The impact of social grants on agricultural entrepreneurship among rural households in KwaZulu-Natal, South Africa

This chapter investigates the conceptual and empirical linkages between social grants and agricultural entrepreneurship among rural households in the KwaZulu-Natal province of South Africa. Understanding the theoretical and empirical relationship between social transfers and smallholder entrepreneurship can enable policy makers to improve the design of rural development policy interventions and create synergies between cash transfers and poverty reduction by promoting enhanced agricultural productivity and production. This study performed continuous treatment analyses to understand the impact of the level of dependency on grants on agricultural entrepreneurship. Agricultural entrepreneurship was proxied by entrepreneurial competencies, investment in farm inputs, and income generated from farm activities. Additionally, household labor supplied to farming activities was used to capture the level of households' commitment to farming. Dependency on social grants was defined in terms of the relative contribution of social grant income to household income.