Water is a scarce resource in Central Rift Valley of Ethiopia and is a major limiting factor for crop production. Onion is one of the major economically important vegetable crops grown under irrigation in central rift valley. The field experiment was conducted at Melkasa agricultural research center during the dry season to identify conventional furrow irrigation and irrigation application level with and without mulch that maximizes productivity of onion per unit of water consumed and enhanced

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... nion crop production. The experiment was carried out using RCB design having six treatments with three replications. The FAO's recommended allowable Manageable depletion level of onion is 100%. In this study 75%, 100% recommended and 125% were tested. The analysis of variance for the result of the study indicated highly significant (P ≤ 0.05) differences for yield, yield components and WUE's. The highest yield of 320.7 ton/ha was obtained from the 75%MAD with mulch which was not significantly (P ≤ 0.05) different to the 100%MAD irrigation level. In terms of irrigation and water use efficiency, 75%MAD irrigation level application gave the highest IWUE which was significantly different from all other treatment combinations. Yield and water use efficiency based comparison had shown that there was significant difference between the yield, CWUE, and IWUE obtained in the treatment. Therefore, it can be concluded that increased water saving and associated water productivity through the use of 75%MAD with Conventional furrow irrigation and mulch, can solve problem of water shortage which improve WUE without significant reduction of yield.75%MAD irrigation level water applied system and mulch appears to be a promising alternative for water conservation and labor saving with negligible trade-off in yield.