Despite intense population pressure, arable land is often underutilised in tribal areas. Conversely, grazing resources are often overutilised. Supply response to price incentives in inelastic as the potential gains to farmers are limited by small farm sizes. A land rental market could improve efficiency in farming and also has equity advantages. Institutional changes are needed to encourage land rental. Overstocking occurs primarily because grazing land is a common property resource. Unlike most solutions to overstocking (e.g. cattle taxes and quotas), privatisation of grazing land would also improve the incentive to upgrade her and pasture quality. It is recommended that private access to grazing be encouraged in areas where it is more acceptable to households.