This Doctoral thesis analyzes the Ethiopian agricultural innovation, in particular the case of dairy farming and business in the Addis Ababa milk shed. The innovation capacity assessment model is used to develop the methodology of this study. Data collection, guided by the key components of the innovation system framework, include sector mapping, historical evolution of the sector, resource base analysis, interactions between actors, the policy environment, habits and practices, and resilient features and leverage points.

Agriculture is central to Ethiopian economy but its sustainable development faces enormous challenges. Low innovation capacity, low productivity, dwindling natural resources and climate change, small-scale subsistence farming, and low levels of market integration and value addition have all made agricultural development more complex. In spite of the decades of research and development efforts, the rate of growth for both crop and livestock productivity has remained low.

The citizens of Lesotho rely on a complex web of livelihood strategies made primarily of family kinships and strong community networks. Recently, community breakdowns have occurred because of extensive land degradation, soil erosion, widespread poverty, and HIV/AIDs. This thesis focuses on two aspects which are likely to help decrease the problems earlier stated.

Agricultural marketing is the main driving force for economic growth. But it is poorly developed in most developing countries. The main cause for the poor development of the agricultural production is the poor development of the agricultural marketing. To overcome this problem the government of Ethiopia has developed a master plan to enhance market oriented production. To realize this plan different projects have been developed and implemented in different parts of the country.

Farmers Training Center (FTC)-based farmer training is an emerging extension strategy geared towards human capital development through need-based, hands-on practical training in order to facilitate agricultural transformation and rural livelihood improvement. Although FTCs were established and made functional in the Tigray National Regional State and Alamata Woreda no systematic assessment of the relevance and effectiveness of the training were made.