December 2010 article: “Valuing Improvements in The Water Rights System in South Africa: A Contingent Ranking Approach,” by Stijn Speelman, Stefano Farolfi, Aymen Frija, and Guido Van Huylenbroeck.
This study carried out a contingent ranking experiment to study how smallholder irrigators in South Africa would value potential changes in water rights. It is based on detailed information regarding irrigation activities, income sources, and institutional aspects of water management.
The study demonstrates that contingent ranking is a promising tool to measure the effect of improving water rights along different dimensions. Although this sector of smallholder irrigators in South Africa is considered important for poverty reduction in rural areas, it clearly struggles with problems of low water use efficiency and insufficient cost recovery. Taking into account this context, it is highly relevant to evaluate the expected impact of water right reforms on this specific stakeholder. Overall, the estimations of the willingness to pay (WTP) indicate that farmers experience significant inefficiencies in the current water rights system, with significant economic gains attached to the improvement of the water rights. Tackling these inefficiencies will not only be favorable for the efficiency of water use of smallholder irrigators, but given the size of the benefits, it can also add significantly to the government objective of cost recovery. With a higher WTP for water, there is more room for government to increase water prices and reach a higher level of cost recovery.
Policy makers can clearly use such results to guide water right reforms. Besides the information on the economic gains, it gives them direct information concerning the priorities of a target group. This knowledge can help government to increase support for the interventions.
[Please note: I have quoted and paraphrased freely from the article, but the interpretation is my own!]
