Agricultural development policies can boost productivity and profits but also lead to adverse consequences when natural resources are exploited unsustainably, particularly in systems vulnerable to drought and climate change. This study provides a novel, comparative upstream-downstream assessment of land-use evolution in Morocco's semi-arid Chichaoua region under national development policies, particularly the Green Moroccan Plan, by integrating multi-source remote sensing. Chichaoua offers a peculiar case where newly-cultivated land upstream of a historic irrigated area facilitates a straightforward evaluation of policy-related land and water use changes. The upstream zone, previously unexploited, relies on boreholes, whereas the downstream area has historically depended on natural springs for traditional irrigation. Utilising Sentinel-2 and Landsat imagery and ground data from 2023, a Random Forest model was employed for crop-classification over 23-years (similar to 2000-2023), and land-use transitions were analysed through transition matrices. Total irrigated area doubled, increasing from similar to 2871 to similar to 6569 ha, but with stark contrasts between the zones. Upstream areas expanded by +4000 ha, featuring 22% cash-crops and 41% olive trees, while downstream zones witnessed a 40% decline in olive cultivation. National policies offering grants and improving land and water access are correlated with shifts toward cash-crop-focused farming upstream, potentially fuelling productivity gains. However, this transformation appears to be associated with reduced natural spring availability, potentially undermining traditional downstream agriculture. This dual impact highlights both the benefits of increased agricultural productivity and the challenges of resource depletion and threats to traditional farming. The findings reveal critical trade-offs between agricultural gains and environmental risks in vulnerable regions.