The ways in which people use land tends to follow economic motivations
. Environmental considerations are often ignored until resource degrad
ation reaches the stage of economic significance. Environmental side-e
ffects of land-use activities are not confined to the area where they
apply. In the case of agricultural land use, the way in which farmers
use their land may impact on the profitability of neighbouring propert
ies, other properties in the region, and the welfare of the wider comm
unity. The question arises as to which land-use practices would be fin
ancially viable for the farms as well as ensure environmental sustaina
bility of agricultural land use. This paper outlines the framework of
SMAC, a modelling tool that is being developed to analyse the economic
and environmental sustainability of land use in catchments. It uses a
spatial optimisation approach in a dynamic context. The methodology i
s applied to the Liverpool Plains catchment in northern New South Wale
s, Australia. Here, rising saline groundwater tables cause extensive s
oil salinisation. The underlying hydrological imbalance has been trigg
ered by European-style land-use practices. The conceptual approach of
the model combines farm behaviour and catchment response as two proces
s levels. It seeks to provide assistance in developing a land-use stra
tegy for sustainable agriculture in the catchment and provides a tool
for assessing the implications of policy changes to enhance the proces
s. Copyright (C) 1996 Elsevier Science Ltd.