The process of change described in this paper suggests that public programs, although well intentioned, can deprive a region of its comparative advantage in a key economic activity. Adjustments to the decline in common property resources in Rajasthan, India suggest the directions that will characterize the future of livestock farming in the region. Further reductions in the size of livestock holdings and changes in their composition are likely to occur due to the continuing shrinkage and degradation of common property resources. The decline in the number of cattle and unproductive animals and the increase in the emphasis on sheep and buffalo raising suggest that this has already begun to happen. Another likely consequence is increased dependence on stall feeding of cattle and a greater incidence of seasonal outmigration of sheep. Another conclusion relates to the future of common property resources in general. A strong case is developed for protecting and developing common property resources, since they promote the economic activity best suited to the natural resource base of a region, sustain the rural poor, and ensure the use of arid lands according to their capabilities. In order to reverse the trends illustrated in this paper, a government strategy is needed. This strategy should consist of a strict ban on futher curtailment of common property resources through privatization; regulated use of common property resources, achieved by introducing some element of private cost for the users; and designation of common property resources as a source of revenue for the Panchayats, to induce them to conserve and systematically manage them as a productive resource.