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Enhancing the comprehension of alterations in land use holds paramount importance for water management in semi-arid regions due to its effects on hydrology and agricultural economics. Allowing agricultural land to lie fallow has emerged as a technique to decrease water use. This research employs the methodology of system dynamics modeling to evaluate the hydrologic and agricultural economic ramifications of employing the fallowing strategy, which aims to preserve water resources in interconnected socio-hydrologic systems. This strategy is explored across three different crops, focusing on the Mesilla–Rincon Valley (MRV) in southern New Mexico. The study’s timeline spans from 2022 to 2050 with historical background from 1969 and encompasses various dimensions, including water availability, land utilization, and agricultural economics. Three types of crops were selected for the fallowing strategy, including cotton, alfalfa/hay, and chile. For each crop, 2500 acres of it would be designated for fallowing separately in two subsequent years, allowing the land to be cultivated in the third year and recurring such pattern. Simulation findings across scenarios (GFDL, UKMO, and NCAR) indicate that water withdrawals for all crops decreased significantly, ranging from approximately 2.69% to 4.37%. Similarly, agriculture income experienced reductions, varying from around 1.53% to 2.26%. Also, surface water and groundwater withdrawals are represented as percentages. The data illustrate significant reductions in water withdrawals across all scenarios. For instance, in the GFDL scenario, surface water withdrawal decreased by approximately 1.85% for cotton, 2.56% for alfalfa/hay, and 1.58% for chile. Similarly, groundwater withdrawals saw substantial reductions, such as 14.93% for cotton, 20.44% for alfalfa/hay, and 12.62% for chile. These numbers emphasize the urgent need for sustainable water management practices to address the challenges posed by reduced water availability. Full article