Agricultural Development
Senior 6 · Economics
Agricultural Development
Lesson 1 of 4
25 min
In 2025 agriculture produced 20% of Rwanda's GDP (NISR, GDP National Accounts 2025). In the same year it employed 39.1% of all employed people (NISR, Labour Force Survey Annual Report 2025, section 4.5). Even that understates farming's weight, because the survey does not count people who grow food only for their own household as "employed". The fifth Strategic Plan for Agriculture Transformation counts 3.5 million farmers, of whom 1.78 million live mainly from subsistence farming (MINAGRI, PSTA 5, p. 8).
Think: if two in every five workers produce one fifth of the output, how does output per worker in farming compare with the rest of the economy? What would happen to Rwanda's income per head if farm workers became as productive as the average worker?
Definition
Agricultural development: a sustained rise in the output, productivity and incomes of the farming sector, together with better nutrition, more secure livelihoods and more sustainable use of land and water. It changes how farming is done (technology, organisation, markets), not only how much is grown.
Definition
Agricultural productivity: output per unit of input. Land productivity (yield) is output per hectare, in tonnes per hectare (t/ha); labour productivity is output per worker.
Subsistence farming: farming mainly to feed the farmer's own household, with little sold. Commercial farming: farming mainly for sale, for profit.
Food security: "Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life" (World Food Summit, FAO, 1996).
Worked example 1: how productive is a farm worker?
Use the 2025 figures: agriculture's share of GDP is 20% and its share of employment is 39.1%. The relative labour productivity of a sector is its share of output divided by its share of employment (1 means average).
On these figures a farm worker produces about half as much as the average worker and about two fifths as much as a worker outside farming. Because subsistence farmers are left out of the employment count, the true gap is even wider. Raising farm productivity, or moving workers into more productive jobs, is therefore one of the biggest sources of growth available to Rwanda. (The "rest of the economy" here includes net taxes on products, so treat the result as approximate.)
Bruce Johnston and John Mellor ("The Role of Agriculture in Economic Development", American Economic Review, 1961) argued that farming contributes in these five ways, and that it can do so only if its own productivity rises. If farms stagnate, food prices and wages in towns rise, raw materials are short and the market for industry stays small.
| Feature | Evidence | Source |
|---|---|---|
| Very small, fragmented holdings | Average landholding 0.45 ha; half of agricultural households own less than 0.2 ha | PSTA 5, p. 8 |
| Mainly rain-fed | Only 14.4% of farmers irrigated (60.3% of large-scale farmers) | NISR, SAS Season A 2026 |
| Little mechanisation | 1.7% of farmers used any mechanical equipment | NISR, SAS Season A 2026 |
| Limited use of modern inputs | 37.0% of farmers used improved seeds; 67.2% used inorganic fertiliser | NISR, SAS Season A 2026 |
| Hillside farming and erosion | 92.4% of farmers protected their land against erosion | NISR, SAS Season A 2026 |
| Mixed cropping | 61.6% of cultivated area grew two or more crops together | NISR, SAS Season A 2026 |
| Much output eaten at home | About 52% of climbing beans and 44% of maize went to own consumption | NISR, SAS Season A 2026, Table 16 |
| Low yields | Maize 2.0 t/ha; beans 0.7 t/ha | NISR, SAS Season A 2026 |
Farming is also highly seasonal, which leaves many farm workers underemployed for part of the year:
Warning
A falling share is not a falling sector. Agriculture's share of GDP falls as a country develops, even when farm output is rising, because industry and services grow faster. Don't write "agriculture is declining in Rwanda" because its share fell; look at its real growth (7% in 2025, according to NISR) and at its yields.
| Advantages | Disadvantages and risks |
|---|---|
| More and cheaper food, better nutrition, less stunting | Mechanisation can displace farm labour faster than other jobs appear |
| Higher rural incomes and less poverty | Heavy fertiliser and pesticide use can pollute soils and water |
| Raw materials and a market for local industry | Commercial farming can widen gaps between larger and smaller farmers |
| Export earnings and less spending on food imports | Specialising in a few crops increases exposure to price falls and disease |
| Releases labour and savings for industry and services | Bumper harvests can push prices down and cut farm incomes (lesson 3) |
| Reduced rural–urban migration pressure | Imported inputs and machinery cost foreign exchange |
Worked example
Worked example 2: the food self-sufficiency ratio (illustrative figures)
The self-sufficiency ratio is home production as a percentage of home consumption. A country produces 490,000 tonnes of maize a year and consumes 600,000 tonnes. Find the ratio and the imports needed if there is no change in stocks.
PSTA 5 sets a target for Rwanda's overall food self-sufficiency ratio to rise from 79.6% in 2022 to 100% in 2028–29 (PSTA 5, p. 20).
Tip
Learn Johnston and Mellor as "FLRSE + M". Agriculture supplies Food, Labour, Raw materials, Savings and Export earnings, and provides a Market for industry. Each one is a reason why agricultural development must come early, not late.
Important
Discuss. Half of Rwanda's agricultural households own less than 0.2 ha. Can such small farms ever give their owners a good living, however productive they become? What does your answer imply for jobs outside farming?
Practice
Sources and credits
Written by Ganzaa: the text, the two diagrams, the tables, the worked examples and the practice items. The figures in worked example 2 and the practice items are illustrative.
