Farm-level analysis of trade-offs between soil fertility management alternatives is required to improve understanding of complex biophysical and socio-economic factors influencing decision making in smallholder farming systems and to identify opportunities for improving resource use efficiency. A farm characterization (IMPACT) tool linked to a generic (Household) optimization model was used to evaluate resource use on farms in contrasting wealth categories. The Household model optimized farm's gross margins taking into account productivity of crops and livestock, off-farm activities and food sufficiency. Alternatives for management of nutrient resource were simulated using APSIM for the crop production and RUMINANT for the livestock component. The output from the simulation models was fed into the Household model and evaluated within the biophysical and socio-economic boundaries of the farms. Analysis of the performance a poor farm by IMPACT produced a yearly negative net cash balance of US$ -7, mainly due to negative returns from the cropping system. The farmer relied on donated food and fertilizers. The cash balance was negative, even though she also sold labor to generate income. The net income balance on the poor farm would be increased to US$81 and N balance from 7 kg ha-1 to 10 kg ha-1 by expanding the area allocated to groundnut from the current 5% to 31%. This would, however, generate a huge demand in labour (46-man days more) and reduce the P balance from 0 to -1 kg ha-1. Maize would be managed more efficiently on the poor farm by cultivating a smaller, well-managed area. A wealthy farm under a maize-dominated cropping system had a net cash balance of US$210, mainly from sell of crop products. Under current resource management, the net cash balance would be increased to US$290 by optimization of diet. The net cash balance for the wealthy farm would be further increased to US$448, and nutrient balances by 271 kg N ha-1 and 30 kg P ha-1 by expanding the management strategy where maize was grown with a combination of cattle manure and ammonium nitrate. To do this, the farmer would need to source more manure (or improve capture and the efficiency with which nutrients are cycled through manure) and invest in 110 man-days extra labour. Expansion of the area grown to groundnut without fertilizer inputs to a third of the farm reduced net cash balance by US$11 compared to the current crop allocation due to poor groundnut yield. This also increased labor demand by 155 man-days. Groundnut intensification on the wealthy farm would be more economical and labor-effective if a small area is grown with basal fertilizer. Despite reducing nutrient balances for the arable plots, feeding groundnut residues to lactating cows increased net cash balance for the current year through increased milk production.