The dynamics of phase farming in dryland salinity abatement

In Australia, soil salinisation has become a major concern. One way to deal with the problem is for farmers to plant trees or regenerate native bush. However, doing so raises several questions which involve optimal switching times, when switching involves a cost in the form of up-front investments. Optimality conditions are derived for the three-stage problem, and applied to dryland salinity control in Western Australia. Optimal management practices are found to be very sensitive to farmers' discount rates and to the speed at which the watertable rises or falls.