payment for environmental services: the sloping land conversion program in ningxia autonomous region...

66 China & World Economy / 66–81, Vol. 16, No. 2, 2008

©2008 The AuthorsJournal compilation ©2008 Institute of World Economics and Politics, Chinese Academy of Social Sciences

Payment for Environmental Services: TheSloping Land Conversion Program inNingxia Autonomous Region of China

Lei Zhang, Qin Tu, Arthur P. J. Mol *

Abstract

China’s Sloping Land Conversion Program has been implemented since 2002. It aims toachieve goals of ecological recovery and poverty alleviation, by retiring steeply sloping landfrom crop production and freeing surplus agricultural labor for off-farm activities. Giventhe huge investment that has been poured into it, and its ecological and social impacts, thisgovernment-initiated program has attracted significant academic attention and triggered aflood of debate. Since 2004, the debate has concentrated on the sustainability of the program.Although targets have been overachieved in some provinces, concern has still emergedregarding the livelihood of farmers after subsidies stop. The present paper analyzes theimplementation of the Sloping Land Conversion Program in Ningxia Autonomous Region,with a focus on the required social capital for sustained participation of farmers and thedevelopment of off-farm economic activities.

Key words: China, Sloping Land Conversion Program, social capital, sustainabilityJEL codes: O53, Q01, Q57

I. Introduction

China’s Sloping Land Conversion Program (SLCP), which literally means “return croplandto forest or grass”, has been in full implementation since 2002 after a short pilot between1999 and 2001. SLCP was initiated in 1999 by the Chinese Central Government as aresponse to the severe dry-out in the Yellow River basin and the devastating floods of

* Lei Zhang, Assistant Professor, Environmental Policy Group, Wageningen University, Wageningen,the Netherlands. Email: [email protected]; Qin Tu, Associate Research Fellow, Institute of WorldEconomics and Politics, Chinese Academy of Social Sciences, Beijing, China, and Development EconomicsGroup, Wageningen University, Wageningen, the Netherlands. Email: [email protected]; Arthur P. J. Mol,Professor, Environmental Policy Group, Wageningen University, Wageningen, the Netherlands. Email:[email protected]. We thank the Dutch Royal Academy of Arts and Sciences, and the Chinese Ministryof Science and Technology for their financial support for this research.

mailto:[email protected]



67Payment for Environmental Services: The Case of Ningxia


1998 in the Yangtze River Basin and northeast China. Ecological degradation in theseriver basins, deforestation in particular, is believed to be the main cause of these disasters.The strengthened national treasury and the surplus of grain at the end of the 1990senabled the implementation of such a large-scale land conversion program (SFA, 2003).The primary goal of this program is to rehabilitate the ecological environment by retiringsteeply sloping land (greater than 25 degrees) from cropland and turning it into forestsand grassland, with the target of converting 14.67 million hectares of cropland to forestsand an additional “soft” goal of afforesting 17.33 million hectares of wasteland by 2010(SFA, 2003; WWF, 2003). The program is also intended to act as an instrument forrestructuring local agricultural economies and reducing poverty in the targeted regions.By the end of 2003, this program covered 25 provinces, regions and municipalities, morethan 2000 counties and tens of millions of households, mainly in western and centralChina. The geographical focus of this program is in the western regions and approximately70 percent of the priority counties for implementation are located in the mostunderdeveloped area of China (SFA, 2003).

As one of the first “payment for environmental services” programs in China, SLCPdiffers from other national reforestation programs in its use of a public payment schemethat directly engages millions of rural households as core agents in project implementation,under the principle of “voluntarism” (SFA, 2003). A total budget of RMB337bn (overUS$40bn) is used in the implementation. Compensation to farmer households is made bothin cash and in kind. Considering the average regional grain yields, the annual grain subsidyis set at 2250 kg/ha in the Yangtze river basin and 1500 kg/ha in the Yellow River Basin. Thecash subsidy is up to 300 yuan/ha of eligible land per year. Both grain and cash subsidiesare provided for ecological forests for 8 years, for economic forests for 5 years and forgrasslands for 2 years .1 Seedling provision for afforestation is subsidized with 750 yuan/ha. As the de facto implementation of the program involves decentralized, voluntarygrassroots participation, the SLCP avenue is different from the “business as usual” coursethat China generally takes to manage its forest resources (Xu et al., 2004). By offeringfarmers food and income for withdrawing land from crop production, the SLCP provides anopportunity to break through the vicious cycle of poverty–ecological degradation–poverty,and to enter a path of sustainable development. The SLCP has set favorable conditions forsurplus agricultural labor to engage in other off-farm businesses after land conversionbased on two prerequisites: farmers’ incomes can be sustained, and off-farm economicactivities are available.

