Agriculture has almost certainly contributed to the decline of native vegetation and wildlife in rural Australia. A prevalent culture supports agricultural systems that rely on the use of exotic plants and animals and greater use of chemicals and machinery. In general, these systems do not fully utilize or take account of the indigenous biota. The full implications of implementing such farming systems on a landscape scale are seldom considered. I use the grazing industry on the Northern Tablelands of New South Wales to illustrate two contrasting approaches: (1) "pasture improvement" involving replacement of native with exotic species versus (2) retention and management of existing native and naturalized pasture species. Pasture improvement has been refined by extensive agronomic research, plant selection and field testing of techniques. Nevertheless, the approach is losing support among farmers because of high inputs required to maintain "improved" pastures, the fragility of these pastures during droughts, low commodity prices, longterm declines in soil structure and increases in soil acidity. Other side-effects include tree decline, reduced diversity of indigenous herbaceous plant communities and loss of wildlife. Using native pastures may offer some solutions to these problems, but the level of understanding required to manage them effectively is limited. Exotic sown pastures have no clear advantage in areas with poor soils and irregular rainfall, and the environmental impacts of new developments involving large-scale pasture improvement can be unacceptable. I conclude that native and naturalised pastures are the best option for most of the region and sown pastures should be used strategically.