The economics of smallholder irrigation water management : institutions, water-use values and farmer participation in KwaZulu-Natal, South Africa.

Ph. D. University of KwaZulu-Natal, Pietermaritzburg 2014.

In recognition of the role of smallholder irrigation farming in ensuring better rural livelihoods, the South African government has made substantial public investment in irrigation infrastructure. The most important perceived problems of communally-managed irrigation schemes in South Africa are the provision of an assured water supply and institutional support relating to water and land allocation, appropriate management, managing local conflicts and farmer participation and collective action in managing water resources. However, if one is to consider international standards as a yardstick, most communallymanaged irrigation schemes in South Africa are undergoing Irrigation Management Transfer (IMT), where the responsibility of managing, operating and maintaining irrigation schemes becomes that of the farmers instead of the state. The most critical issue, given the history of poor performance of smallholder farmers in South Africa, is the extent of users' involvement in irrigation water management. While user participation in water resource management is a South African and international principle, the question is whether smallholder farmers appreciate the importance of and possible benefits to be accrued from the participation. The objectives of the study were: to assess water governance and institutional arrangements and their effects on irrigation management in the Mooi River Irrigation Scheme (MRIS) in KwaZulu-Natal, South Africa; to assess the implication of institutional and management systems on water-use security; to assess the level of farmer participation in collective agricultural water management and the factors affecting users' willingness to do so; and, lastly, to estimate and explain the variation in average irrigation water values as a basis to understand the water management challenges at smallholder farm level. The study used a number of data collection and analytical techniques to achieve the specific objectives. Participatory rural appraisals, which included focus group discussions and key informant interviews, and three household surveys comprising of 60, 71 and 307 respondents were conducted to answer the specific questions. Water governance and institutional arrangements are critical in shaping the long-term sustainability of smallholder irrigation schemes. The Institutional Analysis and Development (IAD) framework and Ostrom's eight institutional design principles were applied for assessing the linkages and effectiveness of institutions governing the management and use of irrigation water resources in the Mooi River Irrigation Scheme. The study found that water user participation was hindered by farmers' lack of understanding of water policies that are driving the formalisation of local water management systems, which include the registration of water user associations and the requirement for farmers to contribute towards the sustainability of such associations. The role and relevance of water-user associations as formal local water governing institutions and their linkages to informal management structures like local irrigation committees and traditional leadership are weak and require farmer training to enhance coherent institutional linkages at local level. Weak regulatory instruments characterised by poor rule enforcement mechanisms, lack of secured property rights (especially for land) and lack of water security impact irrigation water management among smallholder farmers negatively. Irrigators in community-managed schemes have varying levels of water access. However, the greatest challenge in these schemes is lack of understanding of the level of water-use security and the influence of local management systems. As such, the study assessed the implications of institutional arrangements on agricultural water-use security. The study recognised the multifaceted nature of agricultural water-use security and therefore applied the Lancaster- Maler model in the conceptualisation of water use at farm level. After applying Principal Component Analysis (PCA) to construct water-use security indices based on the desired attributes of irrigation water, the Ordinary Least Square (OLS) regression technique was applied to identify factors affecting water use at farm level. The results show that agricultural water-use security can be grouped into three main dimensions, namely: physical on-farm availability of irrigation water, existence of effective enforcement mechanisms pertaining to water appropriation, and effective involvement of water users in decision-making processes. The study points to the fact that water-use security at farm level is relative and therefore no absolute measures can be applied. Furthermore, the three dimensions of agricultural water-use security are affected by, among other things, farmers' experience in irrigation, household income, effectiveness of irrigation committees to enforce appropriation rules, membership of an irrigation scheme, membership of a water user association, as well as resource and cost sharing. To ensure improvement in agricultural water-use security among small-scale irrigation farmers, institutional arrangements that promote the effective participation of farmers in decision-making and conflict management mechanisms are recommended. This can be augmented by creating mechanisms that ensure equitable sharing of resources and costs among common pool resource users. Improving the capacity of local institutions and management structures to minimise unsanctioned access to common pool resources (CPRs) may also improve water-use security. In line with current focus by most developing countries, including South Africa, to transfer management of communal irrigation schemes from state to farmers, an understanding of the determinants of farmer participation in collective activities forms the basis for improving the management of previously government-funded schemes. Empirical results of Tobit and the Ordered Probit models, estimated using cross-sectional data from 307 randomly selected smallholder irrigators, suggest that collective activities are negatively affected by low farmer-literacy levels. Furthermore, the number of consecutive days per week that farmers go without access to irrigation water was used as a proxy for water scarcity, and was a significant determinant of farmer participation. The existing incentives for water-users in the Mooi River Irrigation Scheme were weak and need to be improved to encourage farmer participation in collective water management. This calls for strengthening of local water management systems and institutional policies to ensure maximum benefits from participating in collective activities. In a bid to understand on-farm water utilisation and management processes, water valuation was performed using irrigation data collected from 60 farmers over a single production cycle spanning the time from planting to harvesting. Furthermore, the SAPWAT 3 model was used to generate secondary data on irrigation water requirements for selected crops predominantly grown by farmers in MRIS. The residual value method was applied to both primary and secondary data to estimate water values and understand the factors affecting the magnitude of the values across irrigation plots. The results indicated that most farmers in the Mooi River Irrigation Scheme applied less water (average of 61.4%) to their potato crop, ranging between 14% and 174%, when compared to the irrigation water requirements. Crops with relatively low gross margins like maize and dry beans yielded lower average water values of ZAR1.31/m3 and ZAR1.09/m3 respectively, while tomatoes yielded ZAR11.78/m3. Based on primary data gathered over the entire production cycle, the average water value for potatoes was ZAR0.50/m3, ranging from negative ZAR17.57/m3 to +ZAR12.66/m3, which were lower than that imputed from secondary provincial budget estimates, i.e. ZAR2.10/m3. This suggests poor performance by farmers in the study area. The variability of water value was significantly influenced by the location of the irrigated plot along the main canal, which accounted for 12.5% of the variation. The number of irrigation cycles and education level of the farmer explained 5.8% and 5.9%, respectively, of the variation in average water values. The study illustrates that where water is provided free of charge to a large group of users, unequal distribution, poor management and inefficient use are the challenges commonly encountered. Negative water values also revealed under-performance and the potential high level of indirect government subsidisation of smallholder farmers, mainly through provision of irrigation infrastructure. In sum, the study has shown the complexity of managing common pool resources at a localized level, and pointed to the need to further understand the institutional dynamics in which smallholder irrigation farmers operate. In view of the parallel arrangements between formal and informal water management structures in communally managed schemes, it is recommended that the traditional authorities be incorporated in the water-user associations as ex-officio members and be the custodians of rule enforcement at community level. This might improve compliance to appropriation rules, where the traditional courts can be used concurrently with water user associations to settle local water disputes at community level. Furthermore, communally-managed irrigation schemes still lack capacity for self-management and the negative water values signify poor performance. It is therefore recommended that both human and financial resources as well as technical backup still need to be provided through government support programmes to avoid the widespread collapse of communally-managed irrigation schemes in South Africa. However, such support should mainly be through capacity building, training and provision of expertise in irrigation management to enable the users to manage the scheme on their own, while putting mechanisms in place to ensure that irrigators pay for the maintenance of the infrastructure using returns from irrigation farming.