The rural and agricultural value of groundwater as an economic resource in the Limpopo region

Mahumani, Brian Kudzai (2009-03)

Thesis (MScAgric (Agricultural Economics)--University of Stellenbosch, 2009.

Thesis

This thesis constitutes a socio-economic study that centres on determining the economic value of groundwater in rural and agricultural uses. Limpopo Water Management Area (WMA1) and Luvuvhu/Letaba Water Management Area (WMA2) were studied in this thesis. In WMA1 table potato irrigation in the Polokwane agricultural area was studied, while Gaphago, Leokaneng, Kanana and Mohlajeng villages were studied for rural household groundwater use. In WMA2 tomato irrigation in the Mooketsi agricultural area was studied, while Lemondokop, Sereni and Hamashamba villages were studied for rural household groundwater use. Scoping field trips to the study area as well as secondary data revealed that groundwater was the dominant water source in all these selected study epicentres. In the Polokwane agricultural area, the farms typically relied on numerous boreholes. In the Mooketsi commercial farming area, groundwater was the dominant water source for most years, except when flush floods replenished farm dams. When flush floods occurred, farmers partially substituted surface water for groundwater because of economic reasons. This study determined the economic value of groundwater in two use sectors. First, determining the utility value of groundwater in selected rural households using the contingent valuation method. Utility value was defined by Dupuit (1844) and Marshall (1879) as the maximum sacrifice expressed in money terms which each consumer would be willing to make in order to acquire an object. Open-ended questions were used to determine willingness to pay during contingent household groundwater valuation. The overall mean willingness to pay for satisfactory household groundwater for the study area was R2.28 per kilolitre of groundwater.

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