Abstract: Fresh water is a finite and a vulnerable resource that sustains life, development, and the environment. Approximately 80% of the world’s cultivable land depends on rainfall, interestingly rain-fed production produces up to 70% of the global food supply yet it’s the same system that has been threatened with frequent dry spells and long term droughts. Estimates show that uncertain weather conditions and insufficient water for irrigation could lead agricultural productivity in several countries to fall by up to 50% over the next decade, severely affecting their prospects of greater social and economic development. Rainwater harvesting is the collection and storage of any farm water either runoff or creek flow for irrigation use. Rainwater harvesting for supplemental irrigation is currently the best practice to mitigate the escalating issue of water shortage caused by concurrent agricultural droughts. One form of mitigating the negative effects of such droughts and dry spells is the establishment of small scale simple low cost supplemental irrigation schemes in rain-fed agriculture. This is to reduce the extent of crop failures and as well increase the water use efficiency WUE of crops. In a developing country like Uganda where more than 80% of the population lives in rural areas and their lives depends on rain-fed agriculture. Droughts and dry spells have greater consequences to the peoples’ survival and development. This study presents a sustainable economic solution for the problem of crop yield reduction due to short droughts during the rainy season, more particularly for maize as a staple crop. It aims at reducing maize crop failures by supplying supplemental irrigation during the critical growth stages of the plant. It employs FAO’s water productivity model (Aquacrop) to estimate and predict the potential economic benefits of supplemental irrigation as well as the cost benefit analysis to examine the optimization of the supplemental system. Results show that applying supplemental irrigation in case of low soil moisture during the critical stages of maize can have greater crop yield increments. Optimization of the system is achieved when a farmer sacrifices about 5% of his hectare piece of land to establish a runoff lined storage pond of 800 cubic meters by volume along with a diesel pump for water lifting using furrow irrigation. Using such volume of PVC lined pond covered with a natural mat of growing Azolla plant on the water surface can give optimum yields on a one hectare crop land. Azolla, the aquatic floating fern has multi benefits, however, its primary importance in this study is keeping the water pond environmentally safety. The proposed supplemental irrigation scheme has a payback period of 6 years.