Investigation of the economics of water as used by smallholder irrigation farmers in South Africa

This study investigates the economics of water as used by smallholder irrigation farmers in South Africa. The productivity and value of water were estimated with data from two smallholder irrigation schemes: Zanyokwe and Thabina. Production parameters such as fertilisers, seeds, pesticides, equipment, transport, labour, and water were treated as inputs. Various methodologies used to estimate water value, including cost-based approaches, were thoroughly reviewed. The aim was to select the ones with more justification for use in smallholder irrigation sector and also to compare a number of approaches. On a case study basis, three methods were applied: residual valuation method, willingness to pay and cost-based approaches (i.e. accounting costs of O&M). Water productivity and values were then evaluated as per crop, farmer, and scheme. Also, cross-section regression analysis was used to investigate the effect of some key socio-economic factors of production on gross margin and willingness to pay. (Résumé d'auteur