Thesis (MDF)--Stellenbosch University, 2012. / ENGLISH ABSTRACT: In the 19th century, farming in South Africa included vibrant small scale farms that were market responsive and competitive. Legislation enacted in the early 20th century adversely affected these farmers while supporting the development of large commercial farmers. The extensive government support for the White farmers was seen as a mode of increasing national output as well as creating food self-sufficiency, but at the same time, this decreased food security for the Black population. Major changes in the South African government in 1994 attempted to address these inequalities, amongst other, by supporting small-scale farmers. However, the gap between White and Black producers has been closing very slowly. Small-scale farming faced a wide range of enterprise development challenges. As a response to these challenges, the Government enacted the New Co-operative Act No.14 of 2005 to promote sustainable small business development by introducing the provision of incentives for agricultural co-operatives. This study has sought to determine the challenges and opportunities that are encountered in sustaining enterprise development and has used the Matabane Secondary Agricultural Co-operative (MSAC) as a case study. The goal is to develop strategies which can minimise the challenges and exploit the opportunities that will enable MSAC to realise its ultimate goal of improving livelihoods and reducing poverty. A review of current literature provided the secondary data for the study. The literature indicated the importance of social and physical capital in the sustainability of enterprise development. Social capital, in the context of sustainability of livelihoods, is defined as networks with shared norms, values and understandings that facilitate co-operation within the group. It can also be seen as the ability of the co-operative or group to secure benefits through membership in networks and other social structures (Finkelstein et al., 2007, Porters, 2000). Physical capital refers to any non-human asset made by humans and then used in the production process (Finkelstein et al, 2007, Porters, 2000). Primary data was collected using structured questionnaires delivered to 37 members of the MSAC. Thirty one members responded and were interviewed personally by the researcher. The questions were designed to investigate the challenges and opportunities faced by members and how they relate to social and physical capital. The results were analysed quantitatively using both descriptive and chi-squared statistical analysis. The results reflect the challenges and opportunities for enterprise development as perceived by co-operative members. The analysis explored this in terms of social and physical capital. The predominant challenges described were lack of access to finance and lack of mechanisation. The greatest opportunities seen were related to the bonds, bridges and linkages formed by co-operative members. Based on the assessment of the study, several recommendations were made. The introduction of a Co-operative Development Fund (CDF) would support and strengthen the co-operative financially, addressing both the issues of lack of access to finance and lack of mechanisation. On-site training programmes would enhance the members’ ability to participate in the decision making process of the co-operative and better manage their operations. The study has further shown that a lack of, or limited intra-governmental co-ordination proved to be one of the major challenging factors. It would be advantageous to organise an intergovernmental information service whose purpose would be to co-ordinate activities and pool resources of different agencies in their efforts to achieve common goals.