This paper investigates the economic value of nitrogen fixation in a Mediterranean-type farming system in Western Australia, as well as a general approach to such an investigation. The method uses linear programming and is exemplified by the MIDAS model developed in Western Australia. MIDAS is an optimisation model that describes key bioeconomic interactions at the paddock and whole-farm levels. The value of nitrogen thus depends on its capacity to generate farm profits. The value of fixed nitrogen then depends on the economic value of the fixation agent (typically a legume) and its place in the farming system, on the proportion of fixed and applied nitrogen in the system, and on the bioeconomic interactions between the two forms of...