Soil erosion is one of the major soil degradations globally which treats sustainable agriculture. It is also reported as a severe problem in Iran. To avoid soil degradation and ensure sustainable watershed management, coordination among stakeholders in a watershed is required. They have often conflicting interests of environmental protection and economic goals. Local communities are mainly interested in the economic benefit of natural resources while authorities aim to preserve these resources and ensure that they are managed sustainably. Thus, watershed management in Iran involves two layers decision makers. This study makes use of optimization techniques and explores the conflict between economic and environmental goals in context of a watershed in Iran.