Temperate agricultural systems in SE Australia are dominated by annual crops and pastures based on sub clover, medics or volunteer grasses. These annual systems have shallow roots compared to perennial native species. Poor exploration of the soil by roots in these annual plant communities has increased the risks of land degradation through dryland salinity, leakage of nutrients, loss of soil structure, increased emission of greenhouse gases and loss of biodiversity. Although lucerne has recently been incorporated into broadacre cropping systems to improve hydrological control, it tends to leave the soil exposed to erosion during winter months, when productivity is low, has low biodiversity as a mono-culture and may not be as efficient as native, woody species for preventing deep drainage. An improved understanding of biophysical processes in these systems is needed in order to develop more sustainable farming systems, which optimise resource use and generate greater ecosystem service benefits. At Rutherglen in SE Australia, long-term ecological experiments commenced in 1980 and 1986 have been used to investigate how different forms of stubble and tillage management in a temperate (600 mm mean annual rainfall) environment can protect soil, increase resource use efficiency and reduce adverse impacts on soil structure. The objectives of the study were to quantify the relative amounts of Organic Carbon (OC) in the soil under in a range of agricultural plant communities to identify trends in physio-chemical degradation of the soil resource under different stubble and rotation management regimes. Cereals, principally wheat, pulses (lupins and faba beans) and subclover pasture were grown in various rotations under stubble retention and stubble burning treatments. Plots were 4.5 m wide and 20 m long. In 2003, a selection of reference annual and perennial plant communities including, annual pasture (subclover and rye grass), lucerne, Pinus spp., mixed native species and eucalypts grown on nearby similar soil types in the same local environment were compared to the crops. Oxidisable OC levels were measured in the soil from 0-10 cm depth at various times in selected treatments and modelled using Soil Carbon Manager™ for incorporated and burnt stubbles. After an initial level of 2%, OC under continuous annual crops declined to 1% after 20 years, compared to an accumulated equilibrium of 2% after 30 years of subclover pasture, a value achieved by both lucerne and mixtures of native woody species within a six year period. These results suggest that in this temperate environment, greater seasonal productivity and capacity for below ground sequestration of OC in perennial plant communities is available to mitigate greenhouse gases in the atmosphere. Maximum levels of c. 2.5% OC found in remnant native communities after more than 100 years are not feasible for phases of agricultural production. Modelling of restorative changes in OC under continuous cropping with stubble management and rotations over an 80 year time-frame showed progressive changes in OC from an initial value of 1%. There was a sustained build up of OC under stubble incorporation approaching 2%, a much longer period than was needed to achieve the same extent as perennial plant communities. A gradual decline in OC to below 0.7% resulted under continued burning was predicted by the modelling. These findings support the use of mixed native plant communities in phase with agricultural production systems to restore OC levels in the soil and combat greenhouse gas emissions. Rapid changes in OC can be achieved by using a combination of perennial species and selected stubble management for sustainable production systems. However, sequestration of carbon in the soil is affected by seasonal variability in the temperate climate and further work is needed to determine the optimum proportion of crop and perennial phases required for maintaining levels of OC.