Land Use Change in North West China

Jeff Bennett

1. China’s land and water resources

Area of 960 m hectares • 40% grassland• 17% forests• 14% cropland• 66% mountainous

Dry in the north and west Wet in the south and east

2. Resource degradation

38% of total land area “eroded” 50% of cropland “eroded” 34% of grassland moderately to severely degraded 27% of total area subject to desertification 10% of total area subject to salinisation

3. Population and resources

22% of the world’s population on 7% of the world’s arable land

“Mismatch” of population with rainfall distribution

Growing urbanisation across formerly agricultural land

Pressure on resources … a cause of degradation

3. Institutional factors

Grain self-sufficiency policy

Agricultural collectivisation – property rights

Industrialisation policy State monopoly in

agricultural commodity procurement and marketing

Since Household Responsibility System (1978):• Incomplete land tenure – use

rights only• Frequent enforced

redistributions• Ie Inadequate definition and

defence of rights

4. … the consequences

Reduced agricultural productivity

More natural disasters (flooding, dust storms, mud slides )

Diminished biodiversity Rivers stop flowing Air and water quality

deterioration

5. The policy response – “Grain for Green”

Convert cropland and “barren land” to forests and grassland to achieve water and soil conservation, but also agricultural restructuring and poverty reduction under the mantle of “sustainable development”

Inception in 1999 Payments of cash, grain and seedlings to farmers

who convert land

6. Adoption

25 provinces 1580 counties 15 million farmer

households Target: net increase in

forest and grassland of 32 million hectares

7. Features

150 kg/mu pa in the south 100 kg/mu pa in the north 20 yuan/mu pa in cash 50 yuan/mu worth of

seedlings

8. Terms

Benefits received over 2 years for grassland

5 years for “commercial forests”

8 years for “ecological forests”

Difference between commercial and ecological based on planting density

Use rights on converted land extended to 70 years

9. … but is it sustainable?

Are the income streams available from the new land use patterns after the removal of the payments superior to the pre policy amounts?• Price impacts of increased supply of tree products?• Extent of off-farm income?• Grain market responses?

10. … and is it efficient?

What are the biophysical impacts of the project? What value does the community have for those

benefits? Are the benefits being achieved at the lowest cost?• Does the scheme target farmers with the highest net

benefit of conversion? (low opportunity costs plus high environmental impact?

• Does the scheme provide perverse incentives (eg to “grow” subsidies not products)?

11. The project

ACIAR funded collaboration between ANU and the China National Forest Economics Development Research Centre (part of the State Forestry Administration)

3 phases:• Household survey to investigate financial impacts• Broader benefit cost analysis integrating values of

environmental impacts• Institutional economic analysis of alternative policy

settings

12. Household survey

Conducted 4-28 June 2004 Involved 405 households in

15 villages across 4 counties in 2 Provinces (Shaanxi and Quinhai)

2064 people in the households

31% of respondents illiterate

75% males 74% Han, 19% Tibetan

Over 14,000 mu of farm area involved (15 mu=1 ha)

17 mu per farm in Shaanxi 39 mu per farm in Quinghai 4800 mu converted to

forestland 2700 mu converted to

grassland Area sown to crops

decreased from 13,500 mu to 4,500 (about one third)

Average cash payments (pa)• Bin Xian – 47 Yuan• An Sai – 340 Yuan• Gong He – 565 Yuan• Min He – 160 Yuan• (A$1 = 6.5 Yuan)

Average grain subsidy (pa)• Bin Xian – 425 jin• An Sai – 3167 jin• Gong He – 5670 jin• Min He – 1640 jin• (I jin = 500 gm)

13. Before and after GFGP

Labour input • 293 to 196 days per h’hold

Crop seed costs• Y 530 to Y 334 per h’hold

Crop Output• Shaanxi – down 70%• Quinghai – down 17%

Off-farm income• 213 people to 279 people• Y 3074 to 3900 per person

14. Work underway

Analysis of the household data to estimate impact on net income

Prediction of biophysical impacts of the policy• Water quality and quantity• Air quality

15. Project information

Project web-site• Downloadable papers• Up dates on progress

http://apseg.anu.edu.au/staff/jb_suslndrr.php