This study assesses the agronomic and economic advantages of replacing traditional flood irrigation with drip irrigation for sugarcane cultivation in water-scarce Upper Egypt. Confronting severe water shortages and inefficient conventional practices, we conducted a three-year comparative field study assessing crop yields and water use efficiency. The results reveal that drip irrigation improves water-use efficiency by 44% and increases sugarcane yields by 22% relative to flood irrigation, while also elevating net profits by 50%. Drip irrigation demonstrated an average efficiency of 85–90%, compared to 50–60% for flood irrigation. These findings underscore the dual benefits of drip irrigation in addressing water scarcity and enhancing agricultural productivity. The study provides compelling empirical evidence supporting drip irrigation as a sustainable solution for arid regions. To ensure long-term water resource sustainability and food security, we urge policymakers and agricultural stakeholders to prioritize large-scale adoption of drip irrigation systems through targeted investments and policy interventions.