Using value chain methods to understand the status of resource allocation in the Mhlatuze catchment. Inductive qualitative research investigated the acceptance of water trading as an allocation mechanism that could improve empowerment in the context of resource sharing.
I NTRODUCTION
The potential effects of water trading as a distribution mechanism can then be demonstrated by: More than half of the major catchments in South Africa are over-tuned in terms of water resources, particularly catchments that have concentrations of industry and agricultural activity.
R ESEARCH P ROBLEM
Armitage et al and also encourage water management to be carried out at all levels of the value chain, thereby increasing potential holistic empowerment throughout the water resource sector. The trading of rights, thereby increasing the efficiency of water use without utilizing additional resources (Armitage et al., 1999), can be seen by the stakeholders as one way to achieve empowerment.
R ESEARCH A IM
6 in a Development Cube Model, and elements of these dimensions can be used in analyzing the effectiveness of the allocation mechanism. The lessons learned from the case study can be used to guide the process in other similar catchments in South Africa.
R ESEARCH O BJECTIVES
M ETHODS
Inductive qualitative research aimed to generate knowledge (Patton, 2002) about the status of resource sharing in the case study area. The selection of the Mhlatuze catchment case study area is explained in the next section.
C ASE STUDY AREA : M HLATUZE C ATCHMENT
The Mhlatuze water system is relatively simple and mainly relies on the Goudetrouw Dam for water storage and the Mhlatuze and Mfuli Rivers for surface water sources. The Mhlatuze catchment is one of the first in South Africa to introduce a compulsory licensing process, so stakeholders already have some familiarity with the system.
S EQUENCE OF C HAPTERS
The methodology in Chapter 3 describes the process used to formulate and analyze the value chain. The presentation and discussion of the results of the value chain analysis are presented in Chapter 4.
P OLICY C ONTEXT : W ATER A LLOCATION R EFORM IN S OUTH A FRICA
A LLOCATION M ECHANISMS
Compulsory Licensing
The Water Trading Mechanism
These are discrepancies which arise in the value of a resource due to the difference between the resource's "private cost" and "social cost" (Lipsey, 1983;468). This is partly due to the potential failure of the market mechanism as described above.
Advantages of Water Trading
Versfeld seems to focus his views on the ongoing water trade (see Types of Trade later in this chapter). Initially, water resource allocation should include a complete audit of water resources in the WMA and current allocation patterns within each area.
T YPES OF W ATER T RADING
The use of water trading as an economic tool to achieve efficiency in water use would have more flexibility to operate within the dynamic environment of water resources. This allows rights holders to base their water use decisions on "the full opportunity cost of their water use" (Armitage thus promotes the economic efficiency of water use.
P RINCIPLES OF W ATER R ESOURCE S HARING
Processes of Governance of Water Resources
These interactions highlight the importance of participatory governance of the water sector to achieve the goals of efficiency, equity and ecological integrity in water management. The socio-economic process of improving resource sharing involves increasing the capacity of stakeholders to participate in integrated water management at the societal level.
Importance of Principles of Allocation - Trialogue Interfaces
Equity is the interface between increasing stakeholder capacity and managing relationships between stakeholders. It is in this way that the integrity of the ecology is a relevant interface between increasing the capacity of the stakeholders and managing the demand for water resources.
R EQUIRED O UTCOMES OF W ATER R ESOURCE S HARING
- The value of water resources
- Economic Efficiency
- Equity and Empowerment
- Ecological Integrity and Sustainability
- Areas of Empowerment
The next section presents discussion of the value of water resources against a background of policy initiatives and in the context of creating meaningful benefits through empowerment. Allocation of water resources among stakeholders should then encourage resource sharing through increased participation in management of the resource.
V ALUE C HAINS AND S ECTOR M APS : SUITABILITY AS AN ANALYTICAL TOOL FOR QUALITATIVE RESEARCH
- Introduction
- Definitions
- Key Concepts for Value Chain Analysis
- Opportunities for Increasing Empowerment in Value Chains
- Identifying Income Distribution in Value Chains
- Summary; The Suitability of Value Chain Analysis in Investigating Resource Allocation
Value chain analysis can help identify the “nature of entry barriers in each of the links. The results of the research can then be used to conclude where the best opportunities for participants lie in the value chain as a whole.
I NTRODUCTION
R ESEARCH D ESIGN
Value Chain Analysis in the Water Sector
The value chain can be analyzed by doing a detailed intensive sectoral analysis, or analysis based on "participatory principles" (Roduner. 41 The research is designed to identify the existing actors, the level of interaction between the actors and the means of creating benefits within the chain of the specified value of the water sector (M4P, 2009).
T HE C ASE S TUDY A REA
- Equity of Resource Access and Population Distribution in Mhlatuze
- Access to Land
- Access to Water Resources
- Income Distribution
The distribution of population settlement patterns and existing infrastructure in the Mhlatuze sub-region can be seen in Appendix 2 (Letty, 2005). The average unemployment rate among the rural population of the Mhlatuze catchment is over 53% TRADITIONAL.
R ESEARCH M ETHODS
Introduction
The revenue distribution can be calculated at each level of the value chain to indicate potential for generating revenue streams. What is the system for coordinating water allocation and consumption in the value chain.
Mapping the Water Sector
53 A basic tool for mapping core processes in the set of value chains selected in the water sector is shown in Figure 4. Once the core processes in the various value chains have been mapped, the next step is to identify the people or entities involved. in the value chain (Figure 5).
