The study tried to identify the gaps of the existing laws, rules and regulations about large scale investment & environment, and the knowledge of investors and affected landholders about these laws. Based on the overall findings of the study, amendment of the existing legal system, establish proper environmental policy, establish social and economic networks in the investment area, raise awareness of all stakeholders in the process of productivity and environmental mitigation mechanisms are required. This study was conducted to examine the impact on income or productivity, livelihoods and environment in the study area. It also tried to identify investment policy options that will minimize the impact of environment on Coredom site of rural farming project of West Armachiho woreda. The data used in this research were collected mainly from primary sources of investors, model small scale farming projects. A three stage sampling procedure was used to select representative data from each project types. Primary data were collected using structured questionnaire. In addition, key informant interview were made with selected city administration and sub city officials using semi structure questionnaire. Key Terms: Large scale Agriculture investment, Small scale farmers, agribusiness Investment, Environment