Soil erosion is a serious problem in the mountainous regions of northern Vietnam. A study was carried out to measure the on-site costs of soil erosion and the benefits of soil conservation practices in this area. The data for the study analysis included time series data collected from experiments on soil erosion during the period 1992 to 1998 and cross-section data from surveys on farm households. The function for the relationship between productivity loss and soil loss and the function for productivity gain from soil conservation practices and financial analysis were used to estimate the on-site costs of soil erosion and the benefits of soil conservation practices. The function for expenditure on soil conservation was also applied to determine factors affecting a farmer's adoption of soil conservation practices. The findings of the study highlighted a significant difference in crop yields between farming practices with and without soil conservation measures. Soil conservation technology of Tephrosia candida hedgerow yields a high net present value (NPV) and is a suitable technique for farmers to use.