Farmer’s Decission-making Under Conditions Of Ecological-economic Joint Production

The Cropland Conversion Program is one of the most important ecologicalconstructions projects in China, which is initiated and desired to protect environment and toincrease local farmers’ income. It is greatly successful to engage farmers participating intothe program in the past decade. However, the gross performance of the ecological recoveryand construction in the conversed region is far from the desired aims, and that the programmakes a limit success in conversion of agricultural industrial structure, farmers’ sustainablelive hood and poverty reduction. This paper manages to find the sustainable approach tokeep the fruit of the program through the theory of joint production from themicro-perspective of farmers’ decision-making.Chapter Ⅱ reviews the studies on multifunctional agriculture, joint production and therural households’ decision-making, highlight the three types of popular perspectives such as“commodities production by commodities”, joint production based on thermodynamic andthe private provision of public goods, as well as demonstrations on labor disutility andfarmers’ differentiation. Chapter Ⅲ introduces the definition of ecological-economic jointproduction and the weak incentive of the compensation for the farmers in the conversedarea through the case study, focuses on the relationships between the weakness and theingenuous and exogenous rushes, and that propose the basic hypotheses on farmers’provision of ecological services and corresponding methods. Chapter Ⅳ makes acomparative static analysis to explain the effects of the compensation, non-forestryagricultural production and non-farm employment on the framers’ decision-making througha model of joint production, and highlights relationship between the weak incentive and theexogenous rush. Chapter Ⅴ develops a model of farmers’ decision-making under thecondition of joint production through the definition of the labor disutility and the real laborremuneration, analyses the relationships between the real labor remuneration and threeparameters such as probability of farmer’s management and protection of convertedecological forest, market-oriented degree of demand for the forest products and theemployments structure of family members, and then illustrates the weak incentive resultedform the ingenuous rush. Chapter Ⅵ develops a model of farmers’ decision-makingincluding the economic product, ecological-economic joint product and the ecologicalproduct, through which derives the optimal reflection curve, gives the proof of existenceand uniqueness of Nash equilibrium in the program, then identifies the farmers’ supplyfunction of ecological product, and finally explain the feasible approach to the optimalecological goals of the program. Chapter Ⅶ gives empirical confirmations to the results ofthe Chapter Ⅳ, Chapter Ⅴ and Chapter Ⅵ. Chapter Ⅷ is conclusion and discussion.The main conclusions obtained are as follows:(ⅰ) The Cropland Conversion Programis typical joint production, not only provides economic and ecological products but alsoprivate and public goods jointly.(ⅱ) Under the joint production the farmers’ motivationform the compensation for farmers is diminished by the ingenuous and exogenous rushes.(ⅲ) The farmers’ option and participating is the unique and efficient way to reach and foster the ecological aims.(ⅳ) The famers’ income from the activities in the conversed land is themost significant factor influencing the efficiencies and effectiveness of the program whilethe farmers’ willingness is directly influenced by the income.Comparing to existing literature, the main contributions of this dissertation can besummarized as follows:(ⅰ) Theoretically, this paper focuses the farmers’ decision-makingand the joint production in order to illustrate the incentive weakness of the compensationfor farmers involved in the program as well as the way to reach and foster the ecologicalaims, and then restrict the questions about ecological construction into a analyticalframework of the joint production.(ⅱ) Methodologically, the paper pays much moreattention to the case study and mathematical economics analysis compared with the existingliteratures, and introduces the farmers’ decision-making into a deeply economic analyticalframework.