This paper discusses the trickle-down effects of productivity growth in Agriculture and trade-offs between agricultural aggregate productivity growth and rural poverty alleviation. Empirically, we attempt to establish the link between agricultural productivity growth and the distribution of incomes in rural areas, the price for grains – a major agricultural commodity, employment of skilled and unskilled workers and real agricultural wages in Ukrainian agriculture. The effects of these factors on the incidence of rural poverty in Ukraine are studied. The analysis shows that due to inequality enhancing and unskilled employment reducing effects of total factor productivity growth, rural poverty declines only marginally with agricultural growth in the current Ukrainian context – by 0,06% per year.