In South Africa the racial and agricultural policies aimed at national food self-sufficiency created an agricultural structure dominated by large, mechanised farms that are owned and operated by a small number of individuals or companies. New agricultural policy should therefore focus more on peasant farming in the subsistence sector in order to promote the development of sustainable small-scale farming units. The liberalisation of agricultural markets resulted in a fundamental change of political and economic framework conditions for the commercial agricultural sector. Failure to adapt has led to significant inefficiency and financial problems in commercial agriculture. This thesis initially focuses on the general question of the efficient organisational form of agriculture. With reference to the German agricultural structure, family farming will be identified as a superior organisational form and the utility optimal factor allocation of this organisational form is explained with the aid of the agricultural household theory. South Africa's agricultural structure is marked by extreme dualism, which was caused by political intervention in the labour and capital markets. The current liberal agricultural policy framework makes commercial agriculture in particular seem inefficient and gives reason to question the current organisational form of South African agriculture. Besides the basic socio-political objectives, the growth objective is one of the most important factors in the development of subsistence agriculture. The contribution of agriculture is not restricted to food production. In fact, the factor contribution is important in achieving economic growth, especially in developing countries. Future developments in the South African agricultural sector will be strongly influenced by the international market. In this respect South Africa, Germany and many other Western industrialised countries are undergoing a similar transformation process that corresponds with the spatial agricultural land use in location theory. Location rent implies differing costs for the use of land, and this is the case for the development of different agricultural systems depending on their distance from the market. The family farming model can be considered as having failed in the South African economy, except in some niche markets. The number of family farms is in fact growing, but there is also a tendency towards more large-scale industrialised agricultural units. The subsistence sector will remain dominated by family farming in the future, although the agricultural household represents a kind of survival institution in these areas. Despite all problems in the subsistence sector, there is no alternative to family farming, and development of subsistence farming is only foreseeable within the framework of family farming. Subsistence farming as a social security system could, however, decline in importance in the future.