Deregulation, Trade Reform and Innovation in the South African Agriculture Sector

This paper is one of five case studies which is a part of a larger project looking at the various effects that trade and investment can have on innovation. This paper studies the effect of deregulation and trade reform on South Africa's agriculture sector. South Africa's agriculture sector is highly dualistic consisting of a developed commercial sector and a subsistence farming sector. Deregulation and trade reform has led to substantial changes in innovation in the commercial agriculture sector such as wine and fruit, leading to a large change in composition while innovation seems to have been more limited in subsistence agriculture which lacks absorption capacity. Legal uncertainties related to land reform may also be one factor which can negatively affect innovation in the commercial farming sector.