The paper purports to examine the consequences of foreign direct investment (FDI) in agricultural land in a developing economy using a three-sector general equilibrium model with simultaneous existence off unemployment of both skilled and unskilled labour. The analysis finds that FDI in agriculture does not only improve national welfare unequivocally but also mitigates unemployment problem of both types of labour. The paper theoretically justifies the desirability of flow of FDI in agriculture in the developing economies.