Soil degradation is a serious and widespread problem in Albania. It manifests itself in many forms and causes a range of eff ects. Th e aim of this study was to analyze the economic losses from soil erosion and compaction in relationship to agriculture in Albania. On-site eff ects of these two degradative processes aff ect farmers directly through reducing production and increasing the costs of farming. Calculation of economic losses was performed by using the replacement and lost production methods. According to our assessments, the wheat and maize yield losses due to the soil compaction are 112 164 tons or US$ 40.2 million, and the plant nutrient losses due to the water erosion are 69 609 tons or US$ 98 million. Economic losses from the erosion and compaction in the agricultural area in Albania are at least US$ 138.2 million per year or about 5.5% of the agricultural GDP. Based on the assessed economic losses from soil degradation, it can be concluded that the soil conservation in Albania is economically viable.