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This study has been carried out in one irrigation scheme of the Eastern Cape Province, South Africa. The study assessed the economic performance of a smallholder irrigation scheme (Zanyokwe Irrigation Scheme). The study took place in a former homeland area (Ciskei). This region is submitted to a semi-arid and relatively mild climate. The infrastructures were built during the apartheid era, in order to provide employment and food to the local black population. Currently, the farmers crop from 1 to 10 hectares, producing vegetables and maize with low productivity. The government has engaged in a revitalization process, aimed at upgrading infrastructures and establishing new local organisations. Its objectives are to curtail the financial burden of operation and maintenance costs and withdraw from any direct farming activities and management of the schemes. The process includes the rehabilitation of infrastructure and establishment of Water User's Associations, which are to take over ownership and collective management of the scheme. In such context the aims of the research were: (i) To evaluate the diversity of livelihoods and the contribution of farming; (ii) To estimate productivity of land and water; (iii) To identify factors influencing production at farm level; (iv) To examine the role of land tenure onto productivity.