Insights into the Impact of Irrigation Agriculture on the Economy of the Limpopo Province, South Africa: A Social Accounting Matrix Multiplier Analysis

Ramigo Pfunzo, Yonas T. Bahta () and Henry Jordaan
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Ramigo Pfunzo: Department of Agricultural Economics, University of the Free State, Bloemfontein 9300, South Africa
Yonas T. Bahta: Department of Agricultural Economics, University of the Free State, Bloemfontein 9300, South Africa
Henry Jordaan: Department of Agricultural Economics, University of the Free State, Bloemfontein 9300, South Africa

Agriculture, 2024, vol. 14, issue 7, 1-27

Abstract: The development of irrigation systems is strategically used to improve food security and achieve the Sustainable Development Goals (SDGs 2) of ending hunger and poverty. The objective of this research was to evaluate the effect of irrigation agriculture on the economy of the Limpopo Province, South Africa. This study used the 2017 national social accounting matrix (SAM) as a database with detailed information on irrigation and rainfed agricultural activities and land accounts to compute the effect of exogenous shock on output, income, land, and value added using SAM multiplier analysis. The findings showed that output multiplier effects were more significant for rainfed agriculture compared to irrigation agriculture. However, irrigation agriculture had the highest institutional income, land return, and value-added multiplier compared to rainfed agriculture. The type of crop did not influence the findings, with irrigation consuming more input per unit of output. We conclude that investing in irrigation agriculture and increasing the efficiency and sustainability of existing irrigation agriculture in Limpopo is significant and profitable because dry land production is hazardous when there is insufficient rainfall or recurrent drought.

Keywords: food security; land; rainfed; output; value added; income (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2024
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