This is the system of the highlands and mountains of Eritrea, Ethiopia, and Lesotho, and also to a small extent in Angola, Cameroon, Kenya and Nigeria. Average population density is high and average farm size is small (1-2 hectare). Cattle are numerous and are kept for ploughing, milk, manure, bride wealth, savings and emergency sale. Small grains such as wheat and barley are the main staples, complemented by peas, lentils, broad beans, rape, teff (in Ethiopia) and Irish potatoes. The main sources of cash are from the sale of sheep and goats, wool, local barley beer, Irish potatoes, pulses and oilseeds. Some households have access to soldiers' salaries (Ethiopia and Eritrea) or remittances (Lesotho), but these mountain areas offer few opportunities for local off-farm employment.

Major problems include soil fertility decline, in part because of a shortage of organic matter, and cereal production suffers through lack of inputs. Household vulnerability stems mainly from the risky climate: early and late frosts at high altitudes can severely reduce yields, and crop failures are not uncommon in cold and wet years. Agricultural growth potential is only moderate, but there is considerable potential to diversify into higher-value temperate crops.

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