Long-term structural change and determinants of agricultural output in small-scale farming in Rwanda
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This paper takes a long-term view of drivers of agricultural output in a densely populated area of rural Rwanda. Farm households that had been surveyed in 1986 were resurveyed in 2012, and their split-off children’s farm households were included, which results in a unique two-wave panel dataset spanning 26 years. Far-reaching structural change in the small farm sector is identified, with a further decline in farm size, significantly increased labour use and much increased capital use. Average farm size decreased from 0.76 to 0.43 hectares. Output per farm was about constant compared to the initial survey round, while off-farm income had increased. OLS and fixed effect panel data estimates of production functions suggest that, over the long-run study period, agricultural output was characterised by more or less unchanged elasticity of land and somewhat decreased elasticity of capital, whereas the elasticity of labour had grown substantially, from 0.2 to 0.4. Overall economies of scale tend to be increasing.