Profitability of smallholder irrigators in South Africa: Kat river valley irrigation schemes, Eastern Cape by zithu

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									                         TABLE OF CONTENTS

CHAPTER 1: Introduction                                               1

           1.1 Overview of the study                                  1
           1.2 Objectives of the study                                3
           1.3 Research questions                                     3

CHAPTER 2: Literature review                                          4

CHAPTER 3: Description of the study area                             13

           3.1 Kat valley irrigation scheme                          14

CHAPTER 4: Research methodology                                      16

           4.1 Selection of the study area                           16
           4.2 Methods employed in the data collection               16
           4.3 Methods employed in the data analysis                 17

CHAPTER 5: Characteristics of small-scale irrigation farmer          18

           5.1 Socioeconomic household characteristics               18

CHAPTER 6: Profitability of smallholder irrigation                    24

CHAPTER 7: Conclusions and Recommendations                           34

             References                                              36

                                     CHAPTER 1
1.1 Overview of the study

The Eastern Cape Province is the only province in South Africa that has all seven
ecological zones, within its boundaries. This gives the province a tremendous diversity of
weather or climate, and hence this gives the province a wide range of agricultural
activities. The annual rainfall is about 800mm. In the Eastern Cape, surface water is
abundant and the ground water is limited. The soil depth is limiting in mountain areas of
the province and soil in some instances is light, which affects the design and system of
irrigation system (Programme Formulation Report, 2000).

There are variety of small-scale irrigation schemes, community gardens and home
gardens in Eastern Cape, KwaZulu, Mpumalanga and Northern Province, with a wide
diversity of water delivery system and approaches (Brabben, 2000). Most of smallholder
irrigation farming is located in former homelands in remote areas. According to, Noël
Oettle (1998), smallholder irrigation farming sector is very difficult to define but it
involves those producing in relative small plots of land with limited resources, for
household’s subsistence or sale. Mostly family members provide the majority of labour.

Since the late 1990’s provincial governments have set up rehabilitation and management
transfer programmes across the country because these SIS (Small Irrigation Schemes)
were being controlled and managed by the agencies such parastatal cooperations.
Following the reforms of the new South Africa, management agencies were liquidated
and government gradually withdrew from its role function in SIS. In the past those Small
Irrigation Schemes were supported by the state in functions such as services, technical
advises and extension, training etc. Such removal has left those Small Irrigation Schemes
to deal with the vagaries of the schemes management and operations on their own and
some were left dysfunctional (Perret, 2002).

Eastern Cape schemes are also facing the same challenges that are being faced out by the
small irrigation schemes throughout the country, such as major infrastructural and
institutional problems, along with a local political power game that have characterized
those SIS from the outset, and that hinder the effective solving.

One of the centrally managed schemes is the Kat River Project/Scheme situated in the
Seymour (in former Ciskei) region of the province. Like many other similar projects, the
scheme faces tremendous problems. The fact that the scheme is mainly for citrus farming
due to increasing financial problems and other related difficulties as well as removal of
parastatal in 1997, including the need for the rehabilitation of the land because some trees
were planted in 1930s, the farmers today tend to produce vegetable crops for income
generation in addition to citrus. This greatly alters the income generating potential of
these farms. Since the government support in terms of credit and services provision was
lastly supplied by the Agricultural Rural Development Cooperation in1997, most of
farmers dropped out production of citrus and engaged themselves with vegetable
cropping which also confronts these problems; others had to find alternative employment.

For most of centrally managed and supported projects by government, new management
forms, based on community participation, have to be developed and the new support
services have to be designed and implemented (National Department of Agriculture,

As part of the process of restructuring small irrigation schemes, the impact of a possible
shift to alternative crop enterprises, offering higher returns to land, labour and water use
have to be evaluated. To support the process of rural development in Eastern Cape, this
study aims to provide insight into the profitability of smallholder irrigation farming,
based on information from Kat River Scheme.

1.2 Objectives of study

More, specifically, the study aims to investigate the profitability and the viability of
irrigation schemes, based on a comparative analysis of smallholder farmers located
within Kat River irrigation Scheme in Seymour, with the objective to provide useful
information for what needs to be done in promoting rural smallholder irrigation farming
in Kat River Valley to generate sustainable income for their livelihoods.

1.3 Research questions

To achieve the objectives we are trying to answer the following questions. What is the
welfare status of smallholder irrigation farmers and how does it affect the profitability of
the small irrigation farming? What institutional requirements are most crucial to improve
productivity and profitability (how crucial are, credit, land ownership and extension
services and market availability)? What can be done to increase productivity for the
benefits of the producers to earn high profitability?

                                        CHAPTER 2

                                 LITERATURE REVIEW

At present South Africa has an estimated 1, 3 million ha of land under irrigation for both
commercial and subsistence agriculture. It was introduced to South Africa soon after
arrival of European settlers, although it was really developed from 1912 onwards. In the
former homelands (Bantustans or Native areas) minor irrigation development occurred
before 1950’s around 1940’s. Most irrigation schemes were started after the publication
of Tomlinson Commission Report (1956) on socio-economic development of the
Bantustans. Tomlison Commission report and its recommendations had a major effect on
settlement; land use patterns and irrigation development in black rural areas (van
Averbeke et al, 1998 as cited by Perret, 2002).

