Abstract
This study explores the feasibility of investing in modern irrigation methods for small farmers who rely on date palms as the main crop. The financial and cost-benefit analysis proves that the invest-ment in such a method has the ability to recover all the costs at the end of the first year and then realize benefits. The feasibility was highest for the farmers who use irrigation water provided by the Saudi Irrigation Organization (SIO) compared to those who use their own private wells. The reduction in the electricity bill estimated at about 40% because of rationalizing the use of water con-stitutes an incentive for owners of private wells to switch to modern irrigation methods, and their benefits will be the highest in case they shut down their wells and use water provided by SIO. The study also tested the ability of small farmers to pay the irrigation water tariff expected to be applied in the future, and showed that the highest price a palm date farmer can pay is estimated at about 0.06 riyals/m3 of water, which is an indication of their ability to respond if water tariff is imposed. And based on the amount of water that SIO provided to farmers during 2019, if the mentioned rate of water value is adopted as a tariff, the return for SIO is estimated at about 8-9 million riyals annually.