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Stakeholders in agriculture and water related issues have different perceptions about the productivity of water. This is evident by the different definitions of productivity of water, though most of the definitions hinge around the benefits accrued from water use. The viewpoint of smallholder farmers? regarding the productivity of water is important in order to promote the concept of productivity of water in a country like Tanzania. This is because 95 percent of the farmers are smallholders. This paper presents the farmers? understanding of the productivity of water in the Mkoji sub-catchment (MSC) in the Ruaha River Basin in Tanzania. It also presents their practices aimed at increasing the productivity of water in the area. It reveals that the concept of productivity of water has been part of the smallholder farmers in Mkoji. The farmers? concept of productivity of water is the same as that of other stakeholders, only that it is less formal than as expected by experts. Farmers in the sub-catchment judge productivity of water based on the amount of rainfall and its influence of their yields. Productivity of water is high or low if the average seasonal rainfall is ?good? or ?bad?. They put so much value to water that they go to the extent where they are willing to pay more to acquire a piece of land close to a water source. Furthermore, there is evidence that they engage in fights and ?steal? water as a result of the high value they place on water. The farmers have adopted tillage methods, agronomic practices and crop diversification approaches to maximize yield from available water. The paper concludes that these strategies adopted by farmers could be a good starting point for formulating measures to improving productivity of water in the area. Therefore, there is a strong need for an in-depth understanding of farmers? practices to determine the most effective, economical and sustainable options in increasing productivity of water, and to thereby formulate approaches for adaptation, uptake and upscaling. This paper explores farmers? perceptions of productivity of water, practices and coping mechanisms for achieving greater water productivity. The perceptions are generated based on farmers? understanding of water productivity, the value they place on land and water, and the struggle and conflicts resulting from the value they put on water. Furthermore, the paper presents farmers? strategies to estimate productivity of water, and discusses the impact of the farmers? practices, coping strategies and limitations associated with the practices. It was concluded from this paper that the theories and figures of productivity of water are less important to farmers, than their approaches to enhance their ability to effectively utilize water and to maximize production.