The combination of agricultural extension system with small scale irrigation development helps to reduce poverty, and now utmost attention is given to it. Extension system development can increases the production and income of the households and helps to improve their overall economic welfare. This study was conducted to assess the strengths and constraints of the public extension system and to provide suggestions on “best fit” solutions and their scale-up opportunities in the small scale irrigation user; furthermore it examines the impact of agricultural extension system on small-scale irrigation on total income, and the probability of being poor or not at household level. Survey was carried out involving 900 extension users’ households and 875 non-extension users in Afar, Oromia and Somali regional states of Ethiopia which was a total of 1775 households. The result of the study by taking indicators of family size extension service users had more families 6.3 to 5.6 in non-user. The total crop income for one season was 41,282 Ethiopian birr while it was 16,276 for non-users. At the time of the data collection the exchange rate for a dollar was 19.67 Ethiopian Birr. Using a Tobit model to determine the total income parameters of education, extension service access, total land holding had a significant level of increment, while with marginal analysis (dy/dx) factors like household leaders’ age, access to credit and dependency ratios were negatively related with total income. In general, the average annual income of extension users with application of small scale irrigation households was significantly greater than non-extension users. This shows that extension users in small-scale irrigation significantly promote total income of a household. The poverty incidence in non-extension user households is by far greater than user households. Thus, for the agrarian country, Ethiopia, extension system development in small-scale irrigation districts has significant impact on poverty reduction, so agricultural extension development should be given emphasis in development planning. Key words: Income, poverty, small-scale irrigation, extension service, Logit, Tobit, marginal effect.
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