Economic Analysis of the Use of Reclaimed Water in Agriculture in Southeastern Spain, A Mediterranean Region

Abstract

In a global context where agriculture is the major consumer of water, there is a pressing need to look for alternative water resources. In light of there being a lack of studies that compare the use of diverse water alternatives in different crops, the overall objective of this research is to evaluate the impact generated by the use of tertiary water from an economic and financial perspective and compare it with groundwater and desalinated water. To reach this objective, a detailed study of the cost structure of greenhouse investment has been developed. Furthermore, the most traditional indicators for investment profitability have been calculated for the three different water alternatives: tertiary water, groundwater and desalinated water. The cost analyses demonstrate the relative short reach that the price of water has in an area of greenhouse agriculture exploitation, which provides a margin of increasing water costs while still allowing for economic profit. Taking into account the three water resources considered, evidence shows that the use of tertiary water is not only financially and economically viable but is also the best alternative water resource above desalinated water in terms of profitability and sustainability.