In the Horn of Africa Drylands (HAD) conflict over water and vegetation is prominent. Additionally, large-scale land acquisitions (LSLAs) are increasing the competition of water, putting local communities at greater risk. A key impact of increasing LSLA's is the decrease in water and land availability for vulnerable agropastoral communities. Despite recent studies, there is still a lack of research that includes the influence of upstream-downstream dynamics on drought risk and impacts of agropastoralists. Therefore, this study further develops an agent-based model (ADOPT-AP) to investigate how upstream large scale commercial farms influence downstream drought risk and impact of agropastoralists in the Upper Ewaso Ng’iro catchment in Kenya. After the model has been calibrated and validated, we assess how commercial exporting farms affect drought risk and impact of downstream communities by simulating different scenarios where the farms are replaced by agropastoral communities or forests. Our results show how both drought hazard characteristics and impacts differ among these scenarios. The analysis shows that in the scenarios where these farms are replaced by forests or communities, drought conditions are alleviated by increasing soil moisture, streamflow, and groundwater tables. These improvements are linked to reduced water abstraction and increased infiltration, benefiting downstream communities by decreasing the distance to household water, and increasing crop and milk production in times of dry periods. Policy interventions should prioritize equitable water distribution, regulation of water use, and promotion of sustainable agricultural practices to mitigate long-term impacts on water resources and community resilience.