1 According to the definition given by the State Forestry Administration, “ecological forests” are timber-producing forests, and “economic forests” are orchards or forests with medicinal value.

68 Lei Zhang et al. / 66–81, Vol. 16, No. 2, 2008


Given the huge investment in SLCP and its ecological and socioeconomic impact, thisgovernment-initiated program has triggered a flood of debate. The program appears to bea perfect model of ecological modernization (Mol, 2006; Zhang et al., 2007). However, since2004, there has been a shift in attention and debate from the implementation capacity of thegovernment towards the sustainability of the program. Although overachievement of landconversion targets has been reported in many provinces, concerns have emerged aboutthe livelihood of farmers 5 or 8 years after implementation, when compensation stops (Yeh,2004; Groom et al., 2007). This debate touches upon the rationality and adequacy of theinstitutional design and implementation of the SLCP. Although the government’s effortsare encouraging, it has been (Xu et al., 2006), and sitll is questionable whether large-scale,campaign-style, and top-down designed programs are the best way to reverse adverseenvironmental outcomes under complex conditions.

Based on previous studies, this paper discusses the rationality and implementation ofSLCP, using a case study of SLCP implementation in Ningxia Autonomous Region, a regionwith high poverty rates, fragile and degraded ecosystems, and many economically andpolitically isolated farmers and villages. It is found in the present study that the widely heldbelief that compensated land conversion will lead farmers to develop alternative off-farmbusinesses is a misconception. In some remote and poor Chinese villages, off-farmbusinesses do not develop spontaneously. However, this program needs the involvementof farmers and farmers’ organizations in the early stages of program design andimplementation.

The remainder of the paper proceeds as follows. Section II establishes an analyticalframework of the relationship between environmental protection and poverty alleviation,and provides some policy implications. Section III analyzes the rationality and adequacy ofthe SLCP policy through its implementation in Ningxia Autonomous Region. Section IVconcludes the paper.

II. Environment and Poverty Alleviation Relations and theRationality of the Sloping Land Conversion Program

Since the 1992 World Conference on Environment and Development in Rio and, in particular,the 2002 World Summit on Sustainable Development in Johannesburg, the world haswitnessed an increasing priority for poverty eradication as a component of the agenda forsustainable development. Theoretically, poverty reduction and environmental sustainabilityare inherently complementary. However, this notion does not appear to stand up well toempirical scrutiny. “One size fits all” solutions do not exist (Barrett et al., 2005). Therefore,it is important to identify the key factors that foster win–win outcomes and create better



trade-offs between conservation and development objectives. Some researchers concludethat whether synergistic outcomes can be achieved depends on the institutional arrangementsthat can mobilize the positive factors of targeted groups and eliminate constraints in ruralareas, and on the important role of local communities in setting rules and implementingprograms (Ostrom, 1990; Baland and Platteau, 1996; Barrett et al., 2005). Local institutionalarrangements provide the social and physical infrastructure that enables and constrainspoverty–agriculture–environment interactions, for instance by supporting the developmentof non-farm activities, the commercialization of sustainable agriculture, and the allocationof capital (Vosti and Reardon, 1997).

