Considerable literature has linked the increasing concentration of agricultural production to severe ecological problems. There is an argument that large-scale farmers are less concerned about the environment and, therefore, less likely than small-scale farmers to employ environmentally sound methods and practices. However, this paper advances an alternative hypothesis predicting that small-scale farmers are less able to preserve the environment than large-scale farmers because of environmental and institutional constraints such as farming on highly erodable and marginal soils. To test this hypothesis, the relationship between farm size and estimated soil loss using data obtained from a random sample of farmers in a KwaZulu-Natal midlands community was examined. Large farms were found to have lower estimated soil loss than small farms, mainly because the land farmed had less potential for erosion. The implications of these findings for developing an effective soil conservation policy are discussed The differential productivity of farmland must be represented in any analysis of the changing structure of agriculture and the efficiency of large and small farms. The most productive farmland in this country has a relatively low soil-erosion potential and lends itself to capital-intensive agricultural production. Capital-intensive agriculture is not attracted to the marginal land that has higher erosion potential. Marginal lands are, however, the most accessible and affordable for smaller farmers. Soil erosion, then, is a problem of small-farm agriculture, not capital-intensive agriculture.