SummaryThe Standing Senate Committee on Agriculture, Fisheries and Forestry held extensive hearings throughout Canada in I98I1 to assess soil degradation. They concluded that unless action is taken quickly, the country will lose a major portion of its agricultural capability.The paper examined this conclusion a little more closely for a region in Southern Ontario. On the basis of past experience, the conclusion seems a little far fetched. Corn yields are still rising there and unit production costs declining. However, as indicated, this warning must be interpreted in light of the yield—soil depth relationship, which may reach a sharp inclination point in the near future on various soils. A big drawback is that empirical evidence on form and level of the curve for the various soils is unavailable.The causes of excessive soil erosion are complex and deeply rooted in economic forces and in institutions. Several institutions, crucial to agriculture, exert a discouraging influence on farmers to conserve their soil. Unfortunately, necessary institutional adjustments are not a priority item on the political agenda. Research on ways to mitigate the negative effects of economic forces on soil management has been scant in Canada. Across‐the‐board subsidies and favorable tax provisions are often advocated. However, little is known about their effectiveness, efficiency and e