The promoters of the large groundwater developments implemented in the 1970's paid little attention to the effects of pumping on soil moisture. A field study, conducted in 1979 in the Tern Area of the Shropshire Groundwater Scheme, revealed that significant quantities of the available moisture could be removed from the root zone of vegetation when drawdown of shallow watertables occurred. Arguments to this effect, supported by the field study evidence, were successfully presented at the Shropshire Groundwater Scheme public inquiry. The aim of this study has been to expand the work which was undertaken in connection with the Shropshire Groundwater Scheme, and to develop a method whereby the effects of groundwater pumping on vegetation can be assessed, and hence the impacts minimised. Two concepts, the critical height and the soil sensitivity depth, formulated during the initial work are at the core of the Environmental Impact Assessment method whose development is described. A programme of laboratory experiments on soil columns is described, as is the derivation of relationships for determining critical heights and field capacity moisture profiles. These relationships are subsequently employed in evaluating the effects of groundwater drawdown. In employing the environmental assessment technique, digitised maps of relevant features of the Tern Area are combined to produce composite maps delineating the extent of the areas which are potentially sensitive to groundwater drawdown. A series of crop yield/moisture loss functions are then employed to estimate the impact of simulated pumping events on the agricultural community of the Tern Area. Finally, guidelines, based on experience gained through evaluation of the Tern Area case study, are presented for use in the design of soil moisture monitoring systems and in the siting of boreholes. In addition recommendations are made for development of the EIA technique, and further research needs are identified.