Research On The Viability Of The Grain For Green Project

China’s Grain for Green Project (or Sloping Land Conservation Program) is a positive response to environmental degradation such as the severe drought event occurred in1997in the Yellow River and the devastating flood in1998in the Yangtze River. The goal of the project is to encourage rural farmers to stop farming and to reforest lands with serious water loss and soil erosion, desertification, salinization of soi.The Project’s viability has been a focus of many scholars home and abroad since1999. Problems such as the Project’s implementation, the Project’s ecological and economic effects, the ecological compensation and the developments of follow-up industries have been discussed widely with remarkable achievement in existing literature, no conclusion about the Project’s long-term viability has been achieved. Following issues are still controversial:How much are the environmental values (including nonuse values) of the Grain for Green Project and its benefit-cost efficiency? As part of farmers’ benefits from the Grain for Green Project, how much is the effect of the Project’s ecological improvements on the land productivity? Is there significant effect of the Project on the time allocation of farmers’off-farm employment? Whether the present standard of payment for environmental services of the Project is reasonable and how much is the reasonable level? This study uses the field micro-survey data from Wanzhou District in Chongqing to explore these questions in detail based on its perforance from the perspective of the sustainability of the policy itself and the viability of the policy’s implementation. The main research contents and related finds of this study are as follows.For the sustainability of the Grain for Green policy itself, this study, mainly based on the choice experiment data from the sampled farmers and citizens, assess quantitatively the environmental values and the policy’s benefit-cost efficiency from viewpoint of the local beneficiaries’willingness to pay (WTP) for the environmental services of the Project. Results find that about98.04%of the sampled farmers and 80%of the sampled citizens are willing to donate some money to maintain the ecological and environmental functions of the Project. According to the beneficiaries’WTP, the environmental values achieved through Grain for Green amount to327048137.61Yuan/year. Comparing the environmental values with the Project’s costs including the governmental subsidy and implementation costs, the policy’s benefit-cost ratio is2.72:1for the first period’s subsidy standard and4.96:1for the second period’s subsidy standard respectively. Having achieved huge environmental values and better ecological performance, it is advisable that government continues to maintain the project in future. So, it can be concluded that the policy is sustainable economically.For the viability of the policy’s implementation, this study mainly uses the survey data of the sampled farmers to evaluate and analyze the following three themes from the viewpoint of farmers’benefit improvements.This study firstly analyzes qualitatively the effects of the Grain for Green’s ecological functions on the land productivity. Results show that under the sampled area’s specific backgrounds without significant agricultural technological advances and institutional reforms other than the Grain for Green policy, and remaining other factors constant, the policy’s ecological functions has increased the average land productivity12.7%for corn farming and20.9%for wheat faming respectively. In addition, results also show that the sampled area’s land productivity is influenced obviously by the cultivated land’s size or its area, capital inputs, land’s qualities, and household’s decision makers’age and agricultural technological training.Next, this study evaluates whether the Grain for Green promotes farmers’ off-farm employment. The research finds that Project’s participation and the intensity of participation has positive effects on farmers’off-farm time, but these effects aren’t so obvious. The time increase in farmers’off-farm employment is just a time trend with a marginal effect resulting from the Grain for Green Project on it. But further examination finds that the Project markedly facilitates the off-farm employment of farmers whose families have elders, more than4labors and less than1mu cultivated lands per capita, and those who are female, village cadres and communists. Besides, results indicate that the main factors significantly impacting on farmers’allocation of off-farm time are their household characteristics including numbers of elders and labors and their personal characteristics including sex, age, education level, health condition, and off-farm employment before the Project.At last, this study measures quantitatively the standard of payment for environmental service of the Grain for Green Project and discusses the rationality of the present subsidy. According to the results of the cost-flow method, the payment based on only the opportunity costs should be7760.35Yuna/hm2?yerar, and that for covering the total costs of participating farmers, including opportunity costs and maintenance costs of environmental services, should be8985.25Yuan/hm2?year. On the basis of farmers’WTA in the conservation auction experiment, the payment level for maintaining the program (keeping the present participating rate constant) should be4500Yuan/hm2?year, and that for keeping the existing reforested area should be between3450Yuan/hm2?year and4500Yuan/hm2?year. Lastly, according to the environmental evaluation based on the choice experiment, the payment taking into account of environmental services should be10639.77Yuan/hm2?year. These figures mean that the existing policy with standard of1875Yuan/hm2?year under-compensates farmers.Based on the results from above three aspects, this study concludes that:The increase of the land productivity, although benefited markedly from the ecological improvements of the Grain for Green, doesn’t offset fully participating farmers’ economic losses. And the effects of the Project’s promoting farmers’off-farm employment prove to be generally poor. Especially under the condition of the Project’s poor economic performance and low-compensation of the first period’s standard (3450Yuan/hm2?year), the decrease in governmental subsidy after2007(which becomes1875Yuan/hm2?year) leads to farmers being the undertakers of net loss in the Projects. So, it can be concluded that the viability of the policy’s implementation is worrying.In light of the project design, the premise behind the Grain for Green’s long-term viability is farmers’continued participation in it, which depends on whether the participators’income can be improved by the Project. Based on the findings, some concrete supporting measures and policy suggestions related to improving land productivity and farmers’off-farm employment further and establishing a fair and rational ecological compensation mechanism are put forward finally in this study.