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The U.S. nursery and greenhouse industry is facing twin challenges of reduced water availability and increased pressure to mitigate pollution from horticultural production. Water-recycling technology (WRT) has been adopted by some nursery producers to improve crop water productivity and to enhance water supply security. This study estimated the economic feasibility of WRT adoption if producers received some portion of retail price premiums for eco-labeled products. Three annual bedding plants, Geraniums (Pelargonium spp.), Petunias (Petunia spp.), and Chrysanthemums (Chrysanthemum spp.) and three broadleaf evergreen plants, Azaleas (Rhododendron spp.), Holly (Ilex spp.), and Boxwood (Buxus spp.) were analyzed based on their sales in the study region of Virginia (VA), Maryland (MD), and Pennsylvania (PA). Of the eight case study nurseries and two synthesized nurseries examined, five showed increased net costs with recycling. However, in almost all cases for which at least a portion of a retail consumer premium was returned to growers, the premium was adequate to compensate for recycling investment costs.

In the future, the U.S. ornamental horticulture industry may be faced with limited water resources and increased requirements to reduce pollution runoff from production areas. The concerns are most evident to outdoor, uncovered container crop production, which relies on daily irrigation. Capture of precipitation and irrigation runoff from ornamental horticulture nurseries to be recycled as irrigation could potentially generate cost savings relative to the cost of alternative water sources. Existing nurseries may incur large investment costs to modify their infrastructure for water capture to recycle. These added costs must be compared with costs of alternative sources such as off-farm municipal or on-farm well water. Using both existing case nurseries and simulated nurseries, this study employed partial budgeting for comparison of annual costs of recapture and recycling to the alternatives of either municipally delivered water or on-farm well extraction. On-site visits were conducted at mid-Atlantic ornamental horticulture operations that recycle water currently to gather data for constructing budgets and to determine factors that enhance or inhibit nursery adoption of recycling. The partial budgeting analysis was followed by breakeven analysis with regard to costs of regrading, pond excavation, and opportunity costs of land to isolate their effects on the nursery adoption decision. Six of eight case nurseries currently obtaining from 20% to 100% of their irrigation needs from recycled water achieve lower production costs as a result of recycling compared with using alternative municipal or well water sources. Recycling would also reduce pollution runoff as water containing nutrients and chemicals would be retained for reuse on the farm rather than being discharged to public water bodies. Two case nurseries and two simulated nurseries that were constructed based on average conditions for nurseries participating in a mail survey see higher production costs as a result of recycling. The cost of land regrading for water recapture, excavating the recapture pond, and the opportunity cost of production area occupied by the recapture pond are critical for determination of the least cost outcome. Public funding incentives for water collection and recycling could motivate increased water conservation and reduced pollution runoff within the horticulture industry.