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Estimating The Effect Of Water Charge Introduction At Small-Scale Irrigation Schemes In North West Province, South Africa

Author

Listed:
  • Speelman, Stijn
  • Buysse, Jeroen
  • Frija, Aymen
  • D'Haese, Marijke F.C.
  • D'Haese, Luc

Abstract

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, because currently their water use is entirely subsidized. In the coming years, subsidies will gradually decrease and an essential expected benefit of this policy change is that water use efficiency will rise, leading to reduced consumption and possible reallocation of the water saved. The exact impact of the water pricing 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 estimating the effects on the agricultural production process and water demand of introducing or raising a water price. It is revealed that a large majority of the farmers does not adjust water use. Production costs however were shown to increase significantly.

Suggested Citation

  • Speelman, Stijn & Buysse, Jeroen & Frija, Aymen & D'Haese, Marijke F.C. & D'Haese, Luc, 2008. "Estimating The Effect Of Water Charge Introduction At Small-Scale Irrigation Schemes In North West Province, South Africa," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6646, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa107:6646
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    File URL: http://purl.umn.edu/6646
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    References listed on IDEAS

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    9. Gomez-Limon, Jose A. & Riesgo, Laura, 2004. "Irrigation water pricing: differential impacts on irrigated farms," Agricultural Economics, Blackwell, vol. 31(1), pages 47-66, July.
    10. Tim Coelli & Sanzidur Rahman & Colin Thirtle, 2002. "Technical, Allocative, Cost and Scale Efficiencies in Bangladesh Rice Cultivation: A Non-parametric Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 607-626.
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    Cited by:

    1. Moore, Madison, 2015. "The Economics of Water: The Effects of Irrigation on Average Farm Revenue," SS-AAEA Journal of Agricultural Economics, Agricultural and Applied Economics Association.

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    Keywords

    Production Economics; Resource /Energy Economics and Policy;

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