Australian rural producers and other land managers are being encouraged, under the National Drought Policy, to be more self-reliant in the way they cope with their highly variable climate. The roles of models in implementing this policy are described. These include using statistical and General Circulation Models as the basis of improved seasonal forecasting, hydrological and agronomic models to monitor regional changes in soil moisture and vegetative cover, and Decision Support Systems to estimate the value of adapting management to take advantage of seasonal forecasts or of climate variability per se. A national research program was undertaken to study how agronomic models could be used to estimate the impact of drought on crop and grassland production, since only in the most exceptional droughts would rural producers be eligible for government support. Such models proved effective for evaluating droughts in specific locations, and are now being integrated with remote sensing and other data into Geographic Information Systems to aid regional assessment of drought. It was concluded that these tools provided a sound basis for improving the management of agricultural and other natural resources.