Economic Assessment of Sustainable Water Supply Solutions for Cape Metro and Surrounding Agricultural Regions: An Intersectoral Approach | Western Cape Government

Economic Assessment of Sustainable Water Supply Solutions for Cape Metro and Surrounding Agricultural Regions: An Intersectoral Approach


This project aims to determine the impact of introducing water restrictions in the agricultural sector on the economy of the Western Cape.

Start: 2003
End: 2004

Cape metro and surrounding irrigated agricultural regions are under constant threat of water shortages.


A close link exists between the rural economies and the urban economy through forward and backward linkages. It is not possible to make objective water management decisions by considering the different economic sectors in isolation.

A holistic integrated analytical framework to analyse the economic impact of water management decisions, such as the introduction of water restrictions, implementation of water augmentation schemes, and the implementation of alternative water demand management measures is necessary.

A need has been identified to quantify these links and to test the impact of several water management scenarios. The Department of Agriculture: Western Cape has been contracted to specifically analyse the impact of water restrictions on the Western Cape.

Water shortages are a looming threat in the Western Cape, particularly in the Berg and Breede River catchments and the Cape Town metropolitan area. These shortages are likely to increase in future and unless ameliorative actions are undertaken, water restrictions will be the rule rather than the exception. A ten percent restriction on all water sources in the larger Cape Town area was instituted by the Department of Water Affairs and Forestry (DWAF) on 1 November 2000 as a result of poor winter rains in 2000 and the immediately preceding years. Even with normal rainfall, restrictions are likely to be implemented more frequently in future due to the rapid growth in water demands (particularly urban water demand) in the context of finite fresh water resource availability.

With the high costs of development limiting the expansion of water supply, the rapidly growing household and industrial demand for water will need to be increasingly met from water savings from agriculture. It will be a particular difficult challenge to improve the efficiency of agricultural water use to maintain crop yields and output growth while at the same time allowing reallocation of water from agriculture to rapidly growing urban and industrial uses.

However, agriculture plays a major role in the economy of the Western Cape. The agricultural sector contributes nearly 13 percent of the total formal sector jobs in the Western Cape. Horticultural enterprises dominate agriculture's contribution to provincial value added, employment, and employee remuneration. In descending order, viticulture, deciduous fruit, field scale vegetables and table grapes lead in this regard. All of these crops dominate in agricultural activities in the irrigation regions surrounding Cape Metro.

For more information, contact:

Wilna Malan
Tel: 021 808 5201



Sponsored By: Owner: (Provincial Cabinet, Western Cape Government)
The content on this page was last updated on 22 May 2019