Soil erosion poses a serious threat to agricultural production in developing countries, especially in regions such as the Andes, where soil erosion is widespread and affects the livelihoods of farm households. Despite considerable program efforts to promote soil conservation practices among farm households, the uptake is often disappointing. Often these practices are not cost-efficient for the farm households. To counteract the lack of benefits, natural resource management programs intervene by providing households with direct incentives to promote soil conservation practices. The use of direct incentives is criticized, however, because farm households tend to abandon soil conservation practices once the program withdraws its assistance. The situation in the Andes is further complicated by the limited productivity of agriculture and by market failures. As a result, farm households have little interest in investing in agriculture. Although soil conservation practices have the potential to increase agricultural productivity, farm households cannot convert these benefits into income, and this situation explains farm households' resistance to these practices. In this case study, the main stakeholders are the users of the land—that is, the farm households— and the society (represented by the government). Two government programs, PRONAMACHCS and MARENASS, are promoting soil conservation practices throughout the Andes. These programs are not sufficient, however, to guarantee sustainable natural resource management, and they should be supported with agricultural or development policies. Several policy options are being considered to improve rural livelihoods and promote natural resource protection. Your assignment is to design a policy for natural resource protection in the Peruvian Andes, focusing on soil conservation in particular, within a rural development strategy.