Timber and water runoff are joint forest products, and augmentation of runoff can occur when timber harvest uses smaller but costlier cut blocks. If runoff from a forested catchment area drains into a water-scarce region, then this interesting question arises: how best can harvesting in the catchment area be tailored to increase runoff to the water-scarce region? To examine the economics of joint production for a forested area in Canada, a linear programming model maximizing net present value of timber production and water runoff is run for three block sizes. Including a moderate or high value for water runoff leaves the optimal harvest pattern unchanged and does not cover the additional costs of smaller blocks. Yet, smaller blocks yield other benefits to society which, if valued monetarily, might make them preferred. To realize the benefits of smaller blocks would likely require public sector involvement for devising institutions/contracts linking the user of increased runoff with the harvester whose practices are modified.