Environment flow policies introduced by the New South Wales Government are aimed at improving and maintaining sustainable river systems. A combination of economic and hydrological simulation modelling was used to assess the impacts on agriculture from the implementation of different flow scenarios in the Murrumbidgee Valley NSW. These impacts were determined by quantifying the difference in agricultural returns between the base scenario and different environmental flow scenarios. The agricultural impact from the introduction of Year 1 (1998-99) environmental flow rules was estimated at $4.08 million or 2.8% of the base case gross margin for that year. Impacts were found to vary significantly across zones, largely depending on the level of development in each zone. The total regional impact of agricultural impacts of Year 2 (1999- 2000) flow rules was $2.81 million, which is around 1.9% of the base regional gross margin for that year (IFS).