Irrigation Water Value at Small-scale Schemes: Evidence from the North West Province, South Africa

Abstract

Insight into the value of water is essential to support policy decision making about investments in the water sector, efficient allocation of water and water pricing. However, information on irrigation water values at small-scale schemes is scarce and in general little attention is paid to the determinants of these values. In this study values are calculated for small-scale irrigation schemes in the North West Province of South Africa, using the residual imputation method. An average water value of US$0.188/m³, in line with expectations for vegetable crops, was found. Furthermore, the crop choice and the irrigation scheme design and institutional setting were shown to significantly influence the water value, whilst individual characteristics of farmers proved to be less important.

Notes

1. The average ZAR/US$ exchange rate for the period July–September 2005 was used for conversion: 1 ZAR = 0.1504US$ (source: IMF, 2006).

2. One of the sources for comparison used are the Combud budgets. These are detailed enterprise budgets for each province in South Africa, published on a regular basis by the Provincial Departments of Agriculture. The budgets do not contain water use, but crop irrigation requirements for the budgeted crops could be calculated with the irrigation scheduling tool SAPWAT (SAPWAT, 2003).

3. Tamhane's T2 was used since a significant Levene statistic (p < 0.001) indicated that equal variances could not be assumed. Tamhane's T2 is a post hoc test specially designed for situations in which population variances differ and is conservative in relation to type 1 errors (Tamhane, 1979).