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grading a yard

We have a cabin in pine Az. where when it dose rain I have runoff from my neighbors yard onto mine and then down to the front and then the street.The ground is so dry that the top of the rocky ground is powdery and it shifts with the rain.Can I make a cloth like rope filled with pine needles,unlimited supply,to step down the grade and slow down the runoff.If this is possible I can try to plant desert grass to help prevent erosian.Any good books to help me with this problem would be appreciated.

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