Slash-and-burn rice production systems in the hilly areas of Laos have changed little over the past decades except for a reduction in the fallow period which has caused a tremendous increase in labor requirements for weed control. From 1950 to 1990, the population density increased from 7.6 to 17.6 persons/km217.6 persons/km2 , fallow periods decreased from 38 to 5 years, and weeding requirements increased from 1.9 to 3.9 weedings/rice crop. Because of high requirements for weeding, the return to labor is only 5 kg rice/labor day for slash-and-burn systems compared with 13 kg/day in lowland rice production. Soil organic C levels are declining fast, with losses of 5 t/ha observed during a single rice crop. Improvements of the living standard of the farm population, food security, stabilization of upland agriculture, and increased rice production are the main objectives of development agencies working in hilly areas. However, the options available are limited by the market opportunities and there is little chance that any of the technologies offered will be adopted on a significant scale. Hill farmers have a comparative advantage for livestock and timber production but generally lack the necessary resources to make long-term investments in either operation. Market, credit opportunities, and land tenure are key factors affecting the direction of future hill agriculture in Laos.