The ecosystem in the Zagros region of Iran, where this study was conducted, is characterized by joint occurrence
of trees and grasses. Here multiple-use of forest and livestock is a common practice followed by the local people.
This study develops a deterministic non-linear dynamic programming bio-economic model at a village level to
analyse the possible implications of such a management regime over a period of three and a half decades into
the future. Required data were obtained from field surveys and secondary sources. The model was run under
four alternate management regimes represented by model scenarios. Comparison of “business as usual”, “no
goat” and “no sheep” model scenarios brought out that combining forest resources and livestock will not only
be mutually beneficial but will also improve villagers' welfare. The results showed that state policies, like imposing
ban on goat and sheep husbandry, are important in influencing area under different land uses. Sensitivity
analysis highlighted the role of economic factors, e.g., prices of milk and meat and discount rate, ecological conditions,
e.g., grass productivity and fire parameters in affecting the traditional forest management, land use and
local community's welfare.