The prioritization of rice as a strategic food and cash crop in Rwanda has paid dividends, with production increasing by one-third during 2010–2015. However, production expansion—driven mainly by land expansion as opposed to yield growth—has failed to keep pace with growing consumption demand, especially in urban areas. In 2015, around 30 percent of national consumption was met by imported long grain rice, which is preferred over locally produced rice perceived to be of a lower quality. Although our analysis shows that rice producers and wholesalers enjoy significant price incentives, mostly as a result protective trade measures, others factors appear to be hindering investments in land, the adoption of modern inputs, and the production of high quality rice that can more readily substitute imports. Drawing on our price incentive analysis, recent literature, and stakeholders interviews we recommend, firstly, the prioritization of investments in land, infrastructure, and irrigation for paddy rice production. A better understanding of how the land tenure system in Rwanda affect farmers’ investment decisions and of policy options for increasing average plot sizes is also required. Secondly, there is a need to support and modernize the rice sector so that it can better respond consumer demand dynamics in urban and rural areas. While agronomic conditions do not necessarily permit large-scale adoption of long grain rice varieties, improvements in milling and grading practices can greatly improve the quality of local rice varieties, thus allowing more effective competition with imports and the expansion of exports to emerging markets such as the Democratic Republic of Congo.