Abstract
In this research, authors analyzed issues for implementation of payment for watershed service in the field level, using case study of Cidanau watershed, Indonesia. In Cidanau watershed, the Water Company made contract with farmers groups and provide fund for rehabilitation and conservation of forest. Two farmers group was organized for this scheme, but one of the groups violated the contract and contract was cancelled. Through the comparative study of activities of two farmers group, it become clear that the conditions which make farmers group to work properly and contribute to forest conservation is appointment and education of appropriate leader, and development of trustworthiness among members.
