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An Analysis of Economic Feasibility on the Automated Agricultural Wager Management using Alternative Cost Approach

Published by the American Society of Agricultural and Biological Engineers, St. Joseph, Michigan

Citation:  2007 ASAE Annual Meeting  072070.(doi:10.13031/2013.23217)
Authors:   Sun Joo KIM, Yong Keun JEE, Chang Young Eim
Keywords:   Economic feasibility, Automated agricultural water management, Cost-benefit analysis, Alternative cost approach

Recently, the average age of rural areas sharply became older in Korea, and suffering from the lack of labor force for farming and management of irrigation facilities. Most of the facilities are maintained by the managers of water source facilities and channels. Among the costs, operating and maintaining cost is increased from 41.4% in 1999 to 54.2% in 2006 through the increase of labor cost (Statistical Yearbook of Land and Water Development for Agriculture, 2006). For this reason, some irrigation projects already equipped with an automated water management system. Therefore, to study and calculate the economic effects of the system are necessary for providing basic data about economic effect which will be helpful of establishing polices which are aimed for popularizing and revitalizing the system. This study indirectly analyzed and evaluated the economic value resulted from the effect of saved labor and water by the system using alternative cost approach which is a method of evaluating the value of none market property. Because, there is basically no fee for the agricultural water use. The evaluated subject area is Chung-ju automated district, located in the middle of Korea, and Seong-ju dam and Donghwa dam, located in the southern west and in the southern east of Korea, as an alternative good is applied. As a result, saved total agriculture water was 8 million ton per year, and the economic benefit of it was 270~354 hundred million ton.

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