Thamnochortus insignis (Albertinia thatching reed) is a restio specie which is endemic in the narrow (20 km wide) coastal dune veld, from the Gouritz River in the east to the Breede River in the west (120 km). The area within this belt, where this reed is the dominant restio, covers 65 500 hectares. The culms of the reed is harvested as a natural product from the veld and used as thatch on roofs of houses. The traditional use has been as roofing material in Cape Dutch architecture. At this time, thatch roofs are regarded as a luxury commodity and are used in prestigious residential areas and also eco-friendly housing developments. The first section of the research project was based on a Delphi technique questionnaire completed first by 37 and secondly by 10 stakeholders in the industry. This group of growers, contract harvesters, crop agents and thatchers represented 80 percent percent of the estimated 2005 harvest and 87 percent of the estimated farm gate crop value. The thatching reed industry is the main agricultural enterprise situated in the coastal dune veld of the Southern Cape, i.e. 55 percent of total Gross Product Value generated by the survey respondents. The second section is based on an analysis of experimental harvest plots (50 m2), selected at random (4 replications per site) in the 2 x 3 different production systems, i.e. traditional harvest from natural veld, harvest from veld which had been subjected to mechanical injury ("sleep") and harvest from established orchard-type lands. Harvest data was collected at each site in terms of the following components, i.e. number of harvestable tussocks, circumference of tussocks and number of reed bundles (minimum circumference 210 mm, minimum length 1,2 m). The gross income per site was calculated on the basis of R1,80 per bundle (2006-price level). Economic analysis (Gross Margin above selected costs) indicates that plant density (reed tussocks/ha) is a critical factor, in order to offset the establishment cost of R2 100/ha in established lands, which is not incurred in the other two production systems. Economic returns from the first planted lands (2 100 and 2 900 plants/ha) averaged R7 666/ha against R8 781/ha for the mechanical-injury plants. However, at a density of 5 000 plants/ha, the projected Gross Margin increases to R15 765/ha. The use of mechanicalinjury and natural vegetation production systems both interfere with biodiversity and raise major concerns with regard to sustainability of the sensitive coastal dune fynbos. ANOVA-analysis of the data indicates a highly significant difference (p = 0,01) for all sites and production systems. Statistical analysis of averages indicates that mechanical injury treatment results in a significant increase in the number of tussocks, when compared to established and natural veld, respectively. The variance in the circumference of tussocks was greatest in natural veld (55 to 71 percent) and mechanical injury (54 to 61 percent). Tussocks harvested from established plantings reflected the least level of variance (28 to 38 percent). The larger reed tussocks in the established lands produced more bundles of marketable reed (8 200/ha) than the mechanical-injury (7 625/ha) and natural veld (3 450/ha) respectively. Establishment of T. insignis plantlets in an "orchard" system at spacings of 2 m x 1 m on previous winter cereal lands or old pastures, is shown to meet all the requirements within a sustainable production system, i.e. viability, productivity, environmental-friendly, risk management and social acceptance. Furthermore, the quality of the yield was in line with the proposed grading standard for thatching reed, i.e. minimum circumference 210 mm, minimum length 1,2 m and less than 6,5 percent grey culm content.