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1. Land degradation in non-equilibrium rangelands may be defined in terms of loss of resilience and is linked with lower economic productivity through reduction in forage consumption by stock.

2. Loss of resilience may be represented by lower water use efficiency and increased tree and shrub cover, in a simple herbage production and consumption model. The model may be calibrated from remotely sensed data.

3. Model calibration for rangeland areas in central Australia yields parameter values for degraded and undegraded situations, allowing estimation of productivity.

4. Modelling of a 50-year rainfall sequence shows that herbage production and consumption by cattle change through time because of rainfall variability. They also change with paddock layout and access to water.

5. The effect of degradation on herbage consumption is relatively small compared with the effects of rainfall variability, but it increases the chance of running out of forage during drought.