This study integrates biophysical simulation data with a farm household model of intertemporal optimization, to investigate changing crop-livestock management practices in the Sudano-Guinean zone of Mali. Over a 15-yr time horizon we find that free grazing on the commons remains more attractive to the representative household than adopting more labor- and capitalintensive confinement systems, but that a relatively low level of pasture tax (around US$3 per livestock unit per year) would be sufficient to induce intensification. Because confinement raises output, the net cost of the tax to the household is only about US$1 per unit per year. Imposing pasture taxes to induce intensification could raise community welfare, if the value of commons resources liberated by reduced grazing pressure exceeds that level. © 1998 Elsevier Science B.V. All rights reserved.