PhD Thesis 2019The Irrigation Management Transfer reforms across the world have been focusing on gradual shift from government toward farmers. The motive behind these reforms is to increase efficiency, financial sustainability, and reduce public financial burden while making farmers responsible for financing Operations and Maintenance (O&M) costs. The Willingness to Pay (WTP) for O&M costs is important for sustainability of improved smallholder irrigation schemes. Unfortunately, since the beginning of the implementation of IMT reforms in Tanzania, none has conducted a study to assess farmers‘ WTP for O&M costs. This study was therefore conducted in Mbeya urban and Mbarali districts to assess farmers‘ WTP for O&M costs and to assess profitability and challenges facing farmers in improved smallholder irrigation schemes. Primary data were collected from 301 randomly selected farmers from four improved irrigation schemes. Results show that farmers were willing to pay on average 45 000 TAS per acre per year. Further, the logistic regression results show that, the determinants of WTP were education level, sex of household head, awareness and perception on IMT reforms. In addition, access to credit, extension services and crop income influenced WTP positively and significantly. Thus, intervention made with a focus on the determinants of WTP will enhance the sustainability of irrigation schemes through farmers‘ payments. Moreover, gross margin results indicated that farmers were practicing profitable farming with a gross margin averaged at 812 126 TAS per acre while the highest and the lowest margin was 1 827 095 TAS and 273 143 TAS for onions and maize respectively. Accessibility of agricultural extension services, marketing, post-harvest handling and management of the schemes were challenges facing farmers. The study recommended that, continued sensitization on the rationale of IMT reforms, encouraging farmers to produce ―more profitable crops‖ such as onions and tomatoes, provision of agricultural extension and credit services, and enforcement of a by-law mandating farmers to become members of irrigator associations are important matters to be addressed. Lastly, marketing related challenges, including poorly organized agricultural marketing, use of unstandardized weighing scales, poor post-harvest handling especially for onions, need to be addressed through collaborative efforts of both government and farmers.