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In recent years, sub–Saharan African countries including Ethiopia have largely targeted large-scale agricultural investment (LAI) on the grounds of economic growth, employment and income generation, but with little consideration of its potential impacts on local smallholder farmers. Using evidence from the Central Rift Valley of Ethiopia (CRVE), this study provides an in-depth analysis of the socioeconomic impacts of LAIs, particularly on the local smallholder farmers, based on data collected through a household survey, key informant interviews and focus group discussions. For the purpose, descriptive and inferential statistics and qualitative thematic analysis were used to interpret the data. Our study found that the LAI has many positive socioeconomic benefits to the local communities, as measured by technological transfer, employment opportunity and local infrastructure development. However, those farmers who were able to access LAI had better positive socioeconomic benefits while those who could not access LAI (particularly the smallholder farmers) were disproportionately disadvantaged. Nonetheless, LAI motivated and prompted some farmers to use improved agricultural technologies, including irrigation, better crop varieties, chemical fertilizer and engagement in alternative sources of income such as shopkeeping, selling manufactured products and food and drinks to farm employees and casual employment opportunities within the LAI. This has resulted in improvement of the livelihood status of some farming households. Despite several positive impacts, some negative impacts, such as loss of farmlands, reduced numbers of livestock, increased price of farmland for renting, have disproportionately affected the livelihoods of local smallholder [End Page 59] households. In light of these findings, we conclude that scaling up of agricultural technologies and targeted support to smallholder farmers for alternative income sources (with technical and financial support) could improve their livelihoods. [ABSTRACT FROM AUTHOR]