Although irrigation is a way to increase agricultural production, the irrigated production of the country still falls far short of expectations. The aim of this study is to assess small-scale irrigation systems in Ethiopia and how they affect the livelihoods of smallholder farmers in Omonada district and how they impact on the lives of smallholder farmers. The data was collected from 196 family heads who were interviewed by the individual farmer organisations. The objective of the study was achieved using endogenous switch regression (ESR) to account for possible selection bias. After adjusting for all confounding variables, we find that the use of small-scale irrigation leads to an increase in net income from the crop. Apart from the environmental benefits of small-scale irrigation, which have been demonstrated elsewhere, our results suggest that the use of small-scale irrigation is also justified from an economic and livelihood perspective. The report also suggests that irrigation systems should be properly managed and used sustainably.

Keywords: Small-scale irrigation; livelihood; endogenous switching regression.