2019 ASHS Annual Conference

Nurseries and Greenhouses represent the largest agricultural sector in New Jersey measured by dollar sales. Nursery production is relatively intensive with respect to chemical and nutrient inputs, and the industry seeks voluntarily to reduce its impacts on downstream water quality. Recycling irrigation and rainwater is more common in drought-ridden states like California than it is in New Jersey. Water recycling has obvious benefits in terms of water conservation and reduced runoff of nutrients and pesticides into the watershed. However, it has high up-front capital costs, possible recycling of plant pathogens along with water and fertilizer, and a complicated choice from among several disinfection technologies. We are creating a computerized capital investment decision tool for nursery operations throughout the U.S. The tool includes both financial and technical factors within a conceptual model that not only helps the environment, but also clarifies private return on investment. For at least some growers, the return on investment for recycling systems could be positive: it would useful for federal policy makers to know how common this phenomenon is. Focusing on small growers will ensure that the extension community is not misled by studying only large, sophisticated technology adopters whose capital investments are more likely to pay off. We met with extension experts in other states and vendors to obtain technical advice on what systems have worked and tested the quality of tailwater at the project test site as a benchmark for the condition of tailwater in the absence of recycling. We examined key papers in the research literature and found two methods of generalizing the dollar costs and benefits of investments in water recycling. In a top down approach, the researcher collects a large sample of financial data on a set of operations, pre- and post-investment and calculates average or typical dollar values to produce a software tool to determine “what you might expect to pay,” etc. A bottom up replicates what a contractor would do when costing out a particular project for a particular operator. It uses real vendor prices for various components, adjusted to account for the size of the operation in water volume and/or acreage (e.g., $X per foot of pipe times 1000 feet of pipe). This approach handles mainly capital costs, not operating costs and operating benefits.
Recruiting local, small growers was a major challenge, similar to that faced by the EQIP program itself, so we have relied heavily on literature to develop our model. While smaller operators have the largest impact on the Cohansey watershed in the aggregate, they are, cautious about innovations and investments and are wary of government programs that provide funds, with the inevitable strings attached. Stresses about labor availability occupy operators’ time. The technical literature on the financial costs and benefits of water recycling has grown in quantity and quality since we made our own contribution to this literature in 2015. The literature finds a small number of factors dominate the profitability of water recycling. First, producers need to build a pond or regrade land for better water flow. Second, construction activities are so expensive that they tend to make the investment unprofitable. Third, if municipal water is the water source, it is so expensive per gallon that recycling will be cost effective in many of these cases. Fourth, recycling investments are less likely to be profitable on smaller operations due to economies of scale if capital costs are required for considerable earth moving such as pond construction and a new well. Producers who already have a suitable pond and are already considering drilling a well might receive positive gains from recycling.
We have created flowcharts for all components of the decision making took and have programmed the regulatory risk component of the software tool. We expect to complete the software decision tool and arrange for its evaluation by growers, vendors, extension personnel, and other experts within the next six months.