Khat, Ethiopia’s largest export cash crop, is the backbone of the Ethiopian economy. However, Ethiopia has not yet fully promoted its position as the utmost producer and exporter of khat in a global market because of its different policy discourses and illegal trade issues on khat production. The life of many smallholder households relies on khat production and its marketing in a country. Hence for thus, some information has been gathered on different aspects of khat with the objectives of reviewing khat’s impacts on the livelihood of smallholder farmers, its production status, and marketing constraints in Ethiopia. To review these objectives, data from CSA, and different published materials on khat were used. According to the review, khat production has a positive impact on securing household food insecurity and improving the livelihood status of smallholder farmers, and the largest foreign exchange-earning cash crops. However, it is exploited almost in all parts of a country’s government policy discourse on khat production and its trade legal issues, lack of infrastructure, zero access to extension services, zero tangible value addition, inadequate technology transfer, and research, and price volatility because of product perishability behavior are among major constraints threatened in khat production in Ethiopia. Its vulnerable and corrupted marketing system, zero market promotion and political dichotomy, long market chain, chronic market information, and unfair price were reported by different scholars as major problems of khat marketing in Ethiopia. From these probs: The government should analyze why and its impact on khat production discourse policy on the livelihood of smallholder households and overlook positive policy proclamation. Encouraging research and technology transfer to transform products into manufacturing industries, enhancing infrastructural and institutional facilities, and improving khat production product technologies through development, and khat production agribusiness industry transformation, institutionalizing its marketing arrangement and other related agronomic practices are among the major recommendations to forward so.
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