To enable the poor to become positive actors in environmental protection, anecological policy should first address the survival needs of the poor population. Tomove out of the agricultural production–poverty–environmental degradation nexus oftenrequires the existence of some other income opportunities that do not strongly dependon natural resource exploitation. However, successful policy interventions aiming torelax such constraints (e.g. on market information, labor skills, educational level andinfrastructure) are rare. Rural households in developing countries are usually constrainedby their choice of production and consumption patterns and are precluded from manyincome-enhancing opportunities as a result of missing agricultural markets, imperfectinstitutions and infrastructure, high transaction costs and lack of social capital (e.g.Banerjee and Newman, 1994; Taylor and Adelman, 2003; De Janvry et al., 2005). Theavailability of off-farm business opportunities (more or less secured non-farm incomesources) depends on the combined factors of capital, technology, market information,social capital and entrepreneurship.

Based on the above-mentioned studies, we can conclude that, to be effective, policyintervention aiming at environmental protection and poverty alleviation should focus onthe environment, the economy and society. In addition, the successful management ofnatural resources is mostly related to collective management, involving many actors,including public sectors, market actors and civil society (Rydin and Falleth, 2006). TheSLCP’s top-down design and fragmented policies and institutions are the main causes ofthe target of coordinating and integrating the environment, economic development andsocial stability not being fully realized. On the one hand, the State Forestry Administration(SFA) plays a dominant role in designing, planning and implementing the SLCP, with verylittle consultation and communication with other relevant ministries, except the NationalDevelopment and Reform Commission, the State Food Bureau and the Ministry of Finance.Not surprisingly, the lack of coordination and cooperation has caused some problems,such as repeated investment by different ministries in the same location targeting the samepopulation, conflicts between different goals and interests at various levels, and ill-integrated



policies of different departments. Forestry staff are not only overloaded with tasks, but arealso blamed when things go wrong. Investment in training of farmers, development of off-farm businesses and implementation of long-term payment schemes for environmentalservices, for example, are far beyond the capacity of SFA.2 On the other hand, the SFA andthe SLCP Office lack the mandate to coordinate and mobilize the efforts of and resourcesfrom all relevant public sectors to ensure the sustainability of SLCP.

The main emphasis of the SLCP is on ecology-oriented policy, whereas more overalleconomy-oriented and society-related policy measures seem to be insufficiently designed.The SLCP currently pushes farmers from environmentally damaging production modes toafforestation and grass growing, but alternative income sources are as needed as incentives.Although the Central Government has recognized the absence of strong economy-orientedpolicy support and has tried to remedy this by urging local governments to combine landconversion with level field construction, rural renewable energy projects, relocation offarmers to more fertile and less ecologically sensitive areas, off-farm business developmentand development of pen livestock raising (State Council, 2005a), no concrete supplementarymeasures have been taken or relevant investments made. Previous evaluation studies ofthe impact of the SLCP acknowledge that the sustainability of the program depends uponits ability to provide households alternative employment opportunities. However, none ofthese studies have concluded that the SLCP has a significant impact on off-farm laboractivities (Xu et al., 2006), except for a recent study by Groom et al. (2007), which highlightsthe impact of the SLCP on farmer households’ off-farm decisions by taking into accounthouseholds’ heterogeneous exposure to constraints and the consequent heterogeneousimpact of the SLCP on off-farm labor. Their cautious conclusion points out that some off-farm labor effects come from the SLCP.

According to Groom et al.( 2007), only taking economy-oriented complementarymeasures is not enough to guarantee the sustainability of the SLCP. Because farmerhouseholds are the direct implementers of the SLCP and at the same time the bearers of itsconsequences, it is impossible to achieve either the ecological or the economic objectivesof the SLCP without sustained farmers’ participation and support in converting crop landto grassland or forests, and maintaining it afterwards. Here the notion of social capital isquite helpful (Field, 2003). Although the SLCP is a unified national policy, it has differentimpacts on different groups of households with different amounts of social capital. Althoughthe SLCP aims to achieve a win–win outcome, to diminish the economic constraints onhouseholds and to invert the vicious circle of poverty and ecological degradation, it canonly address the constraints to a limited extent within the subsidized period (Groom et al.,

