INTRODUCTION In the final days of October 1998, Hurricane Mitch unleashed an apocalyptic rampage of floods and mudslides that wreaked havoc on Honduras, Nicaragua, Guatemala and El Salvador, causing 9000 deaths and US$6 billion in damage (Smyle, 1999; see also Bonell, Callaghan, and Connor, this volume). Once the floods subsided, people throughout the region began asking why the storm had sown such great destruction and how they could prevent future catastrophes. Press reports, public officials, environmentalists and international agencies claimed deforestation had greatly magnified the damage. To make the region less vulnerable to disasters they proposed greater support for reforestation, soil conservation and civil defence. ‘Watershed management’ and ‘vulnerability’ became watchwords. The agencies practically fell over one another to see who could invent more initiatives with those words in their titles. Hurricane Mitch put watershed (river basin and/or catchment) degradation firmly on the Central American political landscape. Nevertheless, public concern about the problem had been growing steadily since the 1970s. News stories and consultant reports claiming that sediment was clogging up the region's dams, rivers and coasts had caused consternation in policy circles. Non-governmental organisations (NGOs), the media and others had convinced much of the public that deforestation had exacerbated seasonal water shortages by increasing surface runoff and reducing rainfall. Many agencies had set up reforestation, soil conservation and protected area projects in response to these concerns. Recent interest in payments for environmental services has further fueled enthusiasm for catchment management.