Poverty reduction in Ethiopia is one of the key priorities for sustainable development. In line with this, the government of Ethiopia has designed to undertake construction of irrigation dams from small-scale up to large-scale irrigation scheme so as to reduce the frequent drought, food insecurity and poverty problems. Koga large-scale irrigation is part of these initiatives for rural farmers and intended to achieve poverty reduction goals. However, less attention is given for large-scale irrigation schemes for rural farmers in the country. The main objective of this study was to examine the impact of Koga-large scale irrigation scheme on poverty status of rural households of Mecha District. A two stage random sampling technique was employed to select 180 sample households. Descriptive statistics, Foster-Greer-Thorbecke index formula, and econometric model were used to analyze the data. The average treatment effect on the treated result indicated that the mean annual income and daily consumption expenditure per adult equivalent of irrigation users were increased by 29.86% and 28.87%, respectively. The mean squared poverty gap of irrigation user households were significantly reduced by 15% as compared to irrigation non-user households. The study depicted that large-scale irrigation dam project would contribute reducing poverty status of rural households. Based on the key research findings, this study provides recommendations on maintenance and expansion of irrigated areas, construction of dams and pressurized irrigation system for making irrigated agriculture effective tool for poverty reduction.

Keywords: Poverty, PSM, Mecha, Impact, Irrigation, FGT, Ethiopia