Abstract
The study characterizes and analyzes the existing farming system and identifies the production and marketing constraints of Cheliya and Ilu Gelan districts with cross-sectional data of 105 sample households. The farming system of the study areas is characterized as mixed farming systems with 59.1 and 27.44% contribution of crop and livestock, respectively for livelihood activities. From the survey results, disease (96.19%), shortage of grazing land (73.33%), feed shortage (48.57%), shortage of veterinary medicine (20.95%), shortage of water (18.10%) and lack of improved breeds (14.29%) were identified as major important constraints in livestock production. High transaction cost (71.43%), lack of capital (35.24%), lack of market information (23.81%), price and demand fluctuation (21.90%), lack of market linkage (14.29%) and unorganized marketing system (12.38%) were reported as major constraints in livestock marketing. Pests, high cost of inputs, shortage of land, weed infestation, shortage of inputs, low yield, poor quality of seed and poor soil fertility were identified as important crop production constraints. High transaction cost, low price output, lack of market information and lack of market linkage were summarized as major crop marketing constraints. Besides, soil erosion, soil fertility decline, water logging, soil acidity and termite were reported as important constraints in natural resources. Improving livestock productivity through improved breed, forage, control disease and control illegal livestock trade needs attention. Additionally, improving crop productivity through Integrated Pest Management (IPM), improved varieties, minimizing transaction cost, focusing on high value crop, expanding soil and water conservation, strengthening market information and linkage needs urgent concentration for interventions. Key words: Crop, farming system, livestock, natural resource.  
Highlights
These challenges call for characterization and analysis of farming system of the study areas to enhance production and productivity of crop, livestock and natural resources
Faba bean and barley crops were affected by various constraints like pests, shortage of land, low yield, shortage of inputs and poor soil fertility reported as main constraints
Livestock production is the important assets in the study areas for different purposes including sources of food, draught power, transportation service, source of income generation and manure production for soil fertility improvement
Summary
Smallholder farmers in the study areas are not focused on market oriented productions rather than substance production in dynamics of farming system. These challenges call for characterization and analysis of farming system of the study areas to enhance production and productivity of crop, livestock and natural resources. The Ethiopian agriculture is dominated by about 11.7 million smallholders responsible for about 95% of the national agricultural production while large farms contribute only 5% of the total production (CSA, 2017). This shows that the overall economy of the country and the food security of the majority of the population depend on small-scale agriculture
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