An important issue is the impact of climate change on farming in Uruguay. The recorded average annual rainfall is 1200 ml quite evenly spread throughout the year. Some studies show that in the future there might be more rainfall in Uruguay. Perhaps more extreme rainfall in a short period of time and followed by dry spells.
At this moment we do not see many farm with irrigation. The few farms that have irrigated crops, usually created a lake and installed circle pivots. These circle pivots are often imported from the USA.
A year ago, Uruguay suffered a severe drought and it experienced an urgent lack of water for farming and even drinking water. For that reason a reconsideration of water needs and potential for irrigation was needed. The authorities support farmers/landowners who wish to improve their farming operation by integrating an irrigation system. The state bank provides loans and the national authorities created an incentive by deducing the investment in irrigation from the income tax for a period of 20 years.
Farmers make a calculation of the cost of construction and maintenance of the system. Especially, the cost of electricity is relatively high, about 50% of the entire operating cost. For that reason, most farmers do not proceed with new projects. And in other cases, where farmers did invest in irrigation they decide not to have the system running.
Looking at the last 6 months there was no need for irrigation with abundant rainfall in summer and fall. In certain weeks, over 300 ml were recorded.
We also see this reflected in the decision making for crop insurance where it is possible to include damage caused by drought and also damage caused by too much rainfall during seeding or harvesting. The latter is often included by farmers whereas drought is considered a minor risk.
This might change in the future when the cost of a new irrigation project reduces or when the impact of climate change leads to more extreme weather conditions leading to damage to the crops in summer.
