The clearing of land for agricultural purposes in the low rainfall areas of south-west Western Australia has resulted in soluble salts being transported from upslope recharge areas, through groundwater flows, to downslope discharge areas. Dryland salinity is not confined to individual properties. It may disperse among properties and catchments and is thus a common property problem. In an attempt to model the effect of natural resource utilisation and the divergence between private and socially optimal rates of land degradation resulting from the exploitation of common resources, a dynamic optimisation model of soil salinity has been developed. The objective of soil conservation models may not necessarily be to stop future degradation in its entirety, but to ensure that all resources are applied to their highest value combination of end uses, both currently and in the future (Morris et al, 1988). The model is also used to examine the steady-state solution to optimal control. In the case of dryland salinity, a steady-state equilibrium occurs when the hydrological balance is in equilibrium. Salinisation of dryland areas has been caused predominantly by the removal of high water-using, deep-rooted native forest, and its replacement with shallow-rooted annual crops and pastures. Agricultural expansion in the low rainfall areas of south-west Western Australia has modified the natural water balance, thereby affecting the volume and flow of surface and ground water. The resultant change in the hydrological balance of the soil brings rising water tables and stored salts to the surface, and evaporation causes these salts to be left behind.