Opportunities and Challenges for Private Service Delivery:

Providing sustainable financing for agricultural service in Ethiopia has been a major problem due to lack of funding. As a result, privatizing agricultural services is seen as a tenable policy option to meet the public financial constraint. This needs the redefinition of the role of the public sector in shifting financing and provision of services which have effective demand. The most important issues are not whether the private sector develops, but rather how and when it does so. The overall argument of this paper is, first, that there is a clear need for strong linkage between public and private actors, but it needs to be based on working institutional setup that create enabling environment for actors. This needs the service delivery system that go beyond mere increase in yields to include good marketing functions for guaranteed income increase for farmers to pay for services and this is an important condition need to be attached to WTP to engage private sectors in addressing the development challenges. Intended users this paper are GO, NGOs, private sector and donor organizations that are engaged in market-oriented development for scaling out these learnings to other districts.