There are two main types of agricultural extension projects in Korea, the impacts and routes of each type on farm income are different. This paper empirically studies the impact of agricultural extension to farms' income, using Multi-level production function considering time lag. It is found that direct type of extension has positive effect to farms' income. Also indirect type on income is significant only when the level of education is high. Due to the characteristics of Korean agricultural structure, the technical level of farm is greatly influenced by the government's R&D investment and technology guidance. The result implies that indirect type of extension that take into account the educational level of farms should be emphasized for long-term technological advances.