Published Article / Increased diversity in the agricultural sector in South Africa is forcing farmers to focus on the production of value-added commodities in the face of mounting global competitive pressures. However, many farmers, by operating individually, are unable to expand operations to the scale necessary to become involved in value-adding processing. This requires too much capital, skills, and time. By pooling resources and forming integrated small and medium sized agricultural enterprises even small producers can enter the processing arena successfully. This paper focuses on the specific driving forces, pitfalls and strategies that agricultural SMEs need to pursue in order to survive.