The Australian cotton industry confronts a range of serious occupational health and environmental challenges, many of which relate to the use and misuse of agricultural chemicals. This article asks which policy instruments are likely to be most effective and efficient in addressing those challenges? Is government regulation a credible option or would industry self-regulation achieve better results? Is there a role for safety, health and environmental management systems or is some other option, or combination of options, likely to achieve better economic and health and environmental outcomes? More broadly, given the substantial threats to the cotton industry's legitimacy (and indirectly to its economic viability) resulting from its tarnished environmental image, how might the industry best preserve its 'social license' and rebuild trust and credibility with key stakeholders?