2 Interview with the vice chief of the National Office of SLCP on 4 January 2006 in Beijing.



2007). In addition to a recommendation of more household-level screening and targetingby Groom et al., as well as an increased focus on institutional constraints, such as thedevelopment of land rentals, tenure security or access to credit, we argue that when usingsuch policy intervention, the participation and social capital of farmers needs to be takeninto account. Particularly in geographically, economically and politically isolated andperipheral communities, the lack of social capital creates serious barriers for farmers engagingin off-farm economic activities. Previous studies have mainly focused on the effect oftemporary off-farm income on poverty alleviation and the impact of SLCP on off-farm labordecisions (Park et al., 2002; Bowlus and Sicular, 2003; Groom, 2005; Ravallion and Chen,2005). The present paper mainly focuses on the difficulties of creating off-farm activities ineconomically and politically isolated communities, and of safeguarding the sustainabilityof the SLCP. During the development of off-farm activities, social relations are important toenable farmers to access information, technology, markets and investment capital. Thedevelopment of self-initiated farmers’ associations/organizations can help in this respectand is crucial for rural development (Pan, 2005; IFAP, 2006).

The hypothesis that guides our empirical study on the implementation of the SLCP inNingxia is: creating financial compensation is not enough to trigger farmers into alternativeincome trajectories when farmer households are geographically, socially and economicallyisolated and politically disempowered, lack assets and the access needed to start off-farmactivities. Therefore, some policies must be put into force to enable these farmers to shift toalternative activities.

III. Implementation at the Local Level: The Caseof Ningxia Autonomous Region

To gain an insight into the perceptions and participation of farmers in the SLCP, we conductan analysis on the Ningxia Autonomous Region, focusing mainly on SLCP implementationand the problems encountered when commencing off-farm activities.

1. Ningxia Autonomous RegionNingxia Hui Autonomous Region is located in northwest China, on the upper reaches of theYellow River. It covers 66 000km2 and had 5.9 million inhabitants in 2005. The region hasexperienced a low economic growth rate since 1978 (Démurger et al., 2002).

Ningxia falls in the arid and semi-arid areas, and has a highly fragile ecosystem.Socioeconomic development is very imbalanced in the region. There is an obvious distinctionbetween the irrigated, alluvial plains along the Yellow River in central and north Ningxia,and the desert steppe region and Loess Plateau in the south. Ningxia’s 8 poor counties



form a block in the southern mountainous area, which covers half of the region.3 In the year2000, 22.8 percent of the total population of Ningxia still lived with an annual income below1000 yuan (Ningxia Poverty Alleviation Office, 2006).

A survey was carried out in 3 southern counties in February 2006: Tongxing, Pengyangand Xiji. The three counties were selected based on the levels of net farmer income percapita, which can reflect the rich, middle and poor situations. The average income level ofour sample is RMB1524 per capita, well below the average rural household net income percapita for Ningxia (RMB2320) and for China (RMB2936) (NBS, 2005).

From each of the 3 counties, 4 townships were selected, and 3 villages from eachtownship. In each county, approximately 110–120 households were interviewed. In total,316 valid household questionnaires from 12 townships were received (see Table 1). Apartfrom basic household characteristics, the questionnaire focuses on farmers’ perceptions ofand experiences with the SLCP and the impact of SLCP on farmers’ livelihood and theenvironment, factors affecting household participation in SLCP, sense of land security,farmers’ involvement in decision-making power, membership of farmers’ organizations,access to education, capital and market information, and risk attitudes and levels of trust indifferent institutions.

2. Sloping Land Conversion Program Implementation in NingxiaFor the poor counties in Ningxia targeted by SLCP, subsidized land conversion is seen asa potential direct contribution to the growth of local GDP. Over half of the total land andfour-fifths of the mountainous land needs to be converted under the SLCP in the south ofNingxia. Almost all sandy land that cannot be used for arable production is located in partof central Ningxia. Thus the SLCP directly focuses on the poor areas in these regions.

