Because of an increasing demand for animal-source foods, an increasing desire to reduce poverty and an increasing need to reduce the environmental impact of livestock production, tropical farming systems with livestock must increase their productivity. An important share of the global human and livestock populations are found within smallholder mixed-crop–livestock systems, which should, therefore, contribute significantly towards this increase in livestock production. The present paper argues that increased livestock production in smallholder mixed-crop–livestock systems faces many constraints at the level of the farm and the value chain. The present paper aims to describe and explain the impact of increased production from the farm and farmers’ perspective, in order to understand the constraints for increased livestock production. A framework is presented that links farming systems to livestock value chains. It is concluded that farming systems that pass from subsistence to commercial livestock production will: (1) shift from rural to urban markets; (2) become part of a different value chain (with lower prices, higher demands for product quality and increased competition from peri-urban producers and imports); and (3) have to face changes in within-farm mechanisms and crop–livestock relationships. A model study showed that feed limitation, which is common in tropical farming systems with livestock, implies that maximum herd output is achieved with small herd sizes, leaving low-quality feeds unutilised. Maximal herd output is not achieved at maximal individual animal output. Having more animals than required for optimal production – which is often the case as a larger herd size supports non-production functions of livestock, such as manure production, draught, traction and capital storage – goes at the expense of animal-source food output. Improving low-quality feeds by treatment allows keeping more animals while maintaining the same level of production. Ruminant methane emission per kg of milk produced is mainly determined by the level of milk production per cow. Part of the methane emissions, however, should be attributed to the non-production functions of ruminants. It was concluded that understanding the farm and farmers’ perceptions of increased production helps with the understanding of productivity increase constraints and adds information to that reported in the literature at the level of technology, markets and institutions.