ESTIMATING THE EFFECT OF WATER CHARGE INTRODUCTION AT SMALL-SCALE IRRIGATION SCHEMES IN NORTH WEST PROVINCE, SOUTH AFRICA

In South Africa water law has recently changed, adopting the principle of water as an economic good,thus levying charges on its use. For small-scale irrigators this is an important change, becausecurrently their water use is entirely subsidized. In the coming years, subsidies will gradually decreaseand an essential expected benefit of this policy change is that water use efficiency will rise, leading toreduced consumption and possible reallocation of the water saved. The exact impact of the waterpricing policy on the irrigation water use or on the farmers' production system is however unclear.This study introduces a new methodology, based on data envelopment analysis, that allows estimatingthe effects on the agricultural production process and water demand of introducing or raising a waterprice. It is revealed that a large majority of the farmers does not adjust water use. Production costshowever were shown to increase significantly.