3 The 8 counties include: Yuanchuan, Xiji, Longde, Pengyang, Yanchi, Tongxin, Hongsipu and Haiyuan.

Variable Tongxing Pengyang Xiji Total Number of households sampled 121 118 110 349 Average net income per capita (yuan) 1174 1445 1984 1524 Average number of household members 4.5 4.6 4.5 4.5 Average number of labor in household 2.6 2.9 2.9 2.8 Years of education head of household 5.3 5.5 5.1 5.3 Average land per capita after SLCP (mu)a

4.6 3.2 3.7 3.8 Participation rate in SLCP (%) 90 94 99 94 Off-farm labor rate (%) 26 22 17 22

Table 1. Household Characteristics in 3 Counties of Ningxia

Source: Authors’ field research.Note: a1 mu = 0.1644 acre = 0.0667 hectare.



With its promises to protect the environment and to alleviate poverty, the SLCP seemsto meet the urgent needs of Ningxia. Indeed, the SLCP is welcomed by local leaders, withthe slogan “complete the tasks of eight years within three years”. Implementation started in2000. SLCP is listed by regional governments as a key project. A steering group was formedin Ningxia in the same year, consisting of the leaders of the Development and ReformCommittee, the Department of Finance, the Grain Bureau and the Forestry Bureau. In 2003,an SLCP Office was established under the Forestry Bureau for the purpose of administrationand coordination. At the same time, telephone lines were opened to the public for questions,supervision and complaints. The Ningxia Forestry Bureau issued two implementationdocuments in 2000: Administration Measures for SLCP Works and the ImplementationPlan of SLCP Works. Responsibility contracts between the deputy governor and theresponsible county magistrates were introduced as an instrument to specify responsibilitiesand tasks. These institutional arrangements enabled the implementation of the SCLP,including arrangements for publicity, planning, organization and supervision. However,farmers are still excluded from decision-making and operations, even though the SLCP willaffect 1.6 million farmers from 345 000 rural households in Ningxia (Ningxia Forestry Bureau,2006).

By the end of 2005, Ningxia had accomplished the land-to-forest conversion of 11.04million mu set by the Central Government, of which 4.56 million mu was converted from cropland, 6.48 million mu was converted from wasteland and 500 000 mu degraded forests wereprotected for self-recovery. In addition, Ningxia also completed the task of “open grazing-grassland” conversion of 20.8 million mu by the end of August 2006. So far, through theSLCP, the Central Government has invested RMB2.5bn in Ningxia and another RMB3.86bnis intended for compensating land that has been converted (see Table 2) (Ningxia Forestry

Table 2. Land Conversion and Afforestation in Ningxia,2000–2005

Crop land converted to Year Forest

(million mu) Grassland

(million mu)

Afforested wasteland

(million mu)

Central Government investment (million

yuan)

Local government investment (million yuan)

2000 0.2 NA 0.26 55 NA 2001 0.26 NA 0.32 102.6 NA 2002 0.8 NA 1.00 291.6 NA 2003 1.3743 0.0257 1.40 566.1 1 2004 0.4975 0.0025 2.00 630.6 1.5 2005 1.3960 0.0031 1.50 874.276 1.5 Total 4.5287 0.0313 6.48 2520.176 4

Source: Ningxia Forestry Bureau (2006).Note: NA, not available.



Bureau, 2006).The ecological, economic and social benefits from the SLCP so far have been widely

reported by the provincial and local governments and in the provincial and local media.According to the Ningxia Forestry Bureau (2006), although 10.1 percent of the participatinghouseholds reported income increases compared with income levels without SLCP subsidiesand 68.2 percent of the households reported income declines, the government believes thathousehold incomes would further increase after the subsidies stop, because it would taketime to benefit from the converted lands in terms of wood and fruits/nuts harvesting.

3. Off-farm Activities and the Sustainability of the SlopingLand Conversion Program in Ningxia

Although the SLCP has had some positive results, concerns and complaints still remain. Ifwe take farmers’ reactions to and perceptions of the SLCP into account, the future of theSLCP might look less bright than what provincial and national authorities have stated. Thelong-term sustainability of SLCP can only be realized if alternative stable income sourcesare available to farmers.

