Soil & Water Conservation, Economic Growth And Poverty Reduction

Since 1978 the national economy in our country has been developed rapidly and the poverty has descended dramatically after a set of reforms. However, China's rapid economic development has negatively destroyed natural resources seriously and damaged the ecological environment, soil and water loss is worsening gradually. Soil and water loss has made the arable land decrease and the environment worsen, which hampers the economic growth and poverty reduction in the end. But the soil and water conservation has a lot of difficulties and challenges in China, especially the lack of investment restricts the development of soil and water conservation. During the period of"the tenth five-year-plan", though the investment of conversation of soil and water has increased in large degree the disparity between demand and investment is still large comparing to the severe situation of soil erosion and the economic and social development. What's more, the investment for soil and water conversation project has descended since 2002.The research holds that soil and water conservation is closely correlated with economic growth and poverty reduction. The dissertation mainly quantitatively evaluates and compares the impacts of soil and water conservation investment and other public investments on economic growth and poverty reduction by economic theory. It can provide the policy insights to policymakers.The paper firstly reviews the soil and water conservation, economic growth and poverty reduction in China. It makes the regression analysis on the interactive relationships among soil and water conservation, economic growth and poverty reduction with the statistic data from the Chinese Academy of Sciences and the Ministry of Water Conservancy. It proves that soil and water conservation can reduce the soil and water loss, then promotes the land productivity, enhances rural economic growth and alleviates the poverty. The data analysis shows that the investment effect of the central government to father soil erosion is obvious and better than that of the investment effect of local governments and the mass.In order to deepen the comprehensive impacts of soil and water conservation on rural economic growth and poverty reduction, the paper builds the Simultaneous Equation Model, namely covering all kinds of channeles that soil and water conservation investments and other expenditures influenced the agricultural, non-agricultural economic growth, and poverty reduction. It estimates the equations with the provincial time series datum from 1970-2005 by the Maximum Likelihood Method.The study shows the marginal return of public investments is quite high, which can increase the benefit of public investment obviously. There is obviously difference among the public investments in different places, so is the change trend of public investments in different places. Generally speaking, the marginal return of investment on agricultural research to agricultural economic growth and poverty reduction is the highest and the second is that of the investment on roads. The investment on agricultural research especially has an obvious effect on non-agriculture economic growth. Soil and water conversation investment has a comprehensive impact on agricultural social economy distinctively. Education, irrigation and electricity has relatively little impact on agricultural economic growth, but the marginal benefit of education and electricity investment on non-agriculture GDP is relatively high. In a word, all kinds of public investments have decreaing effect on the marginal benefit of poverty reduction with time elapsing, but have different impact on agriculture and non-agriculture economic growth, among which, the effect of water and soil conversation investment has certain fluctuation with small degree.The different social economic structure and natural resource endowment leads to the obvious fluctuation of capital investment return in the 6 areas. The return of capital investment in north and central south China is the highest, but the great contribution of reducing poverty of investment is for the western areas(especially for the northwest areas). In northwest, southwest, north China where serious problems with water and soil loss took place, generally low is the return rate of governments'investment on soil and water conversation, agricultural research, irrigation, road, education, electricity and ect..The conclusion of the research has important policy significance in the governments'making priority of future public investment and optimized allocation of governments'resource can improve the effeciecy of public investment.