With the introduction of biofuels a conflict newly remerges between cash crops, mostly for export, and food crops, mostly for food security. It is also feared that mo-no-cropping threatens the agro-ecology in developing countries impeding future food security. We seek coexistence minimizing negative impacts on productivity. We show how to model explicitly land distribution and transition through a dynamic approach containing large- and small-scale sectors competing for land and labour as stocks. We display short- and long-term effects on competitiveness of sectors and degradation potentials are addressed. Specifically skill and knowledge acquisition are modelled as dynamic processes beside soil fertility. Additionally transaction co-sts on land development are reckoned. Land transfer and food pricing are modelled as control variables and distinguished from stock variables incl. human capital and soil fertility. Yet control (policy) variables are land taxing and food subsidies. Soil fertility in smallholder farms is based on manure; biofuel uses imported fertilizer.