A Payment for Environmental Services (PES) scheme is defined by Mayrand and Paquin (2004) as a tool “to support positive environmental externalities through the transfer of financial resources from beneficiaries of certain environmental services to those who provide these services or are fiduciaries of environmental resources.” PES schemes can target water services, carbon sequestration and storage, biodiversity protection, watershed protection and landscape beauty. The case study area of the Fond D’or watershed in St. Lucia identifies and values existing watershed services. The Fond D’or watershed is the second largest, comprising of 10,230 acres with twenty-three per cent (23%) of the watershed in Government Forest Reserves. These Government forest reserves are located in the upper watershed while within the middle and lower watershed areas there are many activities including residential settlements, agricultural production (banana cultivation), forestry production, livestock production and ecotourism. This paper specifically focuses on the agricultural sector, mixed farming 24%, other intensive farming 32% and flatland intensive farming 8% which has significant environmental effects. Linking the valuation of these environmental services to a proposed PES scheme can be utilized to combat negative environmental practices and promote environmental sustainability. Further, this proposed PES scheme highlights the possible implications for farmers in terms of possible incomes, environmental practices and overall attitudes towards a change in practices.