(1) Off-farm ActivitiesOne of our hypotheses is that off-farm activities are needed as alternative income sourcesto prevent re-conversion of grasslands and forests to cropland. Off-farm activities hererefer to temporary labor export organized by the governments, privately-owned orcollectively-owned rural enterprises, family businesses and wage labor. Only when theseactivities become the main sources of income for farmer households does the reconvertingof forests and grasslands become less necessary as a future livelihood strategy. However,this outcome requires the removal of constraints facing the development of off-farmactivities. The present study focuses on several important “assets” for generating off-farmactivities: risk attitude, access to markets, technology, bank loans and job opportunities.

Our survey shows that the average education level of the household heads is slightlyabove 5 years, or equivalent to primary school level, which is also the average level for allfamily laborers. Many farmers face difficulties in accessing and obtaining necessary assetsfor off-farm activities, because conditions (e.g. information, technical investment, equipmentand market development) are far from ideal. For farmers, the average distance to the marketof farm produce is 13.8 km and to hard surfaced roads 8.6 km. Public transportation facilitiesare underdeveloped. The main means of transportation is the bicycle. Over 65 percent ofthe households do not possess a telephone, making it very difficult to communicate withthe outside world and to access markets. The most common ways to sell products are:directly in the open markets, selling to dealers and exchange for other needed products,



while selling products by orders, or via cooperatives. Under these conditions, 56 percentof the respondents said that in general it is difficult to obtain market information. Over63 percent of the farmers state that they mainly receive information via personal networks,which is based on family and kinships, and hardly via other channels, such as throughgovernments, farmers’ associations, cooperatives, buyers and research institutes. Themost needed information is about markets, new technologies, skills and jobs. In regard toobtaining bank loans, from 2000 to 2005, 35 percent of the households tried at least once toapply for bank loans for developing off-farm activities, and 72 percent of them succeeded.Over 52 percent of farmers choose to borrow money from relatives for off-farm activities,instead of going to banks. The three most important reasons for farmers starting off-farmactivities since 2000 are: reduced income from farming, less labor needed for farming andmore opportunities for organized labor export. The first two reasons push farmers to seekoff-farm activities; the last one has a pulling effect. When being asked what they wouldconsider doing after cropland is converted to forest, 51 percent of the farmers choosejoining labor export and become wage workers, 21 percent would prefer to spend more timeon non-sloping cropland and 14 percent would try to raise livestock using the receivedsubsidies. These findings are consistent with the low risk attitudes of farmers, and highlightthat further policy interventions should be stressed if off-farm economic activities aregoing to increase.

We are particularly interested in how many household heads would be risk-taking toparticipate in off-farm activities. Shifting from crop farming to off-farm activities as a mainincome source can be risky for traditional farmer households with limited education andskills, poor access to information, markets and capital. The farmers’ willingness to moveinto new off-farm activities is affected by their risk attitudes. Four questions about riskattitude were asked:

(i) I will never be the first one to try a new crop variety in the village, it is too risky;(ii) If I see that a business is profitable, I will borrow money to invest despite the risk

involved;(iii) It is impossible to get rich without taking a big risk, because we are too poor; and(iv) I like to buy lottery tickets, because I will get rich if I am lucky.These questions are ranked on a 1–10 scale: 1 is fully disagree and 10 is fully agree. We

present percentages of farmers who answered 1 or 10 in Table 3.The data show, based on the four statements, that the percentage that can be considered

risk-takers ranges between 16 and 30 percent. This indicates that the majority of individualfarmer households are not likely to take significant risks without external intervention andsupport. This is in line with our analysis on trust: household heads in Ningxia havesignificantly higher trust levels towards their family, and reduce risky actions where non-



family relations need to be involved, including government, farmer associations, enterprises,community officials and research institutes.

(2) Sustainability of Sloping Land Conversion Program in NingxiaAfter 6 years of land conversion in Ningxia, 69 percent of the households in our surveyhave observed improvement of the ecological environment and attributed this improvement(e.g. less water and soil erosion, fewer sandstorms and more rabbits, birds and pheasants)to the SLCP. However, in our survey, farmers rank food security as the most urgent need.In contrast to the optimism of the Ningxia Government, 79 percent of the householdsbelieve that they would not have enough grain after the subsidized period. Approximately99 percent of the new forests in Ningxia are ecological forests and persistent drought inrecent years has made it more difficult for residents to benefit immediately from theseforests, putting the maintenance of these ecological forests under threat.4 This comestogether with stagnating developments in generating off-farm activities in Ningxia (NingxiaDevelopment and Reform Commission, 2006).

