More often, many developing countries are in need of heighted investment activities for thernassociated benefit in emploYl11ent and income generation. Nevertheless, despite its positivernimpact pertaining to employment, there hardly been sustained effects on the livelihood ofrnlocal communities. To this end, the study principally examined the impact of jIoriculturernindustry on the livelihood of local people at Holeta town surrounding areas. To achieve thisrnobjective, the study el11ployed Cernal 's IRR 1110del. In doing so, the study used, interview, keyrninformant discussion, observation and focus group discussion.rnThe result of the study revealed that due to the jIoriculture investment 253-/arm householdsrnwere displaced in four kebeles of Holeta town administration. The dislocation programrnnegatively affected the livelihood of the displaced households. In this case, economicrndependency, loss of diverse income sources, and changes in livelihood system resulted ji-omrnthe di;placement. Furtherl11ore, the study denoted that elders, lVomen, youths and childrenrnare major victims of the altered livelihood system. The compensation schemes implemented inrnresponse to loss of asset are insignificant to changed livelihoods systel11. Consequently, thernexpansion of JIOl"er jcmlls investment and associated displacements exposed households tornlandlessness, health problem, joblessness, loss of access to common property resources,rnmarginalization, social disarticulation and food insecurity. The coping mechanisms orrnstrategies adopted by the majority of the displaced households are unable to either maintainrnor foster diverse sources of income to adapt the new situation of life. The di;placement ofrnlocal people for the purpose of jIoriculture investment needs participation of all stakeholdersrnin planning, monitoring and implementation. This will bring mutual benefit to all concernedrnand make viable sustainable livelihoods alternatives for displaced households and therebyrncreate belfer socio-economic development at grass root level.rnKeywords: The Impact of Floricu lture Industry, Displacement, Livelihood Resou rces, Localrnhouseholds