ABSTRACT
Prior to the 1974 Ethiopian Revolution, the most frequently cited problems contributing to Ethiopia's agricultural underdevelopment were structural in nature. These mainly included the feudal land tenure system characterized by the absentee landlord, tenancy and land insecurity, and the fatalistic tradition of peasants reinforced by conservative religious institutions, and a feudal structure that was resistant to change and innovation. Arsi Rural Development Unit is the only integrated rural development program in Ethiopia with the objective of increasing the income and agricultural productivity of peasant farmers. The Agrarian Reform has made a genuine attempt to improve the living standards of peasants through the provisions of education, health, and rural roads, and to narrow the gap between the urban and the rural sectors. The Agrarian Reform has created important peasant institutions and cooperative societies that could bring a sustainable growth in agriculture. Peasant institutions could mobilize labor to consttuct schools, clinics, rural roads, provide drinking water and other social services.
