As per the available data on peasant holdings, the total area under cultivation in 1994 E.C. is estimated at 3735.6 thousands of hectares (CSA) which has shown 6.8% increase over the size of 1987 E.C. Total area under major crops has grown at an average rate of 1.1%. Similarly, area under cereals has increased by 1%, under pulses 2% and under oil crops by 0.9%. According to the classification of the agricultural holdings at national level, 78.6% of peasant holders exercise mixed farming, 18.8% is only crop producers and 2.6% are livestock holders in Oromia. In 1987 about 78% of the households have landholding less than 2 hectares, which has increased to 83.2% in 1992, exhibiting further intensive fragmentation of peasant land holding due to accelerated population growth in the region.

Generally, by virtue of relatively abundant rainfall, suitable soils and other agricultural potentialities, Oromia remains the major crop producing region in the country. Accordingly, Oromia has accounted for 49% of major food crops production 50.8% of cereals, 37% of pulses and 43.56% of oil crops production of total peasant holdings of the country in 1994 E.C. production year (CSA, 1994 E.C).

Overall, the performance of agriculture in recent years has shown an improvement in its trend, yet being characterized by significant fluctuations over the analysis years. There was an increase in crop production volume (reaching its peak in 1988 and 1993) over the analysis period except a sharp decline observed in 1990, which has happened as a result of the so-called El-Nino effect and is mostly argued to be viewed as outlier even in terms of the country's unpredictable weather cycle. As per the available evidence the average annual growth for crop production has remained low at 2.6% for the period under reference (1987-1994 E.C). It is evident that the achieved level of growth in crop production is far below the rate at which population has been increasing (2.9%) over the same period. ,

Although there was a marginal improvement in crop production performance, it was not accompanied by an increase in yield as the annual average yield per hectare was only 12.49 quintals for the seven years (1988-1994 E.C.) Yield per hectare is almost stagnant over the analysis period. Certainly, much was not changed from the level of 1987 E.C, where yield per hectare was 11.14 quintals despite the significant efforts exerted to improve production and productivity.

Looking at gross crop production it has hit the record high of 54.74 million quintals in 1988 and lowest amount of 43.0 million quintals in 1990 from 38.9 million quintals in the base year, 1987, which was yet a positive change of 40.7% and 10.5% respectively. The explanation for the relative increment in gross crop production over the base year is not merely on account of an increase in yields, as yield did not change much compared to its level in the base year of 1987, rather it is due to combination of the following factors: favorable weather and better incentives, which have led to an expansion of cultivation into more marginal lands and an increase in yield in areas of established cultivation as a result of use of improved inputs.

As evidently seen from the above analysis, crop production is characterized by smallholding of just over a hectare and limited use of input such as fertilizers, pesticides, improved seeds and implements. Moreover, heavy dependence on rain fed (limited or no use of irrigation) cultivation practice is another essential feature of smallholding peasant farming in Oromia. Thus, yield per hectare has remained extremely low and growth in production is sluggish with the an average yield of 12.49 quintals per hectare, which is by far below the potential of fifty quintals for wheat and up to eighty quintals for maize with the application of package of inputs.

Therefore, it is highly recommended that creating mechanism, which leads to halt further fragmentation of peasant holding, would be important. Secondly, put in place incentive mechanism to enhance the management of land resource leading to persistent increase in production and productivity aiming at potential level with application of packages of inputs and thereby improve food security.

As per the national average energy requirement, the energy consumption per person is an equivalent of 1.85 quintals of wheat per annum. Based on this an assessment of net food supply has been made for seven years from 1988 to 1994 E.C.

According to this evaluation, Oromia was self-sufficient in food production only in three years out of the seven years under examination (1988, 1989 and 1993 E.C.) with an average net food crop production per capita of 2.28, 2.15 and 1.86 quintals of wheat equivalent in respective years. This leaves the region with enough surplus food to feed the whole population for at least 2.8, 1.95 and 0.04 months in each of the above year respectively. In all other review years food crop per capita production was below the 1.85 quintals of wheat equivalent (as it is also true for the country as well) signifying the level of the region's vulnerability to structural food deficit. Generally, the food self-sufficiency ratio has remained below 100% for most of the review years, which causes serious concern over crop production sub sector's performance and its management given the potential of the region and the tremendous efforts that have been made and still on going.

