Agricultural land use is a key interface between the goals of ensuring food security and protecting biodiversity. “Land sparing” supports intensive agriculture to save land for conservation, whereas “land sharing” integrates production and conservation on the same land. The framing around sparing versus sharing has been extensively debated. Here, we focused on a frequently missing yet crucial component, namely the governance dimension. Through a case‐study in Ethiopia, we uncovered stakeholder preferences for sparing versus sharing, the underlying rationale, and implementation capacity challenges. Policy stakeholders preferred sparing whereas implementation stakeholders preferred sharing, which aligned with existing informal institutions. Implementation of both strategies was limited by social, biophysical, and institutional factors. Land use policies need to account for both ecological patterns and social context. The findings from simple analytical frameworks (e.g., sparing vs. sharing) therefore need to be interpreted carefully, and in a social‐ecological context, to generate meaningful recommendations for conservation practice.