Ectoparasite infestations of sheep can result in serious animal welfare and financial losses. Many of the veterinary medicines used in their control can be harmful to humans and other species. These undesirable side-effects mean that trade-offs may be necessary and make it difficult to determine ‘the best’ control strategy. This problem is common to many animal health/welfare concerns, and must be addressed if progress is to be made under the Animal Health and Welfare Strategy for Great Britain. This paper describes an approach to such cases using a disease model to identify the financially optimal ectoparasite control strategies at the farm level for Scottish conditions in a climate of changing control restrictions. Our approach takes a wider systems perspective than is usual in cost-benefit studies of animal disease. The findings demonstrate that both flock size and ectoparasite risk are determinants of optimal control strategies. In addition the benefits of livestock biosecurity practices (isolation and treatment of incoming stock) for the control of sheep scab are demonstrated. The importance of dip products for the effective control of ectoparasites is discussed and possible implications if these become unavailable or the cost of their usage increases. Interdependence between stakeholders is highlighted, indicating a need for regional co-operation between farmers and a more integrated approach to control of some farm animal diseases.