This study analyzed factors affecting modern agricultural technology adoption by farmers and the impact of
technology adoption decision on the welfare of households in the study area. The data used for the study were
obtained from 145 randomly selected sample households in the study area. Binary logit model was employed to
analyze the determinants of farmers’ decisions to adopt modern technologies. Moreover, the average effect of
adoption on household incomes and expenditure were estimated by using propensity score matching method.
The result of the logistic regression showed that household heads’ education level, farm size, credit accessibility,
perception of farmers about cost of the inputs and off-farm income positively and significantly affected the farm
households’ adoption decision; while family size affected their decision negatively and significantly. The result
of the propensity score matching estimation showed that the average income and consumption expenditure of
adopters are greater than that of non-adopters. Based on these findings it is recommended that the zonal and the
woreda leaders extension agents farm and education experts, policy makers and other development oriented
organizations have to plan in such a way that the farm households in the study area will obtain sufficient
education, credit accessibilities and also have to train farmers to make them understand the benefits obtained
from adopting the new technologies. These bodies have also to arrange policy issues that improve farm labour
participation of household members and also to arrange the ways in which farmers obtain means of income
outside farming activities.