In Ethiopia, Agricultural extension policy is a part of national development, poverty reduction policy in general and of agricultural and rural development policy in particular. Therefore, agricultural extension is the main policy instrument which governments use to stimulate agricultural and rural development. The Ethiopian extension policy declares coordination with research, input supply, and credit and marketing systems, as well as some flexibility to reflect agro-ecological diversity. The policy has defined the mission and goals for agricultural extension, the responsible agencies and personnel, the clientele to be served, and the broad programmatic areas to be addressed.

Although extension has a broad and universal significance, its mission and goals may need to be adjusted according to national objectives and the context and stage of agricultural and rural development in a given country. This mission then should be reflected in a statement of goals and objectives that are agreed upon and assigned to extension in a supporting policy document.

National extension systems can pursue one of several different extension approaches in implementing extension policy. Most extension systems in Ethiopia as well as similar developing countries give primary attention to technology transfer, given national agricultural policies that emphasize increasing food production and achieving national food security. Therefore, the extension approach pursued should reflect the mission of extension, and thus define the functions, programmes, and tasks that should be carried out by the extension.

Broadly speaking, the subject matter of extension is implied in the mission statement and even in the title of the extension service. What differentiates between agricultural and rural extension is the subject matter that the extension service will include in its programmes and the target groups to be served among the rural population. Very narrow subject-matter coverage such as the promotion of food and cash crops and animal production may invite a costly proliferation of several specialized and uncoordinated extension initiatives. Broader subject-matter coverage, such as promoting the entire farming system, sustainable agricultural and rural development, leads to a more unified agricultural extension system. Another issue is whether the extension system should include socioeconomic and sustainable development messages.

Geographical coverage can be an important policy issue because of both political and cost implications. Most political leaders try to influence the geographical coverage of effective extension service. When extension funding is to be provided by different levels of government (cost sharing), then the structure of extension reflect these different sources of funding. Extension personnel will tend to be more responsible to those levels of government that provide extension funding. For example, if local governmental units provide some extension funding, then extension personnel will tend to be more responsive to the needs of farmers and political leaders within these local government units than they are if all funding comes from the national government. In short, having multiple sources of funding, especially from different levels of government, will increase the number of shareholders and result in an extension system that has a broader base of support and more responsive to stakeholders at the local level.

A common criticism of extension services in developing countries is their neglect of the vast number of small-scale farmers in favour of fewer numbers of large farmers, or the very limited attention given to women farmers. This is a policy issue because of its implications for the mission and goals of extension, the priorities for technology generation by research, the cost-effectiveness of extension, and the socio-political goals of growth with equity and poverty alleviation.