This is a socioeconomic analysis of katikala production and consumption in Arsi-Negelernworeda of Oromia region. Production and consumption of alcohol in general and katikalarnin particular have benefits and problems. Hence the main objective of the study was tornassess the socioeconomic benefits and problems of katikala production and consumptionrnin that locality.rnMultiple research methods: household survey, observation, key informant interviews andrnfocus group discussions were employed to gather both quantitative and qualitativerninformation on the production and consumption of katikala. This information wasrnanalyzed and discussed, and it was found that katikala production and consumption hasrnboth benefits and problems. Some of the benefits of katikala production are incomerngenerating and employment creation. On the other hand katikala production has problemsrnsuch as health problems mainly due to indoor air pollution, and poor educationalrnperformance of students or school drop out because of time competition and high laborrndemand. It was also found that katikala consumption has benefits to colorfully celebraterncultural festivals, and problems such as poverty, unemployment, family disorganization,rnand crimes & accidents.rnTherefore based on the findings of the study it was concluded that both katikalarnproduction and consumption had benefits and problems. However since the extent ofrnthese benefits and problems are highly subjected to time. Meaning since katikalarnproduction is the main or supplementary means of livelihood for respondents; the benefitsrnoutweigh the problems currently. But katikala production and/or consumption have longrnterm problems like chronic health problems and environmental degradation throughrndeforestation due to high consumption of fuel wood which outweighs the benefits in thernlong run. Thus the study has recommended a short term and long term plans to maximizernbenefits and minimize or avoid problems