Factors Affecting Farm Performance among Small-Scale Farmers in the Volcanic Highlands of Rwanda: What is the Role of Institutions?

Abstract

This study attempted to examine the role of institutions in boosting rural and agricultural development in the region of the Volcanic Highlands of Rwanda. Both qualitative and quantitative data were collected from a random sample of 401 small-scale farmers through a questionnaire. Data were analyzed using a weighted least-squares method to account for heteroscedasticity, a common issue in cross-sectional studies. Results from crop output function reveal a positive and significant effect of cooperative membership, a negative but significant effect of extension services, and a negative non-significant effect of land tenure, credit access, and market access on farm production, respectively. In terms of net farm income function, the results demonstrate that farmer cooperation, land tenure, extension services, and access to output markets have a positive, non-significant influence, but that access to finance has a negative non-significant effect. Results also point to a positive and significant effect of some household characteristics, namely family size, farming experience, land size, and farm yield, on farm production. As for net farm income, education of the head, family size, farm experience, land size, farm yield, selling price, and cattle proved to be among primary determinants. It was therefore suggested that agricultural sector programs and activities should be readapted and strengthened in order to leverage rural and agricultural development in Rwanda.