Deregulation Trade Reform and Innovation in the South African Agriculture Sector This case study examines the effect of deregulation and trade reform on South Africa’s agriculture sector which 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 a factor which can negatively affect innovation in the commercial farming sector. Keywords: innovation deregulation trade reform South Africa agriculture wine fruit field crops foreign investment absorption capacity.