Well-intended natural resource policies that ignore the complexity of socio-ecological systems too often threaten local values and opportunities for sustainable development. Upland areas throughout Indonesia provide examples of complex socio-ecological systems experiencing rapid socio-economic and environmental transformations in response to interactions between development policies and local agendas. Broad natural resource policies influence socio-ecological systems in different ways. In some cases, there are converging national and local goals, while in others the goals of national policy conflict with local aspirations. This study (...) identifies how broadscale policies could respond to the unique characteristics of upland areas to optimise development outcomes and avoid unintended risks for people and the landscape. The theory of reflexive modernity is utilised to illustrate how two national policies, the Community Forestry initiative and the Irrigation Reservoir program, largely discount the complexity of local values in the uplands of Pagar Alam, Indonesia. We identify local farmer aspirations through an analysis of development narratives and relate how they are impacted upon by the two policies. Our findings indicate that dominant development goals and associated sustainability pathways diverge in a range of ways from local farmer values and aspirations. We suggest that policymakers take more consideration of four interacting elements, namely: local ecological traits; local values and institutions; the multiple development pathways; and exogenous market drivers that affect local development, to promote sustainability and increase the likelihood of achieving all desired policy outcomes. (shrink)