Incentive Mechanism Of The Compensation For The Grain-for-green Project On The Perspective Of Joint Production

The Grain-for-Green Project is a major ecological projects of China, which has thelargest investment, the most widest area, the most significant effect, the project has achievedremarkable results. However, the achievements of the project can not be overestimated. Fromthe view of effects, farmers’ enthusiasm to participate is very high, a large range of steepslope reclamation got to curb, and the vegetation is gradually restored. However, there is a biggap between the overall effect of ecological restoration and construction and the target, wecould not be optimistic to the vegetation restoration on the ground, whether it can play along-term ecological function is still uncertain. Even the possibility of reclamation still exists.This paper attempts to discuss incentive effect of Grain-for-Green Project and itsimplementation mechanism on the perspective of joint production, and then discusses thesystem design to encourage farmers to supply ecological products, in order to promote thesustainable development of the project.The dissertation has7chapters. Chapter one offers a general picture of the research，including an introduction，an overview of the background of the study, the purpose, meaningand content of the paper, and the methodology used in the research. Chapter two covers thecore concepts of joint production and make a description of the theory about incentivemechanism and joint production. The third chapter further defines the nature and type of jointproducts, laid the foundation for the following study. Chapter four outlines the Project ofGrain-for-Green to analysis the mechanism for the implementation of the Program. The fifthchapter further uses econometric model to verify the mechanism of subsidy policy to farmers’behavior of the supply of ecological products on a household survey. The sixth chapter putsforward the calculation methods and standard of compensation on the perspective of jointproduction, try to build a new incentive mechanism. The seventh chapter is the conclusionand discussion. As for the research methodology，the study uses for reference the mainstreamapproach to and the edge in famer household behavior research. On one hand, it adopts morestandardized approaches introduced in theoretical economics and finance such as PPF andindifference curves; On the other hand，this paper also through the introduction of a multivariate regression model, make an empirical description about the mechanism andimpact of subsidy policy on Farmers’ behavior of joint production; In addition，the researchextensively uses the bloke diagram format to show the nature of joint production and famerhouseholds’ behavior mechanism in the Grain-for-Green Project; The main content of thestudy are as follows:(1) The paper makes a more comprehensive analysis of the nature ofjoint production in the Grain-for-Green Project.(2) The paper systematically reveals theimplement mechanism of the Grain-for-Green Project.(3) The paper systematically verify theintermediary role of forestry income in the conversion of policy implementation, reveals theimplement mechanism of subsidy in the Grain-for-Green Project.(4) The paper estimatescompensation standard and time from the point of joint production for the first time, and putsforward a set of system and innovation mechanism to encourage farmers to participate in theGrain-for-Green Project.The major results of the study are as follows:(1) The Grain-for-Green Project is typicaljoint production, not only provides economic and ecological products but also private andpublic goods jointly. The complementary-competitive relationship between economicproducts and ecological products is the root of weak incentive of the subsidy policy.(2) Theimplementation mechanism and the incentive mechanism of Grain-for-Green Project can bedescribed as: through the compulsive institutional change and induced institutional change,the government build the ecological compensation system, and in this framework, take farmerindividual contract mode, change the slope farmland to woodland with the measures ofproperty right incentive measures, direct subsidies and preferential policies. Finally, competethe supply of public goods by private manner. Through Famer’s own efforts, to complete thejoint production between ecological products and economic products.(3) In the area ofGrain-for-Green Project, improving forestry income, increase the farmers forestry income isexpected to increase farmers’ enthusiasm of joint production, it is also the most fundamentalway to guarantee the sustainable forestry management and national ecological security. Inorder to improve forestry income expectations to improve the enthusiasm of farmers forsustainable forest management, the state should extend and improve the subsidy standard, andadjust the forestry seedling subsidies policy.The policy suggestions of the research are as follows: the fruits of joint production in theGrain-for-Green Project, need some supporting mechanisms. The government should alsogradually establish, improve, optimization of security mechanism, in order to avoid risks,improve the enthusiasm of farmers. Specifically, we need to improve the subsidy policy, take joint production as the basis of the new compensation standard, the implementation ofdifference compensation should be toke by two stages. Gradually establish a mechanism toensure the implementation of forest rights, and bring it into national policies. We also need tofurther improve the forestry investment incentive mechanism, ecological benefitscompensation mechanism, conversion of risk avoidance mechanism, industrial transfersupport mechanism, technology support mechanism, financial incentives to support and othersupporting mechanism.