In Uganda, the greatest cause of crop damage is the shortage of rainfall due to meteorological and land structural aspects of present farming situation. The purpose of this study was to evaluate the effect of terrace development, the relationship between terrace size and efficiency of rainfall catchment, and the subsequent effects of terrace development on rice yield of the New Rice for Africa (NERICA) on sloping rainfed fields. Results revealed that terrace developments were efficient in terms of rainfall catchment which led subsequent effects on the increase of volumetric water contents and rice yield. It is suggested that narrow sized terraces are more efficient than wide sized terraces in rainfall catchment since the highest average yields of 1,568 and 1,237 Kg/ha were recorded for 0.9 m and 1.5 m terraces, respectively, while the 2.5 m terrace and non-terraced control had the least yields of 1,038 and 777 Kg/ha respectively. In addition, the average increasing rate in volumetric water content after rainfall was four times higher for banked terraces than in non-terrace plots. It was also revealed that terrace development decrease the number of missing rice plants by reducing the influence of soil erosion at inclined fields. The above study highlights that terracing is an effective water harvest technology for stable NERICA production under certain levels of unexpected and inexplicable changes in the rainfall pattern. However, because the use of terraces can prove futile in cases of severe drought, they must be applied alongside other technologies like irrigation.