This paper attempts to define the income-increasing alternatives open to dairy farmers in a sub-tropical dairying area, and develops optimum plans from a "long-run" linear programming model. The results indicate that intensification, based on tropical pastures, is the appropriate development strategy for dairy farmers in this area, and that substantial increases in production are possible. Present lending policies of trading banks would provide adequate finance for farm development to a farmer who has high equity. It would appear that a substantial change from traditional attitudes towards dairying will be necessary before full advantage can be gained from the new pasture species available.