This paper aims to better understand the context in which smallholder farms operate. The study has developed a new methodology to establish country-wide farm typologies that combines household and macro-level data (household survey, agricultural census and land cover data) to analyze food security and poverty, to enable an analysis that is both farm-system specific and spatially explicit. Using this methodology to analyze the poverty and food security situation of Ethiopian smallholder farms, the study has developed farming-system- and location-specific poverty and food security indicators which can provide guidance for more targeted strategies to reduce rural poverty.