Soil salinisation and waterlogging are significant problems in the Irrigation Areas and Districts of southern New South Wales. Various actions can be taken at either a regional or farm level to alleviate these problems. District surface drainage, sub-surface drainage, pumping from deep aquifers and changes to water pricing policies are regional options, while possible on-farm options include laser controlled landforming, pumping groundwater from shallow aquifers, recycling drainage water, changes to crops and rotations and the adoption of improved irrigation systems. The purpose of this study was to analyse the agricultural benefits of a surface drainage scheme proposed for an Irrigation District in the Murrumbidgee Valley. The objective of the analysis was to determine overa 30 year period the change in present value of district net farm income anributable to the surface drainage scheme. The study differed from other economic assessments of the losses due to salinity and waterlogging in that it accounted for farmers' adjustment processes. A regional linear programming model was developed which determined the optimal mix of agricultural activities in any year, subject to the level of soil salinity and waterlogging.