Inputs such as fertilizer, improved seeds and chemicals are believed to be the most important production boosting factors to attain food self-sufficiency and thereby augment the income of farming households. In view of this, a lot of efforts were made by the government to improve supply and use of fertilizer and other agricultural inputs. As a result, agricultural inputs and extension services have rapidly expanded and in a closely related manner. The supply of fertilizer has increased over the last seven years reaching its climax of 1449.5 thousand quintals in 1992 compared to its level of 1987 (1,198,500 quintals), though it has exhibited a declining trend commencing 1993 settling at 829,000 quintals in 1994 E.C.

Despite the fact that the extension services on the use of fertilizer has started long ago, the level of utilization of this technology by the farmers is still very low. The average fertilizer use during the reference period was below 35 kg per hectare (assuming a standard of 100 kg/ha.) which is the lowest in the world , while that of improved seed is also very low at an average of 1.7 kg per hectare. Generally, only 45% and 3.7% of the total land under cultivation in the region were covered by fertilizer and improved seeds respectively implying low level of input use, contributing to low productivity among other factors. The situation is further aggravated by insufficient supply of other agricultural technologies such as chemicals and farm implements. Therefore, it is extremely important to further promote the use of fertilizer, improved seeds, chemicals and improved farm implements to augment production and productivity.

Fertilizer and improved seed distribution and use has increased with an average annual growth rate of 15% and 0.5% respectively, during the assessment period, showing an improvement, though, the trend was reversed in 1993 and 1994 exhibiting a declining tendency. Nonetheless, the rate at which it has increased in earlier years itself was not sufficient enough to raise average yield in the face of a decline in land quality (due to expansion into marginal land and soil degradation). The subsequent fall in fertilizer use in 1993 and 1994 might be attributed to the low price assumed by farmers for their produce, which hindered loan repayment process. Moreover, shortage and late delivery of these inputs; increase in fertilizer price, weak credit and extension services could also be cited as constraining factors. Thus, improving use of fertilizer and improved seed from its current low level has to be a priority task so as to enhance production and productivity. Secondly, reasons for a declining trend in the use of fertilizer should be sorted out and mechanisms of ensuring uninterrupted and sustainable delivery of input supply ought to be sought including enhancement of the role of co-operatives in import and distribution of fertilizer. Thirdly, as most of the farmers may not be able to purchase agricultural inputs on cash basis to augment production and productivity, continuous and sustainable credit facility access should be created for them either through micro-finance institutions, co-operative bank and/or saving and credit co-operatives or maybe even by promoting village banks in rural areas. In addition, it is also essential to create mechanisms of organizing community into self-help groups and link them to commercial banks.

Agricultural extension services play a critical role in improving production and productivity. In view of this, the government has been promoting a package of agricultural inputs, in recognition of complementarities among them. Extension packages (EP) typically include improved seed, fertilizer, credit for fertilizer, and advice on cultural practices. Initially the EP focused on maize (as maize production appeared to provide the greatest scope for rapid yield increase) and gradually has been expanded to include other cereals.

With the advent of EP the size of land under extension package has increased from 7.9 thousands of hectares (which are 0.20% of total area under food crop) in 1988 to 625.5 thousands of hectares (12.8% of total areas under food crop) in 1992 E.C over a period of five years. In terms of share of total annual crop production, area under extension package was contributing very little 0.5% in 1987, which has grown to 25% of total production in 1992 E.C. Similar to the observed trend of production, there was also an improvement in productivity of land under EP compared to areas under regular extension, signifying the effectiveness and importance of the program. However, yield per hectare has shown a declining trend right after the first year of EP, which is mainly attributed to a leap of the services from demonstration level to a wider extension expansion with out due emphasis to quality.

With regard to the number of DAs, it increased from 1499 in 1987 to 5014 in 1992 implying an improvement in DA to farmers' ratio from 1:1750 to 1:755. The decrease in DA to farmers' ratio shows that the provision of extension service has somehow improved across these years. Despite the improvement, the ratio has remained high and need to be swiftly improved to enhance the effectiveness of the advice and support of DA to farmers. Furthermore, the community opinion reveals the need to improve the capacity of these DA workers, which indeed looks valid and warrant quick action.

