Factors Influencing the Success Potential in Smallholder Irrigation Projects of South Africa: A Principal Component Regression

The objective of this paper is to examine the role of the factors expected to influence the success potential of small holder irrigation projects as they apply in the South African context. The study was conducted in six smallholder irrigation schemes in three provinces namely: Eastern Cape, Limpopo and Mpumalanga. To determine the farmers' potential success (dependent variable), a cluster analysis was conducted yielding two groups of farmers - the less successful and more successful. The principal component regression (PCR) tool was used to analyse the data and deal with the problem of multicollinearity, transforming the explanatory variables into principal component estimators. There were fourteen explanatory variables. Out of the nine statistically significant variables, seven have the expected sign. These are infrastructure, market access, research & development, off-farm income and extension (significant at the 1% level) while planning and transport are significant at the 5% level. The study has shown which areas should receive specific attention to improve the success potential in South African smallholder irrigation projects.