Water productivity in smallholder irrigation schemes in South Africa

This study investigates the productivity and value of water in two smallholder irrigation schemes (Zanyokwe and Thabina) in South Africa. We apply the residual valuation method (RVM), willingness to pay (WTP) and cost-based approaches (CBA) (i.e. accounting costs of operation and maintenance) to evaluate water productivity and values per crop, per farm, and by scheme. In both schemes, water value estimated by the RVM for vegetables (cabbage, tomatoes and butternuts) is greater than water value for dry maize. At the farm and scheme levels, a comparison was made between gross margin per m³ of water, WTP per m³ and accounting cost per m³ to estimate the relative value of water productivity. The active farmers in the Zanyokwe scheme have lower WTP per m³ (R0.03) than the gross margin of output (R0.69). Also, the accounting cost (R0.084) per m³ of water is less than the gross margin. In the Thabina scheme, active farmers are willing to pay (R0.19) per m³ of water. Hence farmers in Thabina are ready to pay as much as three times the proposed costs of O&M (R0.062) per m³ of water used. Both the accounting cost and willingness to pay are less than the gross margin per m³ of water in the Zanyokwe scheme. Our findings indicate that extension and training may be required to improve the productive use of water for those farmers whose returns are insufficient to cover the cost of supply.