Key words: socio-economic lran,jormalion, stllallholder irrig ation, irrigation management, Inslillllionalrnarrangeme ntsrnSmallholder irrigalion developmenl al Middle Awash areas including the case sludy areas is Ihe resull and partrnof an ongoing politico and so cio -economic transforlllation undertakings. Until 1980.1', livestock produclion hasrnbeen Ih e backbone afth e Afar economy when Ihey used to pursue Ihe pasloralway of life . Their livestock wealthrnwas considerable and Ihey were almosl enlirely dependenl on il for subs islence. However, Ihis produclionrnsystem had been undergoing pressure over Ihe last fo ur decades and highly aggravaled since Ihe end of 1980srnas a result its vulnerability 10 environmental slresses has increasedrnTherefore, because of Ihese ecological and environmenlal crises and olhers external faclors logelher wilh Ih eirrnchanging perceptions on the value of their land the communities res iding near Ihe two sides of Awash riverrnbanks have slarled crop-lives lock mixed production sys lem. Sabure and Gelee la Dora smallholder irrigalionrnschemes are traditional irrigalions syslems inilialed by the Agro-paslorals Ihemselves since 1990s.rnWith this sludy, great efforl has been made to clarifY Ihe slale of irrigalion management practice s and Ihe majorrninstitulional arrangements in Ihe two study schemes. To me et the objeclive, a household survey was conducledrndu ring April 2006. Two Iraditional smallholder irrigation schemes from two different livelihood zones havernbeen selected as a case study. These are Sabure irrigali on scheme from Awash Fentale district and GeleelarnDora schemes, from Ge wane districi. Siratified proporlionate sampling method was us ed to select samplernhouseholds based on Ihe irrigalion organizalion of the irrigalion systems. In addilion, key informant and ex perlrninterview, focus group discussion and dire ci observations were made 10 coileci dala and informal ion fromrnrelevanl sources. For data analysis, bOlh qualitative assessmenl and descriptive quantitalive analysisrntechniques were used in combinalion.rnThe survey resull revealed Ihat Ih e organization in charge of irrigalion managemenl allhe two case sludy areasrnis Ih e basic Afar lradilional resource managemenl inslitulion following wilh Iheir prinCiple of rationalityrnideology for wal eI' allocalion and dislribulion al local level. However, Ihe survey findings show Ihal lack ofrnformally eSlablished WUAs althe two schemes has negaliv ely affecled the nego tialing power of Ihe slallholders 'rninformal organizations wilh othe r waler users and eX Iernal instilutions in relalion 10 Iheir waler righls.rnAnother major finding by this study is Ihal lack of beller inslitulional arrangemenl (for waler and land uses) alrnMiddle Awash including al the two case study areas, is Ihe major challenge for the productivity of Ihernsmallholder irrigalion sub-sector. The legal and inslitulional problems in Ihe water sector has resulted inrnartificial water scarcity for Ih e smallholder irrigators and has negalively affecting the produclivity andrncropping pat/ern of the sub-sector. Finally, a number of conclusions and recommendations have bee n drawnrnab oul requirements for beller performance and sustainability of the smallholder irrigation sub-sector at M iddlernAwash as a whole including at the two case study areas.