Farm level activities which impact on the rate and level of soil loss have significant consequences for various 'down-stream' stakeholders, such as: municipalities concerned with drinking water quality, harbour authorities concerned with soil sediment build-ups, and recreationists concerned with wildlife habitats and swimming activities. This report examines the various linkages between farm level soil loss and the economic impact on these and other 'downstream' consequences. One of the major goals of this report is to estimate the economic impact of off-farm downstream impacts resulting from a reduction in sediment and phosphorus run-off. Based on the current analysis, this report indicates that a 10 percent reduction in soil erosion lowers annual downstream costs by $3 per hectare and a 40 percent reduction lowers annual downstream costs by $12 per hectare.