This study estimates the effects of agricultural extension on agricultural productivity in the rural area of Uganda, i.e. Mbale district. The results show that agricultural extension service in Mbale district has a significantly positive impact on bean and rice production, gross farm revenue, and profit except for maize output. It presents several contributions of agricultural extension in Mbale district. First, both worker and allocative effects on bean and rice significantly contribute to agricultural performance, implying that both effects are crucial in this region. Second, extension service for each product shows positive effects through the allocative effect rather than worker effect. Specifically, the input-selection effect is found to be a more influential contributor than input-allocation effect in this area. Overall, the findings support the hypothesis of this paper that extension increases not only farmers’ direct output, also allocative ability in crop production. The results from the three function approaches lead us to the implication that local government, development project planners or stakeholders who deliver extension in Mbale district should increase investment on public extension system for more effective extension work in order to achieve long-term goals in terms of rural development in this region.