The Murray-Darling Basin faces increasing pressure on water quantity and quality. In 2006-07, salt interception schemes implemented as part of the Murray-Darling Basin Salinity Management strategy removed over 470,000 tonnes of salt from the water supply, reducing the salinity of water flowing to Adelaide by about 200 EC units. However, the costs of salinity mitigation schemes are increasing. With possible continuing declines in average inflows, costs of salinity and salinity mitigation are expected to increase even further in the future. In this paper, a state-contingent model of land and water allocation is used to compare alternative options for salinity mitigation.