A mathematical model is proposed to represent the real physical water resources system of an arid region (P.D.R. Yemen), with its elements of stochastic wadi flows and an aquifer. The conceptual model formulation makes use of several algorithms of dynamic programming, with the objective function to maximize the net returns from the conjuctive use of spate irrigation water and groundwater under specified local constraints. The benefit functions for the area irrigated by spate water and by the conjuctive use of spate - groundwater are shaped by the crops grown and the variable inputs used in the model. Alternatives to improve the model are envisaged such as control of the flashy flood flows, and increasing the recharge water to the aquifer by artificial means. The economic evaluation of the system makes use of Benefit-Cost analysis to maximize the returns that could be obtained from operating the system under specified conditions and constraints within the planning horizon. The modelling system is computer simulated, and variables that have major effects on the objective function of the model are studied to improve the system as a whole and to maximize the benefits derived.