A Dissertation submitted in Partial fulfilment of the Requirements for the Degree of Master of Science in Economics (MSc Economics) of Mzumbe University 2013ABSTRACT Irrigation farming is one of the most important rural development investments that can have both direct and indirect impacts on poverty and food security. Small-scale irrigation is said to be the dominant contributor to the total irrigated areas. Despite the contribution of small scale irrigation systems in enhancing rural agricultural production and alleviating poverty being widely recognized, this contribution has not been evident for small scale holder farmers at Lumuma irrigation scheme. The general objective was to assess the contribution of small scale irrigation scheme at Lumuma in enhancing the livelihood of rural households. Case study research design was used in the methodology. A sample size of 75 respondents (including small scale holder farmers and extension officers) was involved. Data collected were descriptively analysed using SPSS computer software. The findings from the study showed that 70% of the respondents agreed that the availability and utilization of Lumuma irrigation scheme has reduced indebtedness caused by poverty which they faced before the commencement of the scheme. However, 78% of the respondents argued for the presence of poor infrastructure which does not enable farmers to attain the expected yields and 80% of the respondents reported the lack of reliable markets and information which necessitate farmers to sell their yields in a low price. Likewise, 78% of the respondents agreed on improving the physical infrastructure of Lumuma irrigation scheme in order to carter for a good number of small scale holder farmers and access to marketing the products as to enable farmers to freely sell their products at the reliable market for the purpose of attaining profits. The utilization of Lumuma irrigation scheme has been a success to small scale holder farmers in Kilosa district. Policy makers have to see a need for promoting irrigation development so that farmers can irrigate more crops, fruits, vegetables and other fresh produce while encouraging group cohesion in scheme activities like marketing and maintenance of infrastructure.