The goal of this study is to model the impact of land use system.The covariance structure of the land use variables is used to study the linear structural relations among the model variables. The covariance matrix of the model is used to test whether structural equations model is overidentified or not and that consistent with the observed data that was obtained from the Agriculture Department of Gamo-Gofa Zone and collected since 2005. The confirmatory factor analysis of this study shows that increase of soil erosion or climate change effect lead to decrease in forest and bush land coverage and change fertility of land. Thus, new crop land demands have been increased and implemented through deforestation. Forest and vegetation cover in Gamo-Gofa depleted alarmingly, and as a result soil erosion and climate change rate speedy. This decline was caused by intensive use of land through deforestation, overgrazing, clearing trees and grasslands to take it under cultivation. We advocate the planning and management of land resources that is integrated and holistic with awareness of land users. This will ensure the long term quality of the land use system.