Ethiopia is second populous county in Sub Saharan Africa with tremendous land and water resources. However, most of the areas used by settlement are extremely degraded, per capita land availability is dwindled and productivities of land and labor are reduced. Agricultural productivity is also very much affected due to variability of rainfall and drought. Agricultural production growth mainly comes through intensification and limited intensification. Since 1950s there are mixed experiences with promoting irrigation and other modern agricultural technologies in the effort of intensification. In the last decade, small-scale irrigation and rainwater harvesting are central to Ethiopia‘s new policy and strategy on agricultural and rural development. This thesis explores the impact of irrigation income and poverty in northern Ethiopia. The overall working hypothesis of the thesis is that irrigation has an impact in improving household income and reduces the incidence, depth and severity of poverty in dry land areas of Ethiopia. The analysis is based on primary household-level data collected from randomly selected households in two Tabia of SaharitiSamre in the 2011/12 agricultural year. To analyses the impact, descriptive statistics, poverty profile comparison, and econometrics matching method were used. Research results indicate that households‘ access to irrigation has a significant impact on poverty reduction. Poverty among the user is less by 5% than poverty among the non-user. Irrigation has a positive influence agricultural development through increasing productivity, income of household and overall family employment
