The full financial costs of irrigation services: A discussion on existing guidelines and implications for smallholder irrigation in South Africa

Abstract

Considering water as an economic good entails, among other requisites, properly assessing the cost incurred by supplying and managing the resource, and the required infrastructure thereof. Regarding irrigation, the International Commission for Irrigation and Drainage (ICID) set up a method for assessing the full financial costs, in the form of guidelines. This paper investigates the applicability of these guidelines in smallholder irrigation conditions in developing countries. The paper first presents the specific conditions and features of such a sector, with emphasis on South African examples. Several specific issues are identified and discussed, such as the lack of records on infrastructure and initial costs, the multiple purpose and actual uses of certain equipment and infrastructure, the shift in purpose of others over time, the inclusion of certain small, yet indispensable equipment in the calculation, the partial refurbishment works on particular assets, and the lack of a standard basis for calculation under tropical, developing conditions (e.g.

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