Land degradation, mainly due to soil erosion and nutrient losses, is a global problem for sustainable agriculture. Farmlands in the Ethiopian highlands are susceptible to water erosion because of steep slopes and extensive cultivation. A field experiment was conducted in the Gule sub‐watershed in northern Ethiopia to assess the efficacy of in situ water harvesting techniques in reducing soil and nutrient losses. The research was carried out on a sandy clay loam soil under semi‐arid conditions. Soil erosion and nutrient losses were monitored during the rainy season (June to September) in 2013 and 2014. Five treatments with tied ridges, wheat‐straw mulch and effective microorganisms, alone or in combination, and an untreated control were tested. Combined tied ridges and straw mulch, with and without effective microorganisms, significantly reduced average soil loss over the two rainy seasons by 82 and 90% respectively compared with the control. Tied ridges alone reduced average soil loss by 60%. Straw mulch with and without effective microorganisms decreased average soil loss by 81 and 85% respectively. Combined tied ridges and straw mulch significantly decreased average total nitrogen and total phosphorus losses by 82 and 83% respectively. Average nutrient losses were also significantly decreased by tied ridges (59% for nitrogen, 52% for phosphorus) and straw mulch (63% for nitrogen, 68% for phosphorus). Our results indicated that in situ water harvesting techniques can effectively reduce soil and nutrient losses from farmland and were more efficient when the techniques were combined. Copyright © 2016 John Wiley & Sons, Ltd.