Current trends in demography, agricultural production and rural environment in the developing countries suggest that so-called "marginal lands" must play a larger and probably growing role in food supply and economic development for the foreseeable future. To fulfill this critical role, public policy towards these lands needs to be revised. A key policy focus should be to strengthen incentives for local land users to not only maintain, but to improve the natural resource base for food and fiber supply. Such "land-improving investments" are needed to reduce production and subsistence risks and permit more intensive use without degradation.