I have done something similar to that to detect water level, however this time I want to avoid any electrical connection due to corrosion, Ok AC isnt going to promote electrolysis, however in the uk even stainless left outside goes dull, so I want to go capacitive sensing with the electrodes sealed away from the elements.
My circuit has an osc just like the upper section, only the signal Vfa goes to one side of a sense capacitor, and the other side of the capacitor goes through a 1n4148 and a cap to ground, to integrate the o/p level, water on the sensor increases the capacitance and more energy gets coupled through and hence the o/p voltage goes up.
This then goes to an analogue in on a processor whereby if the voltage exceeds a setpoint the processor says its raining, it might even be feasible to have a long delay integrator in software to compensate for contamination on the sensor.
The soil moisture sensor is just a couple of tracks on a pcb sealed up with solder resist.