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Biological diversity in cradle areas of crop origins has been an important source of genetic resources for world agriculture. The loss of biological resources in agricultural systems due to the introduction of high-yielding varieties is a potential cost of agricultural development. Our econometric analysis using data from Peru indicates that the adoption of high-yielding potato varieties results in a reduction but not a complete loss of biological diversity on individual farms and a possible loss in aggregate diversity. We conclude that on-site conservation of seed resources may be a viable complement to the off-site methods now in place.