If it is accepted that both the system and the individual can act as barriers to development at the micro-level, development policy could be aimed at identifying the major causes and sources of inefficiency and removing the existing barriers to the achievement of efficiency.In this article the major barriers to system efficiency are identified as being physical and institutional, and they include the physical structure of irrigation schemes, the land tenure system and the marketing structure. A theoretical discussion of each of these factors is used to propose more specific strategies for micro-level rural development.