Publication - Working Paper
The role of agriculture in economic growth and the wider structural transformation of Tanzania is a key concern for policy makers. Understanding whether the main driver of rural income growth lies in productivity growth within agriculture itself or through the growth of off-farm activities is particularly important in countries like Tanzania, where 80% of its residents depend on agriculture for their livelihood and 70% reside in rural areas. This paper studies agricultural productivity growth in the Kagera region of Tanzania between 1991 and 2004, provides a decomposition in terms of the returns to various inputs such as land and labor, and measures the adoption of modern inputs. The key finding is that farms became smaller and more labor intensive but no more productive. Increases in consumption were attributable principally to the growth in off-farm activities.