the data used in these analyses, the results should be regarded as indicative rather than definitive for all situations. The results do highlight, however, that when examining proposals for recycling municipal effluents, there will be some situations where irrigation of plantations of trees warrants serious consideration either as a profitable venture in its own right, or as a means of defraying the costs of effluent treatment.