Abstract Land degradation by soil erosion in the biomass-starved foot-hill ecosystem of the sub-tropical northern India promted us to study the production and conservation potential of two agroforestry systems (AFS) namely (i) Leucaena leucocephala (K-8) for fuelwood at 2 m × 2 m spacing in upper and Leucaena (El Salvador) at 0.5 m × 0.5 m spacing for fodder in lower canopy (LL), (ii) Leucaena as above in upper and napier grass ( Pennisetum purpureum) for fodder in lower canopy (LN). These were compared with (iii) the traditional rainfed crop sequence of sesame followed by rapeseed (SR) and (iv) an absolute control of cultivated fallow (CF) on 20 m × 8 m uniform runoff plots having a 2% slope and a typical light-textured eroded gravelly soil (Udic Ustocrepts). The 3 years (1986–1988) mean monsoon season runoff with 816 mm rainfall was 4.4, 11.2, 20.5 and 23.0%, soil erosion loss 0.28, 1.03, 2.69 and 5.63 tonnes, N loss 6.6, 19.5, 42.5 and 51.3 kg and K loss 1.2, 1.8, 3.0 and 5.0 kg·ha −1·yr −1, from LN, LL, SR and CF, respectively. The soil profile of SR indicated a net deficit of 15, 2 and 14 kg but that of LN and LL a gain of 38, 10 and 20 kg and 66, 26 and 57 kg·ha −1 of available N, P and K in 4 years. The AFS were more conservation effective than traditional crops on eroded marginal soil and hence suggested for inclusion in the basket of conservation technologies.