Much of the hoped-for success of deep-rooted perennials in reducing the eventual extent of dryland salinity in Australia will depend on the farm-level economic performance of the available perennial-based farming systems. A diverse range of factors contributes to this economic performance, including short-term production-related issues, dynamic factors, sustainability factors, risk factors and whole-farm factors, Although some examples of profitable perennial-based farming systems can be identified, they are limited to particular niches in particular regions, which tend to be higher rainfall regions. For the great majority of land that is at risk of salinisation, no profitable perennial plant options are currently available, The benefits of perennials for on-farm salinity prevention are likely to be of secondary importance in determining their economic attractiveness to farmers. A case study is presented for lucerne (Medicago sativa L.) in the southern region of Western Australia. Lucerne appears likely to be profitable in suitable environments, even without considering salinity-related benefits. However, further improvements to its economic performance are needed if it is to be adopted voluntarily on a scale that would address the bigger, catchment-level problems such as river salinity and flooding risk. Policy implications of these findings are discussed. (C) 2002 Elsevier Science B.V. All rights reserved.