Economic Feasibility and Water Footprint Analysis for Smart Irrigation Systems in Palm Oil Industry

Abstract

The Malaysian palm oil industry is the second largest global producer of palm oil products in the world after Indonesia. However, oil palm plantation activities are typically very labour-intensive and inefficient. The rapid development of technologies, especially Industry Revolution 4.0 technologies, has brought forward a variety of advanced smart technologies and systems that can be adapted in the palm oil industry to improve the efficiency and yields in the industry as well as create better economic performance. This work aims to explore and quantify the potential of adaption and implementations of smart irrigation system in oil palm plantations. The proposed approach considers economic performance (return of investment, ROI) and water footprint (additional water usage) of smart irrigation. In addition, the analysis also includes the consideration of different server setup options and plantation sizes. The results show that smart irrigation is a feasible method to be implemented in oil palm plantations with positive economic performance for plantation with land size more than 1.5 ha. The findings also show a significant reduction in water footprint and costs in the smart irrigation system to achieve optimal moisture conditions in a plantation. This paper provides insight for oil palm stakeholders to understand the feasibility and performance of smart irrigation systems as a feasible option to transform oil palm plantations with Industrial Revolution 4.0 technologies.