Governments of developing countries face the dual tasks of increasing agricultural productivity and ensuring sustainability of resources. The government of Ethiopia initiated a major rural development program in Tigray, Ethiopia ten years ago, called SAERT (Sustainable Agricultural and Environmental Rehabilitation), to change the decline in agricultural productivity and reverse local forest degradation. SAERT targets water resource development through the construction of regional public microdams, intended to bring irrigated agriculture to surrounding villages and improve household income. Through SAERT, villagers can choose to plant trees on public microdam sites, protected and monitored by the surrounding villages. Unfortunately, microdams may cause potentially serious side effects to human populations through water-borne illnesses such as malaria and schistosomiasis. This paper examines incentives for villagers in Tigray to plant trees for private use, in both villages with and without access to regional public microdams. In addition, we investigate the importance of health factors on the household decision to plant trees on household and public land.