A NALYSIS OF THE W ATER R ESOURCE V ALUE C HAIN
- Analysis of Governance
- Linkages within the Water Sector
- Identification of Power Distribution within the Water Sector
- Discussion of Resource Sharing and Potential of Water Trading to Increase Empowerment
The identification of relations and connections allows a determination of the current distribution in the sector. The level of objective empowerment that exists in the water sector is determined by the overall governance of the sector.
S UMMARY OF P ROPOSED M ETHODS
The indicator for subjective empowerment is qualitative in nature and is provided through the participation of interested parties in the value chain prioritization exercise. What are the product, information and knowledge flows in the value chain and how do poor communities access and use them.
I NTRODUCTION
M APPING THE W ATER S ECTOR
Prioritising the Value Chain
This was followed by the identification of key processes in a set of value chains, the actors involved and the activities they perform within the value chain. The first step in designing value chains for the water sector is to define the key processes in the selected value chains.
Core Processes in the Selected Value Chains
The prioritization has shown that, within the current governance of the water sector, stakeholders have a collective view that they can best create a flow of benefits and take advantage of empowerment opportunities through participation in the agricultural and environmental value chains. As this research focuses more on the empowerment aspects of resource sharing within the water sector, these processes remain a generic representation of the water sector value chain, and form the revenue frontier.
Identifying the Main Actors in the Value Chain Processes
Mapping the Selected Value Chains within the Water Sector
First, value chains within the sector were identified and ranked according to the priority criteria set by the survey participants. These were used to identify which value chains have the greatest potential in the context of the empowerment discourse.
Status of Water Resource Sharing in the Mhlatuze Catchment: Description of the Sector Map
In the case of the poor rural areas, access to water resources and participation in the sector is limited to. These value chains are mainly found in the upstream and midstream parts of the Mhlatuze catchment.
Summary of Results for Objective 1: The Status of Resource Sharing in the Mhlatuze Catchment
Currently, the main actors in this value chain are existing commercial operators who, because of their more advanced skills, realize more benefits from use than the rural actors. The tourism-based licenses are non-tradable and therefore the benefits realized by actors in this value chain are limited to the actual actors themselves.
A NALYSIS AND D ISCUSSION OF THE R ESULTS OF THE S ECTOR M APPING E XERCISE FOR THE W ATER S ECTOR IN THE C ONTEXT OF
Analysis of Governance
Analysis of the official and informal governance structures will clarify the level of participation and interaction between poor rural areas present in the selected value chains. The derived demand for water as an input to the priority agricultural sector is illustrated qualitatively in the following flow diagram (Figure 9).
Linkages within the Water Sector
The perceived extent of relationships is shown in Table 12, scored from 0 (no respondents indicated a relationship) to 5 (all respondents indicated a relationship) and used in the survey instrument. This is discussed further in the following sections that discuss the participation of rural communities in water resource sharing in the context of empowerment.
Identification of Power Distribution in the Water Sector
In this study, the actors have been grouped due to a lack of time to interview all actors in the value chain. However, the concentration of the key assets in the agricultural value chain lies with commercial farmers in the Mhlatuze River basin.
D ISCUSSION OF R ESOURCE S HARING AND P OTENTIAL OF W ATER T RADING TO E NHANCE E MPOWERMENT
- Resource Empowerment
- Empowerment through Increasing Competence
- Objective Empowerment
- Subjective Empowerment
- Summary
In the context of objective empowerment (regarding responsibility and opportunities), the appropriate quantitative indicator used is the distribution of income along selected value chains, as this provides a starting point for determining income-generating opportunities for the target group of participants (M4P, accessed 2008). Cook is determined within the current governance structure of the water sector in the Mhlatuze catchment.
I NTRODUCTION
Objective 1: Using Value Chain Methods to Understand the Status of Resource Sharing in the Mhlatuze
The value chain identified in the research as most likely to encourage resource sharing through the potential to empower previously disadvantaged rural communities was the agricultural value chain. The nature of the silo mentality of participation in the use of water resources in the Mhlatuze catchment is widespread.
Objective 2: Using a Value Chain Method of Analysis to Identify Constraints to Empowerment of Rural
The current low levels of previously disadvantaged rural participation in the value chain are an indication of low levels of skills, knowledge and attitude to create benefits. Beneficial linkages with other actors in the value chain are scarce, limiting the flow of information and knowledge to previously disadvantaged rural areas needed to upgrade themselves in terms of value-added status.
C ONCLUSION
Summary
Granting water rights to previously disadvantaged individuals has the potential to empower previously disadvantaged rural communities. Enhancing holistic empowerment would result in real benefits for the formerly disadvantaged rural poor in gaining access to and use of the water resources.
Improvement to the Methods Used
Further Research
S UMMARY
Humphrey (2000), “Value chains and upgrading: The impact of British retailers on the fresh fruit and vegetable industry in Africa”, Journal of Development Studies, Vol. Available at URL: http://www.dwaf.gov.za/sfra/SEA/usutu-mhlathuze%20wma/usutumhlathuze_results.asp.
Map of Umhlathuze Municipality showing traditional authorities. (Letty, 2005)
Map of Umhlathuze Municipality showing main rivers, tributaries, lakes and
Map of Mhlatuze Municipality showing land use (Letty, 2005)
Map showing current land cover within Umhlathuze Catchment (Claasen et al, 2005)
Inductive Questionnaire used in Interviews and Discussion
