Institutional innovation and pro-poor agricultural growth: cannabis cultivation in the Eastern Cape province of South Africa as fertile opportunity.

Abstract

South Africa has a high share of its poor population living in rural areas of the country, and especially the former homelands of Transkei and Ciskei, now part of the Eastern Cape. The challenge of mitigating and eventually ending the economic and social marginalisation of the rural poor in South Africa is clear. Agriculture plays a key role here. The sector is labour intensive with a potential for unskilled and semi-skilled job creation. It also has strong linkages to non-farm, rural economic activity. South Africa also has a highly unequal and dualistic economy with a history of support to traditional crops and markets in agriculture. It must innovatively seek to promote certain �emerging� industries that could be managed within a more inclusive and equitable manner. Hayami and Ruttan�s Theory of induced innovation interprets technical as well as institutional change as endogenous to the prevailing economic system (Hayami and Ruttan, 1971, 1984, 1985; Ruttan, 1984). With the global cannabis market opening up, and South Africa�s land locked neighbour Lesotho already having granted a number of licenses for the cultivation and exporting of medical cannabis. The lack of poverty focused social scientific research on the potential of cannabis cultivation to promote inclusive growth compared to the wealth of natural science research on the impacts of cannabis highlights a gap in the literature that should be exploited towards the goals of creating conditions of improved social justice and economic emancipation. JEL Codes: O13; O43; Q17