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Different households adopt different livelihood strategies according to their particular asset and asset status (Ellis, 2000a). Accordingly,Despite the continuing economic centrality of agriculture in the district, farm households engage and pursue diverse livelihood strategies to cope with diverse challenges and risks due to drought and other factors; and as a result to improve their level of living standard. Of the model independent explanatory variables: sex, age, family size, dependency ratio and distance from market center were significantly and negatively affect household s choice of livelihood strategies. On the other hand, Education, membership to cooperatives, credit use and receiving remittance also significantly and positively affect household s choice of livelihood strategies. Those households endowed with the education, financial capital, or market access necessary to take advantage of relatively remunerative opportunities in the non-farm economy were able to take better advantage to recover from aggregate shocks like Drought and the inverse is true for those do not. The key point is that wealthy have greater freedom to choose among a wider range of livelihood options