Farmers who live in fragile tropical hillsides often operate under severe resource constraints and face difficult tradeoffs when confronted with changes in production conditions. Using a bioeconomic linear programming model, this study simulates the effects of population, market, and technological changes on farmers' income and on their management of the natural resource in a hillside area of Central Honduras. The results show that economic growth and agricultural intensification are not necessarily adverse for fragile environments. In fact, farmer incomes would be much lower and degradation much higher if intensive agriculture had not been adopted. Such a result, however, must be framed within a complex set of conditioning factors, among which agroecology plays a fundamental role. Although the economic advantages of horticultural production are clear in the area studied, this strategy is not suited for all contexts. This report offers a series of policy recommendations that implicitly recognize such limitations, thereby helping to direct resources where they will have their greatest impact.