The Liverpool Plains in the north western slopes of New South Wales are a highly fertile cropping area. Groundwater levels are rising in the catchment and the emerging soil salinisation is increasingly affecting agricultural productivity. This trend is expected to continue unless land use methods that reduce accessions to the groundwater are adopted. A catchment model to determine the economic costs and benefits of the management of dryland salinity is proposed in this paper. This research is part of an interdisciplinary project that will incorporate data and other modelling work currently being undertaken by a number of different agencies including ABARE, AGSO, CSIRO and CaLM. The Liverpool Plains in the north westenl slopes of New South \Vales are a highly fertile cropping area. Groundwater levels are rising in the catchment and the emerging soil salinisation is increasingly affecting agricultural productivity. This trend is expected to continue unless land use methods that reduce accessions to the groundwater are adopted. A catchment model to detennine the economic costs and benefits of the management of dry/and salinity is proposed in this paper. This research is part of an interdisciplinary• project that will incorporate data and other modelling work currently being undertaken by a number of different agencies including ABARE, AGSO, CSIRO and CaLM. The Liverpool Plains in the north westenl slopes of New South \Vales are a highly fertile cropping area. Groundwater levels are rising in the catchment and the emerging soil salinisation is increasingly affecting agricultural productivity. This trend is expected to continue unless land use methods that reduce accessions to the groundwater are adopted. A catchment model to detennine the economic costs and benefits of the management of dry/and salinity is proposed in this paper. This research is part of an interdisciplinary• project that will incorporate data and other modelling work currently being undertaken by a number of different agencies including ABARE, AGSO, CSIRO and CaLM. The analysis will use a farm level mathematical programming model which will be embedded in a catchment model that incorporates groundwater movement. Management differences across the catchment will be represented by different farm submatrixes. The catchment-scale dimension of dryland salinity will be modelled by establishing spatial and temporal hydrological linkages between model farms. This will allow for a quantitative analysis of policies that are designed to rectify the externalities associated with managing the water balance of catchments. This work is undertaken as part of the National Dryland Salinity Management Program.