The effect of drainage penalties on the economic feasibility of surface (border) irrigated maize and sprinkler irrigated walnuts and alfalfa was evaluated. Profit, the measure of economic feasibility, was the difference between income from yield and the cost of water drainage, pumping energy irrigation equipment and installation, pump, maintenance label; crop establishment, and production and harvest Income was the product of price and crop yield. A water production function was used to estimate yield as a function of applied water. Surface irrigation system performance was measured and simulated to estimate costs while local irrigation dealers and cooperative extension staff were interviewed to determine costs and performance of pressurized irrigation systems. For the existing border irrigated maize silage production system total cost exceeds income by $915/ha ($369/ac). If the $1462/ha ($592/ac) drainage charge [$1.60 ha(-1)mm(-1) ($16.44 ac(-1)in.(-1))] is excluded then profit would increase to $531/ha ($216/ac). Improving border irrigation performance by increasing flow rate and decreasing irrigation time reduces the drainage cost dramatically and increases income to $1560/ha ($633/ac) but profit remains negative. Without the drainage charge, the profit increases to $659/ha ($268/ac). Walnut irrigated with solid set sprinkler systems (80% application efficiency, 0.24 m (9.3 in.) of drainage) is the only scenario which generates profits ($270/ha or $109/ac) and alfalfa irrigated with hand-move sprinkler systems (75% efficiency, 0.41 m (16.3 in.) of drainage) is not profitable even when drainage cost is excluded. This suggests that to sustain a profitable irrigation enterprise, both crop and irrigation technology change if drainage cost is included.