In recent years, there has been both more widespread evidence of the declining health of many of NSW’s rivers as a result of increased irrigation extractions and increasing community concerns about environmental issues. This has led to a greater focus on the need to re-balance in-stream and consumptive uses of water. In NSW, the issue is being approached mainly through the introduction of environmental flow rules across regulated catchments with the nature of such flow rules determined by community based Water Management Committees within an overall framework set by Government. A key issue in deciding on appropriate environmental flow rules is not only the ecological benefits that arise but also the trade-offs associated with re-allocation in terms of reduced production from irrigated agriculture. This paper looks at the nature of this trade-off in the Murrumbidgee catchment. A combination of linear programming and hydrology simulation modelling is used to assess the impacts on agriculture from the implementation of environmental flow rules as developed by the Water Management Committee for the Murrumbidgee Valley.