In the aftermath of thirty years of war for independence, the Eritrean state has pursued self-reliance strategy of development that relies on national resources, human and natural. It has disregarded international capital due to the risks it comprises. Instead it has put land and labour, the two major national resources, under full management of the state. Focusing on the current peasantry mode of production, the objective of this article is to analyse the impacts of self-reliance strategy on rural agriculture. Using qualitative data gathered between January and April 2017 through ethnographic fieldwork and interviews, the article concludes that state management of labour and land exhibits mixed outcomes. To begin with, the land policy has circumvented the development of land market; two, it has saved peasants from capitalist dispossession; three, it has eradicated the historical inequality created by the imbalanced land ownership. On the other hand, the labour policy has drained labour from agriculture; and secondly, it has increased rural-urban and international migrations. In a nutshell, the policy has introduced new non-capitalist social configurations in the rural area, and has converted the state into a major force of depeasantization of rural labour.