The Ararat Valley is situated at an altitude of 800-950 meters above sea level. It stretches from northwest to southeast for 120 kilometers, it is 10=30 kilometers wide, and is a significant groundwater reservoir. Since the old days, the Ararat Valley has been regarded as a breadbasket of Armenia, and today it remains a major agricultural region in the country. Its climate is favorable for the cultivation of various crops, ranging from horticultural crops (peach, apricot, apple, pear, prune, cherry orchards) to cereals and root crops. Currently, in the Ararat Valley, land uses are linked with the enhanced development of fish farming, which requires artesian water in great amounts. Monitoring data show that groundwater storage has dropped by almost 60 percent while the artesian water withdrawal rate increased from 34.7 cubic meters per second (m3 per sec) to 80 m3 per sec. As a result of unsustainable management of the natural resources, the water level of the artesian basin has declined by 8-15 meters, and the groundwater level has gone down by more than 3 meters. This has brought about a number of adverse processes: the drainage of agricultural soils, increased irrigation depth, losses of soil organic matter, and so on. It should be noted that the artesian basin of the valley is the main and strategically important storage of potable water for the City of Yerevan as well; and the groundwater resources are a major regulating factor for irrigated agriculture and also for soil humidity conditions, which define soil fertility. The change in the soil moisture regime has led to soil aridization in some areas of the Ararat Valley (as of today, over 30 communities are left without water for irrigation), and emerging waterlogging in other areas, which are exposed to water discharges from fish ponds at lower altitudes. Thus the Ararat Valley faces a broad range of interrelated environmental challenges; and the most serious of these arise from poor water management. Such a conflicting situation brings together several stakeholders. The first is government entities, alarmed with the tangible threat of the depletion of the artesian basin, which is a strategically important source of potable water for almost half of the country. The second stakeholder is comprised of arable farmers in the Ararat Valley: they adhere to ancestral traditions of vegetable, fruit, and grain growing, but now they are losing their fields and orchards as a result of their draining and impaired fertility. The third stakeholder group consists of fish farmers: the valley alone harbors over 300 operating fish farms. This is a fairly successful and profitable sector. Owing to the high quality of the fish they produce, it is in great demand in the Russian Federation and other countries; therefore, about 20-30 percent of the output is exported abroad. It is quite natural that fish farmers are keen to expand their operations. The fourth stakeholder group is nature conservation organizations, warning that the entire ecosystem, generated by nature and man, is entering a stage of degradation in the Ararat Valley, and unless this process is stopped, desertification will deprive the country of its once-abundant breadbasket and food security stronghold. How to arrest the process and attain sustainability? There seems to be no one clear-cut solution, but rather a broad range of coherent actions. First, it is necessary to: (i) cause the water withdrawal from the artesian basin to be drastically reduced, (ii) forbid (at least temporarily) the drawing of water from artesian wells that are not flowing any longer (as a result of dropped internal pressure); (iii) revise the quotas and rates of respective financial taxes payable by fish farmers; (iv) equip fish farms with water purification systems as soon as possible in order to introduce closed or semi-closed water consumption cycles; (v) retrofit or upgrade the interception and drainage systems to prevent waterlogging; (vi) consider an opportunity to use discharged water for irrigation purposes; (vii) introduce up-to-date water-saving drip irrigation practices in crop farming; (viii) forbid landowners to use their fields and orchards for purposes other than those for which they are designated to avoid rapid soil fertility losses; (ix) explore whether it would be appropriate to revive the Soviet practice of quite effective alternate uses of the same land areas for crop cultivation and fish ponds (two to three years for each use); cause nature conservation groups to consider the opportunity of giving the Ararat Valley ecosystem a status that would enable regulation of its land uses in a more purposeful and strict manner; and (x) advise the country's government to develop and adopt a targeted government program aimed at optimizing the environmental and economic situation in the Ararat Valley. The main objective of this case study is to highlight the problem of the underground water storage decline in the Ararat artesian basin, arising chiefly from the intensified fish farming; and use the available information to propose and analyze possible policy and economic options of addressing the problem in a fully participatory manner, in order to ensure food security.