In this research, the researcher is analysing the models of development in Ethiopia on ADLI policy after the Ethio-Eritrean War of 1998-2000. As a post- conflict country it is always important to know how a country reconstructs its economy after the war. The researcher will give a brief background of Ethiopia with her different regime changes. Ethiopia is a landlocked country and is found in the Horn of Africa. Her boarders are Eritrea on the north and north east, and Djibouti and Somalia on the East, Kenya on the south, on the west and south west by Sudan. (BCC) Ethiopia has been under three remarkably different political regimes; the feudal imperial era under Emperor Haile Selassie; the socialist military dictatorship of Colonel Mangistu’s Derg; and the marketoriented Western aligned democracy of Prime Minister Meles Zenawi.(Devereux et al,2005:121 ) Each regime had applied different policies on agriculture which employs 80 percent of the population. Feudal policies where the land was in the hands of the landlords failed during Selassie’s regime and this was proved by the famine of 1974. He was overthrown by Derg in a coup in 1974. Derg introduced a “radical agrarian transformation based on land redistribution. His policies on agriculture were based on the Marxist egalitarian ideology and by conviction that feudal relations in agriculture had exposed millions of highland Ethiopians to intolerable levels of poverty and vulnerability.” (Devereux et al, 2005:121-122). According to Derg’s agricultural policy land was confiscated from the landlords and was redistributed to the rural farmers and it was trying to break inequalities over land control and it aimed at achieving agricultural productivity and rural incomes. Derg’s regime was overthrown by Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) in 1991. EPRDF further continued with land redistribution in the wake of 1990s and it gave farmlands to demobilised soldiers and tried to correct the inequalities that emerged with time as farming families were growing. (Devereux et al, 2005:122) In all these regimes, land was owned by the state. Ethiopian economy is based on agriculture which contributes 47 percent to GNP and more than 80 percent of exports, and employs 85 percent of the population. Ethiopia’s agriculture is plagued by periodic droughts, soil degradation emanating from poor agricultural practices and overgrazing, deforestation, high population density, underdeveloped water resources and poor transport infrastructure which makes extremely difficult and expensive to get goods to the market. (BCC, 07) The EPRDF came up with the new agricultural policy in the beginning of 1991 and it was known as Agriculture Development Led Industrialisation (ADLI). ADLI is the policy that emphasised on modernising smallholder agriculture and intensifying yield productivity through the supply of appropriate technology, certified seeds, fertilizers, rural credit facilities and technical assistance. (Getachew, 2003:9) This policy introduced some reforms in agriculture as it introduced a nationwide agricultural extension program, the propagation of laws that liberalised the purchasing and distribution of inputs and to increase and to make credit facilities available to rural farmers. In 1995 Minister of Agriculture (MoA) introduced a vehicle to drive the policy, which was called the Plan for Accelerated and Sustained Development to End Poverty (PADETES). The PADETES started with 32047 farmers on board. The aim was to educate farmers in new farming methods which will increase productivity and make farmers self sufficient. Agriculture Sample Survey 2009/10 states that ‘country’s experience showed that farmers’ attitude and tendency to adapt and accept new innovations, modern agricultural techniques and technologies, such as use of fertilizers, irrigation, improved seeds and pesticides that help to improve their living standards through attaining enhanced productivity, do have positive impact on the development on the agricultural sector as a whole.’(Central Statistical Agency, 2010: i) Teshome (2006:1) shows complexity of Ethiopian agriculture when he says that it largest contributor to the GDP, exports and foreign earnings and it employs almost 85 percent of the population. On the contrary, despite its socio-economic importance its performance continues to be low due to many natural and manmade factors which will be discussed in this research.