Using watershed as a context, this paper seeks policy solutions to the agricultural-related externalities observed across communities as a result of climate hazards and aggravated by improper land use practices. The authors used both primary and secondary data to analyze the trends in land cover and land use, water supply variability and its impact on crop production, and the corresponding community adaptation strategies in the study watershed. Results show that forest land conversion gave way to intensive upland agriculture. This land use, however, was observed to create frequent flooding in the low-lying areas destroying rice crops. Authors recommend a watershed development plan that contains assignment of forest reserves, purely agricultural areas, built-up areas, and other land uses that will not be harmful especially to the lowland areas that suffer from flooding and siltation.