In agriculture, a terrace is a piece of sloped plane that has been cut into a series of successively receding flat surfaces or platforms, which resemble steps, for the purposes of more effective farming. This type of landscaping, therefore, is called terracing. Graduated terrace steps are commonly used to farm on hilly or mountainous terrain. Terraced fields decrease erosion and surface runoff, and are effective for growing crops that require a lot of water, including rice. The only rice terraces to be recognized as a UNESCO World Heritage Site are the rice terraces of the Philippine Cordilleras.

Terraced paddy fields are used widely in rice farming in east, south, and southeast Asia, as well as other places. Drier-climate terrace farming is common throughout the Mediterranean Basin, e.g., in Cadaqués, Catalonia, where they were used for vineyards, olive trees, cork oak, etc., on Mallorca, or in Cinque Terre, Italy.

In the South American Andes, farmers have used terraces known as andenes for over a thousand years to farm potatoes, maize, and other native crops. Terraced farming followed complex systems developed over centuries by Inca engineers to conserve scarce water in the mountains. The terraces were built to make the most efficient use of shallow soil and to enable irrigation of crops. The Inca used a system of canals, aqueducts, and puquios to direct water through dry land and increase fertility.^{[citation needed]} These terraced farms are found wherever mountain villages have existed in the Andes. They provided food necessary to support the populations of great Inca cities and religious centres such as Machu Picchu.