Submitted in fulfilment of the requirements of the degree of Master of Technology: Governance and Economic Development, Durban University of Technology, Durban, South Africa. 2015. / South African rural areas are amongst the poorest in the world, as there is still a wide gap in terms of development with their urban neighbours. With an estimated 6.4 million South Africans falling below the national poverty line in 2010, KwaZulu-Natal (KZN) remains the province with the highest number of poor people. The majority of rural dwellers in South Africa and KZN rely on subsistence farming, while others depend on government grants or family members living and working in urban areas to sustain a living. However, the income received is often insufficient to cater for their daily needs. In consonance with the high prevalence of poverty and the stagnation of subsistence farming, this study aims to examine the role of water supply in rural agricultural development in the Ward 19 area of Mtubatuba Municipality, which is situated along the north eastern region of KZN. To accomplish this aim, a mixed research approach with elements of qualitative (interviews) and quantitative (questionnaire) research techniques was used to obtain relevant information. A total of 50 participants took part in this study, all of whom were subsistence farmers in Ward 19 of Mtubatuba Municipality in KwaZulu-Natal. Furthermore, interviews were conducted with three senior officials from the regional office of the Department of Water Affairs in Durban; three staff members from the Mtubatuba Municipality; two individuals from Ward 19; two senior staff members from the Department of Agriculture, Environmental Affairs and Rural Development in Mtubatuba; as well as two senior staff members from Umkanyakude water services provider in Mtubatuba. The study revealed that water shortages have adversely undermined the development and growth of subsistence farming in this poor community. Furthermore, the difficulties experienced by the marginalised people of Ward 19 are typical of many rural areas which have not fully benefitted from transformation in a post-apartheid South Africa. In order to address the defunct subsistence iii farming in this community, the study proposed a well-tailored and effective water resource management approach with the intention of transforming subsistence farming into commercial farming, thus improving the standard of living and reducing poverty to a reasonable level. Furthermore, in recognition that the area under study is dominated by women, the study emphasised the imperativeness of empowering the women of the community as a strategy underpinning rural development.

Irrigation farmers in the Lower Orange (Kakamas and Boegoeberg) and Lower Crocodile rivers (between Nelspruit and Komatipoort) areas in South Africa were surveyed during October 2003 in order to study whether water marketing has promoted efficiency in water use. This study is a follow-up on research undertaken by Armitage (1999) in the Lower Orange River area and Bate et al. (1999) in the Lower Crocodile River area. Factors associated with future investment in irrigation farming were also studied in the Lower Orange River Irrigation Scheme. Econometric procedures used included principal component analysis, and logit and ridge regression. Results from the two areas will be discussed separately. Econometric results for the Lower Orange River farmers indicate that purchasers of water rights produce lucrative export grapes and horticultural crops with relatively less raisin, wine or juice grapes and less field crops; are more specialised in production (table grapes); have more livestock (probably liquidity factor) and have a less negative view of the five-year water license review period. The water market has facilitated a transfer of water use from relatively lower value crops to relatively higher value crops, and also promoted the use of more advanced irrigation technology. An investment model using Ridge Regression indicates that the following variables are associated with increased future investment in irrigation farming; higher expected profitability and lower levels of risk perception and risk aversion (Arrow/Pratt). Results confirm that farmers who are more risk averse are likely to invest less in the future as can be expected from theory. Policies that increase risk in agriculture will have a significant negative effect on future investment in irrigation. What is significant from the results is that irrigation farmers in the Lower Orange River area are highly risk averse (down-side). Results also show that farmers who feel that water licenses are not secure expect to invest less in the future. The latter effect is thus amplified, as farmers appear to be highly risk averse. This has important policy implications, and measures should be taken to improve the perceived security of water licenses. This could be achieved by keeping farmers more informed about the practical implications of the New Water Act (NWA) (Act 36 of1998) and, specifically, water licenses. In the Lower Crocodile River area, almost all the water trades (permanent and rentals) observed in this study were from farmers above the gorge to farmers below the gorge. It is concluded that in the transfer of water some attributes in the purchasing area such as lower production risk (sugar cane) and lower financial risk and better cash flow (bananas and sugar cane) were more important than the expected income per cubic meter of water. Water supply in this area is highly irregular, while sampled farmers were again found to be extremely risk averse especially as far as down-side risk is concerned. The average water price in this area in recent years (2002 to 2003) was between R2000 and R3000 per ha (l ha = 8000 cubic meters). Buyers have large farms and are progressive farmers that purchase (and rent) from many sellers (or lessors). It is concluded that information on water transfers (sale prices and rents) is asymmetrical. Few permanent transfers have taken place in the Crocodile River in recent years. It is concluded that there are reasons why transfers at present are not processed, such as excess demand for water (due to the irregular flow of the Crocodile River, and role players should discuss these reasons and possible solutions before further action is taken. / Thesis (M.Sc.Agric.)- University of KwaZulu-Natal, Pietermaritzburg, 2004.