This study was conducted to assess the situation of agriculture and industry linkagernand factors that affect the linkage in Ada 'a Woreda in particular reference to agrornindustries and rural farm households. The assessment used production, consumption,rnlabour, technology, institutions and capital as a pillar to assess the situation. Torngenerate appropriate data, sample survey, key informant interview and observationrnwere employed. Using random sampling a total of 115 farm households were drawnrnbased on their distance fiÂ·om Bishoftu town. Similarly, purposive sampling method wasrnemployed to draw 6 food processing agro industries that are found in the area. A totalrnof 15 key informants Fom government organizations, agro industries, and businessrnfirms (mainly traders) were also addressed. The data was collected through surveyrnquestionnaires, key informant interviews and observations. This study elicitedrnimportant insights in the understanding of agriculture and industry linkages found inrnthe study area. Accordingly, it was observed that there were long established linkagesrnbetween agriculture and industlY. Most of the linkages are also recognized as indirectrnin the market process. It is also identified that low agricultural production due to smallrnland holding and low application of modern agricultural inputs, distance of industrialrnestablishments Fom farm households, indirect participation of agro industries in thernlocal agricultural marketing system as well as dominance of wholesalers and brokersrnin the local agricultural marketing system are found as the main causes for lowrnlinkages of agriculture and industry in the area. Therefore, considering the existingrnsituation of individual sectoral development and linkages of the sectors in the studyrnarea, increasing agricultural production and strengthening the agricultural marketingrnsystem are found paramount to enhance the local linkages of agriculture and industry .