The study area is among the most affected parts of Ethiopian highlands that suffered from soil degradation of varying categories, over grazing and siltation resulted from inappropriate land use practices, and historic settlement. This paper tried to quantified rate of soil loss and regionalized erosion risk areas in intensive farming mountainous environment of Shafe watershed. In so doing, Universal Soil Loss Equation (USLM) and Geographic Information Techniques (GIS) are used to map and estimate mean annual soil loss in the area. Laboratory analysis of soil revealed except in the homestead plots, total nitrogen and organic matter content of the soil was low and progressively decreasing away from the homestead. Mean annual soil loss in the study area ranged between 0.04 t and 70 t ha-1 y-1. In the area low to moderate erosion hazardous areas are found in south and central part, while high to severe erosion risk areas are concentrated in the intensively cultivated hilly northern localities. More than a third of the study watershed (32.8 %) is categorized under high to severe erosion risk area with soil loss rate ranged between 30 t and 70 t ha-1 y-1.
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