Passage of the Watershed Protection and Flood Prevention Act has focused attention on the small watershed development program.' The strategic problems involved are those that center around management of land and water and the resulting effects on water runoff, soil erosion, and sedimentation. Significant among these problems are those of water-management, which require action by groups of landowners, communities, and local government. Not all small watersheds have significant interfarm problems. Some have problems that can be solved by individual farmers through land-treatment measures and practices. Floodwater retarding structures, levees, floodways, irrigation structures, drainage installations, gully stabilization, streambank control, highway stabilization, and revegetation of critical runoff and sedimentsource areas will be needed for watershed development. In planning and installing these types of measures, assistance is available under the Watershed Protection and Flood Prevention Act. This discussion is concerned with the legislative development of the program, its dependence on economic apprasial, and the economic research needed to make it fully effective.