In general, even though significant success was achieved as the result of implementation of the extension packages program, in terms of increasing production and productivity, in areas of adequate moisture, evaluation of seven years experience of the program shows that, the program focused mainly on technology promotion and input supply, in highland and mid highland food grain producing areas, paying little attention to technologies that are compatible with the condition of moisture deficit parts of the region. Moreover, observations were also made that little considerations were given to the marketing aspect of agricultural produce, thus immensely influencing the income level of extension program participating farmers.

Besides, the program was also constrained by the fact that it had not considered the socio-economic condition of the farmers (not household based), not based on various agro-ecological classification of the region, not covered moisture stress areas, less attention to market as well as diversification and specialization.

As it is clearly stated in the Rural Development Strategy, in order to make agricultural development sustainable and thereby improve production and productivity, the approach in agricultural extension service delivery should take into account agro-ecology, diversification and specialization of products, market orientation, and improved quality of extension agents and optimum use of water resources. It is highly recommended that the extension package programs should always be continuously reviewed and necessary changes must be incorporated. Moreover, the commenced efforts of linking farmers with manufacturing industries and exporters need to be further strengthened and is also necessary to promote the warehouse receipt system to partly alleviate the marketing and resultant loss as a result of frequent change in agricultural output prices.

Coffee is the major source of foreign exchange for the country accounting for 50–60% of total exports. Oromia accounted for 77.6 percent of coffee plantation as per the 1988–1992 plan evaluation report and delivered annually about 68% of coffee destined for foreign market. Similarly, out of 53 districts known for Coffee production in the country 42 (79%) are found in Oromia showing the tremendous resource base the region is endowed with.

According to the data obtained from Oromia statistical Abstract (1987–1992), the land covered by coffee plantation in 1987 and 1992 was estimated to be 209 and 260 thousand hectares respectively, while the annual production for the same years was estimated at 901 and 1190 thousand quintals. The average annual growth rate over these years was 4.47% for land and 5.7% for production. Similarly, the average annual delivery of coffee to the central coffee market was about 835.46 thousand quintals with production range between 662 and 942 thousand quintals in the year 1988 and 1990.

Various development activities had been undertaken, within the years 1987-1993, to improve the production and quality of coffee. Accordingly, within these reference years, about 53.9 million seedlings were raised and 10,109 hectares of land on average was covered by seedlings annually. Despite the attempts that have been made in the past years to improve productivity, coffee yield from peasant farm has remained low at 4.54 quintals per hectare in the reference years.

Generally, low level of inputs delivery and use, poor organic practices and periodic disease incidences particularly that of Coffee Berry Disease (CBD), are the main causes for low yield level in coffee production. On the other hand, low price for coffee on international coffee market coupled with poor quality of export coffee, shortage of technical assistance to the farmers, low income for the farmers from sale of coffee and shortage of CBD resistant seedlings and exorbitant price for chemicals are some of the critical problems facing the sub sector. The recent global development related to coffee market, which is manifested in a very high demand for organic coffee and its relatively better price, is likely to encourage more usage of organic fertilizer that would obviously lead to earning higher income to farmers. Therefore, it is important to emphasize and promote the effective use of organic fertilizer. Moreover, the effort to increase organic coffee for export should be compounded with adequate attention to the improvement of the quality of coffee.

One of the reasons for low agricultural performance and low income levels in the region is the tendency of traditional focus which is in favor of cereal production in spite of the extremely high agro-ecologic diversities and the resource potentials for production and diversifications into relatively high yielding and high income generating horticultural crops (vegetables and root crops), fruits, flowers, spices and chat. Cereals crop development has been receiving almost the entire attention both in terms of extension interventions and resource allocation in the past years possibly from the stand point of attaining food self-sufficiency and lack of market. Although, it seems rational to focus on cereals crops for the mere reasons just mentioned, it is important to equally pay sufficient attention for high value crops like chat (contribute over 21-26% of the region's direct tax revenue) and fruits and vegetable to improve the income of farming households. Therefore, it is imperative that the government gives proper emphasis to promote the development of high value crops to augment the income of households eventually ensuring food security by adopting appropriate strategy including product diversification. Moreover, it is also vital to facilitate market places including storage and sales points for vegetable producing farmers in towns. Apart from this, organizing high value crop producers into co-operatives and assisting them to enter into export of these crops to the Middle-east and beyond is an area that deserves sufficient attention and immediate action to enhance the income of farmers.