Review of Tomlison Commission Report

In some of the recommendations of the Tomlison Commission Report that have been
mentioned above, it was a commission investigating on socio-economic development in
black rural areas of South Africa, which Eastern Cape is one of those black rural areas.
The Eastern Cape had or still affected by the Commission and its recommendations.

According to Perret (2002), the Commission suggested irrigated holdings of 1, 3 to 1, 7
ha were adequate to ‘provide a family with living that would satisfy them whereby the
whole family would work on the holdings’. The Commission went on to propose that ‘all
schemes should be placed under proper control and supervision, with uniform regulations
as regards water use rates, credit facilities and condition of settlement’.

This Commission and its recommendations had an effect in the establishment of the
Former Homelands. Perret (2002) indicated that in 1970’s, Bantustans were encouraged
to become independent, and this independence was on both political and administrative
levels. The independence resulted in the withdrawal of central government. The
homelands parastatals cooperations were created for example parastatal cooperations

such as Trancor in Transkei, Ulimocor in Ciskei, ARDC in Venda, Gazankulu, and
Lebowa etc.

2.1 Nature of smallholder irrigators

It is difficult to define it, as it means different things to different people, according to
Food Agricultural Organization (2001), the term smallholder requires some clarity as it
means different things to different people. For others smallholder is synonymous with
small scale or informal irrigation-small farm.

Despite the above mentioned that smallholder irrigation farming has got the following
common characteristics. Smallholder irrigators usually work on their own, however,
because of the investment needed to gain access to water they sometimes need to form
and work as groups. Smallholder irrigators use their own initiatives and respond to their
families’ food needs or to the market place. Farmers usually have direct access to surface
or ground water and make their own decisions about how and when they will irrigate and
how much water to apply. They usually practice a mix of commercial and subsistence
(enough for living) farming, where the family provides the majority of labour and the
farm is source of income.

According to Chancellor (1999), the nature of smallholder irrigators as people who farm
on small area, not more than 15 hectares and commonly much less, an average
smallholding in many countries is expected to be in the range of 0, 5 to 3 hectares.
Smallholders typically run their farms using family labour, although some people may
hire labour on a permanent bases or temporally bases, to help out with weeding and
harvesting. The characteristic that is common is that they are ‘resource poor’ and
according to Ellis (1998) as cited by Chancellor (1999), smallholders are or have inferior
socio economic status and the associated assumption is that subsistence farming is the
main focus of their activity.

In addition smallholders are weak in bargaining power, but what is important for them is
that their contribution to local food security, economic activity and environmentally
sound practices as well as employment is vital to rural communities.

According to Kirsten and van Zyl (1998), smallholder is one whose scale of operation is
too small to attract the provision of the services he or she needs to be able to significantly
increase his or her productivity, meaning it is these farmers that need government
assistance and who should be empowered to form part of new and vibrant agricultural
sector. This is more comprehensive definition of smallholders at broader perspective,
where the concentration is not put on the scale of the farm, which might lead to some
inappropriate definition of smallholder farmers.

2.2 Small Irrigation Schemes in SA

The small irrigation schemes (SIS) cover approximately 46 000 to 47 000ha as former
Bantustans schemes, and it is estimated that approximately 50 000ha as the garden
schemes and food plots are in 202 smallholder irrigation schemes. Most of the schemes
are located in Northern Province, almost half of them, representing 20 000 to 22 000 ha
(Perret, 2002). It is estimated that two thirds of South African small irrigation schemes
are dedicated to food plots, with subsistence purposes, and 200 000 to 230 000 rural
black people are dependent at least partial for a livelihood from such schemes.

Bembridge (1996, 2000) as cited by Perret (2002), stated that the performance and
economic success of small irrigation schemes have been very poor, falling short of the
expectations of planners and politicians and development agencies as well as participants
themselves, and that despite high investment, however, this was due to past policies,
because such economic success has never been the clear and unique objective underlying
the past policies for small scale schemes, simply because the past policies promoted
subsistence –based activities by farmers, who were virtually spoon-fed by the parastatal
agricultural cooperations. In most of the schemes are believed to have been constructed
without baseline socio-economic survey or community consultation, thus the increasing

     do enchantment with public support for small scale irrigation and withdrawal of the
     operations of the Agricultural and Rural Development Council (ARDC) has left most of
     the schemes almost dysfunctional especially in the former homelands (Kamara, 2001).

     Although it has been mentioned that some SIS (like in N. Province) have been inactive
     for many years. There are several causes that have been pointed out for such inactive.
     Those causes were pointed out as infrastructure deficiencies emanating from
     inappropriate planning and design as well as poor operational and management structures
     whereby both beneficiaries and government assigned extension officers lacking technical
     knowledge and stability, absence of community involvement, inadequate institution
     structures and inappropriate land tenure arrangements (Perret, 2002). The table below
     shows the distribution of small irrigation schemes South Africa.

     Table 1 Number of irrigation schemes in South Africa.

Province          No. of  Area      No. of  No. of             No. of     Main Commodities
                  Schemes Irrigated Farmers Food               commercial
Eastern Cape      25      9 460     7 365   3 752              2 613       Maize, vegetables,
                                                                           citrus, lucerne
Western/Northern 5           487         1 004       905       99          Vegetables, deciduous
Cape                                                                       fruits, lucerne
North-West       20          3 874       880         342       538         Wheat, cotton,
                                                                           vegetables, maize,
                                                                           lucerne, fruit
Limpopo           102  
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