|Abstract||Although sugar is produced in the some of the most humid regions of Australia, water remains a major limitation to production. Experience in other rainfed and irrigated production systems in Australia has shown that use of both surface and ground water resources can easily have long term impacts on future productivity of the system. There is no reason why the sugar industry should be exempt from the consequences of ignorance or mismanagement in regard to the hydrological cycle. At the outset of this project, it was clear that efficient use of water (both rainfall and irrigation) was central to profitable and sustainable sugarcane production. Maximum profitability in fully-irrigated systems required the application of water to match crop water requirements for cane and sucrose production, as moderated by climate and management inputs. Under supplementary-irrigation, the timing of water application in relation to growth stage and climatic conditions was thought to be critical for maximising the economic benefit from a limited water resource. In rainfed systems, profitability could be maximised, by matching management inputs to the production potential and production risk as determined by rainfall variability in different climates. During the life of this project, there has been increased public awareness of water as a production factor and more importantly as a national resource and major component of a fragile environment. The National Agenda for Water Reform has moved in the direction of full recovery of water supply cost, separate water and property rights, specific water allocation to the environment and increased water use efficiency in agriculture. A new initiative on water use efficiency has been launched by DNR who have asked the sugar industry to make 60,000 MI available for irrigation from existing water resources. The products ofCTA016 are therefore highly pertinent for the current focus on water use in the Australian sugar industry. Radiation and temperature as key sugarcane production factors were the subject of SDRC Projects CTA004 and CTA012. These projects have led to a better understanding of the processes of yield and CCS accumulation under conditions of high water and nutrient inputs. Limits to yield in terms of these climatic factors have been identified. Crop growth mechanisms driven by radiation and temperature have been established and captured in mathematical expressions which were necessary for the development of the Sugarcane module now in use within the APSIM modelling environment. In CTA016, the strategic research approach of the earlier projects was extended to water as production factor. Water has of course been extensively researched in the sugar industry largely from the perspective of irrigation requirements. CTA016 was designed to build on past research by going into more detail in order to improve our knowledge of the soil-plant-atmosphere continuum of water. Knowledge of the mechanisms identified as important have been formalised mathematically and incorporated into the APSIM-Sugarcane modelling environment. This project has thus augmented the output from the earlier projects by adding the water balance and crop response to water stress to modelling capability. This capability was then used extensively in developing practical guidelines for saving water during drying off and during early stages of development. This modelling capability was also tested and used in a later more applied project (CTAOI8) to facilitate more efficient use of limited water supplies under supplementary irrigation.