Incorporating Agricultural Land into Land Use Consolidation Program Improves Household Wealth Accumulation in Rwanda
Economic Policy Research Network – www.eprnrwanda.org
Highlights
* The effect of the Land Use Consolidation (LUC) Policy on Household Wealth Accumulation in Rwanda is analysed.
* A slight change in determinants of adoption of the LUC program causes significant changes in household wealth.
* Adopting the LUC program significantly increases households’ probability of shifting from lower to higher wealth.
Executive Summary
It has long been recognised that agriculture is a source of livelihood and the engine of economic growth in developing countries. However, the effect of land fragmentation and small-scale agricultural holdings has been a significant challenge to increasing agricultural productivity in those countries. Rwanda has implemented the LUC Policy since 2008 to overcome the negative effects of land fragmentation on livelihoods. However, little is known about the effect of LUC
on household wealth accumulation. This policy brief investigates how incorporating agricultural land into the LUC program affects household wealth accumulation. It shows that Rwandan households that incorporated their lands into the LUC program are wealthier than their counterparts that did not incorporate their land into the LUC program. This Policy brief suggests that bridging the wealth gap among households requires policymakers and development practitioners to develop mechanisms, such as increased access to higher-value markets and subsidised agricultural credit, to incentivise households to incorporate their agricultural land into LUC.
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