The Asian financial crisis reached Thailand in 1997, causing a severe economic downturn and large job losses. As part of its national recovery plan, the Thai government adopted the principle of the "Sufficiency Economy" expounded by King Bhumibol Adulyadej. This aims to restore balance to Thailand's development, making the economy and society more resilient and adaptable. An important application of the Sufficiency Economy is in agriculture, long an engine of Thailand's growth and, during the crisis, a subsistence buffer for many jobless workers. The government launched the New Theory Agriculture Project in 1998 to promote self-sufficiency in farming through an integrated approach to land and water management. The project aims to create sustainable livelihoods for small farmers by providing them with their own water supply, technical advice, support for co-operative activities, and other resources. This study evaluates the costs and benefits of the New Theory project, based on a survey of participating and non-participating farmers in two provinces of Thailand. The study found that the project has helped small farmers reap more benefits from agriculture than their non-New Theory counterparts. Furthermore, the economic internal rate of return of New Theory farming is higher than that of non-New Theory farming, implying that government support for this initiative is an efficient use of public resources. The study also developed a set of 43 indicators to assess the sustainability of New Theory farming. This was tested at both provincial and national levels using data from the study survey and government surveys. The tests revealed that no region of Thailand performs well in every dimension of sustainability. However, a lack of data and standardised measurement procedures meant that some indicators could not be fully evaluated. Furthermore, the indicators focus on New Theory farming, so are of limited use in assessing other, conventional farming systems.