Impacts Of Grassland Ecological Compensation Policy On Household's Off-farm Employment Livelihood

Grassland ecological compensation policy(GECP)is a major ecological conservation program that has been implemented to ensure the ecological security and herdsman's livelihoods in the pastoral regions in China since 2011,But the existing literature has focused on the impacts of overall GECP on restoring grassland ecological functions,however,little study has examined its impacts on the adaptation strategy and livelihoods of herdsmen.GECP has two major policy measures: the grazing ban compensation in the areas with the severe grassland degradation and the foragelivestock balance compensation in other areas.Because the impacts of GECP on grassland ecological functions highly depend on the responses of herdsmen to GECP,understanding the adaptation strategy of herdsmen after implementation of GECP is critical important for a successful GECP.The overall goal of this study is to examine the impacts of GECP on herdsman's livelihood with specifically focused on their employment and income from off-farm employment.To achieve this goal,we analyze the following three key research issues: have the herdsmen changed their livelihoods(or employment strategy)after GECP has been implemented since 2011? Has GECP facilitated the household's off-farm employment? How has GECP affected the household's income from off-farm employment? The empirical analyses are based on a unique household survey data that were collected through a stratified random sampling approach and covered a period of 2008-2015 in Inner Mongolia,a major pastoral region in China and a region dominated by the indigenous Mongolians who are highly reliant on grazing animals on the natural grasslands to maintain their livelihood.Based on the descriptive and econometric analyses,this study has the following major findings: 1)Although GECP has facilitated the employment and income from off-farm employment for most households,it did not change their livelihood that highly reliant on grazing animals on the natural grasslands.2)The impacts of the grazing ban on household's employment and income from off-farm employment show an inverse U-shape relationship.That is,with the initial increase in the grazing ban compensation,off-farm employment and corresponding income are rising(the elasticity are 0.046 and 0.204);but they start to fall after the compensations reach a certain level(the elasticity are-0.003 and-0.012).Which suggests that the high compensation may lead to the higher demand for leisure.3)The impacts of the forage-livestock balance on household's employment and income from off-farm employment also show an inverse U-shape relationship.That is,with the initial increase in the forage-livestock balance compensation,off-farm employment and corresponding income are rising(the elasticity are 0.17 and 0.627);but they start to fall after the compensations reach a certain level(the elasticity are-0.061 and-0.21).Which suggests that the some households have low pressure and economic motivation because of owning large of grassland area.This research contributes to the literature in three ways.First,it is the first study that empirically examines the impacts of Grassland Ecological Compensation Policy on off-farm employment in the pastoral areas in China.Second,it reveals that the impact of the current GECP on herdsmen's grazing livelihood is different between grazing ban and forage-livestock balance.Third,it reveals an inverse U-shape relationship between off-farm employment and grassland ecological compensation.The findings of this study have several important policy implications.First,it is not easy to change herdsmen's long-term grazing livelihood through the current GECP without the other programs implemented simultaneously to generate more employment for local herdsmen.If herdsmen continue to reliant on grazing animals as their major livelihood,GECP will not be able to largely provent the grasslands' degradation.Second,more subsidy does not necessary stimulate herdsmen's engaging more on offfarm employment.There are optimal levels of subsidies for both the grazing ban compensation and the forage-livestock balance compensation.One alternative policy is to set up a cap on subsidies for households who have particularly large areas of grassland,meantime,using the saved budget to support the herdsmen who are starting their businesses and shifting non-livestock industries through the preferential credit and employment support program.The last but not least,considering the most of pastoral herdsmen belong to ethnic minorities,their migrant intentions tend to significantly lower than Han nationality herdsmen,accelerating urbanization in pastoral areas and improving the local labor market are critical important to absorb the surplus labor in pastoral area.