This study examines the role, structure and effectiveness of informal seed systems in the diffusion of new barley varieties. It uses data collected by tracing farmers who received new barley varieties and other farmers who purchased seeds through farmer-to-farmer seed trade over a period of five years. The principal finding was that informal farmer-to-farmer seed dissemination was an important vehicle for the diffusion of new barley varieties, which were grow on 27% of the barley area of monitored farmers, despite a complete lack of extension support. Almost all seed exchanges were undertaken through purchases at market prices, highlighting the importance of markets in informal seed systems. The second main finding was the high concentration of seed sales among a few key seed suppliers, who established reputations as reliable sources of seed and had contacts with research organizations. The importance of market-based local seed transactions implies that farmers specializing in seed sales can invest in local seed enterprises and provide sustainable services at affordable prices. The results of this study indicate great potential for supporting local seed suppliers in order to ensure a sustainable flow of new crop varieties to smallholder farmers in the dry areas. The study also examined farmers' criteria in evaluating and eventually adopting a new variety. These criteria depend on agro-ecological zones with more complex criteria in drier areas with high rainfall variability. These findings will help plant breeding programmes to target dry and marginal areas, where access to new varieties is low, more effectively.