In this chapter, using household data on potato producers in Cajamarca, Peru, the relationship between rural development and potato diversity is examined. Much of the debate on in situ on-farm conservation of crop genetic resources has focused narrowly on the effect of the introduction of modern varieties on crop genetic diversity. The introduction of modern varieties is only one mechanism by which rural development processes may bring about a change in crop biodiversity on farms. The greatest threat to the on-farm diversity of staple crops in developing countries is that farmers will cease to grow these crops altogether. In particular, rural development is likely to bring about opportunities in new agricultural products, which cause shifts in land use patterns, to lead to alternative labour uses including employment in non-agricultural activities and to improve the ability to manage risk through more effective means than variety portfolios. The results indicate that households who are more involved in activities other than potato production, in particular dairy production and non-farm activities, have less potato diversity. This suggests that any rural development strategies that promote alternatives to potato production may reduce its diversity on farms.