Demand for water in Australia is increasing along with growing pressure to maximise the efficiency of irrigation water use and seek additional and alternative irrigation supplies. The scarcity of water supplies coupled with the need for urban communities to dispose of large quantities of treated recycled water from sewage treatment plants has led to increasing interest from urban and rural communities in the reticulation of this water for irrigating adjacent crop-production areas. Proposals to use recycled water inevitably lead to a complex range of issues that need to be addressed, including:

Simulation models can capture many of the key factors and processes influencing irrigated crop production systems, and can play a useful role in exploring these issues. In this paper, we have described an approach that couples agricultural production system and economic models in a way that enables analysis of the likely benefits and risks of investing in recycled water, although the analysis is equally relevant to any assessment of the value of an additional source of irrigation water, particularly saline water. The approach has been illustrated with a case study of a mixed-crop farm in the Darling Downs region of Queensland, Australia, in which the farm-scale crop production, economic, and environmental implications of investing in recycled water were considered.