If you can find the true annual cost of an irrigation system it is easy to assess the annual cost of the investment and annual power and labour cost by the number of acre the system provides for each party.
Estimating annual irrigation cost is the first step in determining a fair system for split irrigation cost between neighbours. Annual irrigation cost can be divided into two categories: annual cost of ownership and the annual cost of operation, mainly the cost of energy and labour. The annual cost of ownership is often estimated by the depreciation, interest, repairs, taxes, and insurance formula which spreads the actual cost of ownership of an equipment investment over its usable lifespan or investment period. A standard procedure is outlined on page 7 of Michigan State University Extension Bulletin E-2131, “Custom Work Rates in Michigan”. This formula can provide you with the annual cost of the original investment in equipment and improvements.