The focus of this paper is the role of farm forestry in farming systems in the NSW wheatsheep zone. The wheat-sheep zone suffers from significant land degradation problems, and the environmental and economical sustainability of many farming systems is in question. Farm forestry provides the opportunity to diversify farmer incomes, increase agricultural productivity and provide environmental solutions. It is therefore proposed that the potential role of farm forestry in the wheat-sheep zone is to provide an environmentally and economically sustainable future for farming systems, through tree planting for multiple benefits. A general model is developed for the purpose of economic analysis of agroforestry systems in the wheat-sheep zone using a bioeconomic approach.