Suryani, S.(Dr)Ayele, Gezahegn2021-10-152023-11-042021-10-152023-11-041988-06http://etd.aau.edu.et/handle/123456789/28159This thesis reports on a case study of the middle Awash cotton .. producing farms conducted with the objective of assessing the economic performance of Ethiopia’s state farms as well as identifying the factors affecting such performance. The financial rate of return of the farms as calculated in the study confirms the result of aggregative studies conducted earlier that state farms are heavy financial loosers.However it is also the study,s finding that the same farms have consistently generated ret economic returns over the post seven years.This is experessive of the farm,s contribution to the economy by meeting rat material requirements of domostinc industries and engaging elements of the actively job seeking rural underempoved. The contrast between the farms positive economic returns and Their poor financial performance is mainly expiained by market dis tortions due to the government pricing policy. It also indicates the conflicting nature of the objectives that the government wishes to attain throug!l state farms . It is a second finding of the study that in spite of the current pricing policy: the farms I financial as well as economic rate of return figures would :lave been higher ':hall is the case at present with a more rational use of resources.The current farm management policy is 0ne of excessive centralization and stands in the way of such rational use. The findings of the study should not suggest that state farms understudy are necessarily be the least cost means of obtaining the benefits the farms are current’y generating.enDevelopmentStateThesis