Policies that target poverty reduction are often at odds with environmental sustainability. Assessing magnitudes of trade-offs between improved livelihoods on one side, and forest cover on the other, is important for designing win-win development policies that may help to mitigate climate change. I use a mix of panel data for 670 villages over a 10 year period, and combine it with historical land records and grey literature, to understand the drivers of deforestation within reserved forests of Thailand -an area where smallholder ethnic tribes are located. Given that reserved forests are the last bastions of forests in Thailand, examining what drives land clearing within these areas is important. I combine econometric findings with qualitative reports to infer that (i) it is important to measure the differential effects of policies on different crops, agricultural intensity and the agricultural frontier; and (ii) within forest reserves, policies that encourage cultivation overall may not be detrimental to forest cover after all. This has important implications for evaluators and policy makers.