Economic viability of irrigated coffee with different water regimes in the Cerrado

Patrícia Carvalho da Silva; Maísa Santos Joaquim; Maria Lucrecia Gerosa Ramos; Walter Quadros Ribeiro Junior; Adriano Delly Veiga

Economic viability of irrigated coffee with different water regimes in the Cerrado

2024

Patrícia Carvalho da Silva | Maísa Santos Joaquim | Maria Lucrecia Gerosa Ramos | Walter Quadros Ribeiro Junior | Adriano Delly Veiga

Abstract Climate change significantly impacts farmers' decision-making regarding the supplementary irrigation of coffee cultivated in areas experiencing water deficits. The aim of this study was to analyze the production cost and profitability of Arabica coffee under different irrigation and rainfed regimes in the Brazilian Cerrado. Four scenarios were evaluated: I. scenario before significant climate events and the pandemic, II. scenario with the effects of pandemic and climate events, III. scenario with average national productivity and average productivity in irrigated areas, and IV. scenario of specialty coffees. In Scenario I, only the rainfed treatment did not demonstrate economic viability because it did not yield a positive net present value (NPV). Scenario II showed higher internal rate of return (IRR) than Scenario I. The national production and Cerrado scenarios proved viable under the evaluated price conditions and interest rates. The rainfed sector was highly attractive for the specialty grain scenario (IV) than for other scenarios. Productivity and the amount paid per bag of coffee were identified as the variables that had the most significant impact on the IRR of the coffee crop. Therefore, economic and technical analyses should be conducted before investing in coffee farming to ensure the success of each production system.

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