The impact of the water rights system on smallholder irrigators' willingness to pay for water in Limpopo province, South Africa

Abstract

Water rights are currently receiving increased attention from scholars and policymakers due to the growing understanding that ill-defined water rights impair efficient use. In South Africa smallholder irrigation faces problems of low water use efficiency and cost-recovery of government investments. This study uses contingent ranking to analyse the willingness to pay of smallholder irrigators for changes in the water rights system. The results indicate that smallholders are prepared to pay considerably higher water prices if these are connected to improvements in the water rights system. By segmenting the population it was also shown that the importance attached to water rights dimensions varies in each segment. While lower institutional trust and lower income levels, lead to a lower willingness to pay for transferability, experiencing water shortage increases this willingness to pay. Such information is valuable in guiding policy makers in the future design of water rights.