Only 8 percent of the households believe that they would not re-convert their landback to cropland after the compensation stops. Of households, 26 percent will definitely re-convert their land back to cropland. The remaining group of households hesitates in differentgradations (see Table 4). This also strongly relates to levels of land security. When beingasked about the security over their contracted land, only 29.25 percent of the householdsfelt secure, 32.54 percent felt secure only within the contract period, 30.45 percent wereunsure about their land rights and 7.76 percent had no sense of security at all. This alsoseriously challenges the sustainability of the SLCP’s effects.

The Ningxia authorities have been well aware of the dangers of massive re-conversionof land in the post-subsidy period. On the one hand, the Ningxia Forestry Bureau hasproposed to the National Office for SLCP that the compensation period be extended and

Table 3. Farmers’ Attitudes toward RiskStatements Fully disagree (%) Fully agree (%)

(1) Not try new crop variety 28 53 (2) Borrow money for risky investment 14 29 (3) Get rich with taking risks 24 30 (4) Buy lottery tickets 39 16

Source: Authors’ field research.

4 Ecological forests mainly provide ecological services and take more years to grow in Ningxia. It isestimated that after forests mature, the average income per mu in southern Ningxia will be only 67 yuan,far lower than the current subsidy of 160 yuan per mu (Ningxia Forestry Bureau, 2006).



that further financial support for maintaining ecological forests be provided.5 On the otherhand, several projects parallel to the SLCP that aim to prevent the disaster of re-conversionhave been adopted. Although these government-driven projects have good intentions andhave had some instant effects on living conditions, income levels and off-farm possibilitiesfor poor farmer households, the sustainability of these projects remains questionable.Most of these projects are “do-it-once” projects. Institutionalized effective dialoguemechanisms do not exist between government authorities and farmers. We have found thatsince the implementation of the SLCP, over 87 percent of farmers have never been consulted,77 percent indicate that they could not decide to participate themselves and they don’tknow how to participate in the SLCP, and 80 percent state that it is not possible to refuseeven if they would not want to participate. If long-term sustainability of the SLCP goals isto be achieved, farmers need to be involved in the program. Therefore, governmentinterventions should not only focus on the subsidy period, but should also removeinstitutional barriers and constraints for the involvement of farmers in the policy-makingprocess via the development of farmers’ organizations.

(3) Farmers’ AssociationsLegalization of non-governmental organizations (NGOs), including self-initiated farmers’organizations, has been debated in China for many years. In practice, the currentrequirements for legal registration and operation as an NGO prevent large scale developmentof NGOs. The Farmers Specialized Cooperative Organization Law (nongmin zhuanyehezuoshe fa) was created in an attempt to remove this barrier, which became effective from1 July 2007. However, the effect of the law can only be determined in the long run.

Compared with more developed regions in China, farmers’ organizations in Ningxia are

Table 4. Possibility of Re-converting Land

Likely to re-convert land Frequency of responses Percent (%)

(1) Not re-convert land for sure 26 8.2

(2) Probably not re-convert land 32 10.1

(3) Not clear 110 34.8

(4) Probably re-convert land 66 20.9

(5) Re-convert land for sure 82 26.0

Total 316 100.0

Source: Authors’ field research.

5 Interview with Mr Zhu, Director of Ningxia SLCP Office on 18 May 2006 inYinchuan.



a rather new phenomenon and are mainly found in the developed northern part of Ningxia,where farmers are better exposed to information and integrated in various networks. TheNingxia Association for Science and Technology has been the initiator and promoter offarmers’ technological associations. Currently, there are 460 grass-root associations of thiskind in Ningxia, covering crop growing, livestock rising, agro-product processing, irrigationand transportation. Over 30 000 farmers are members, a relatively small portion of the totalnumber of Ningxia farmers. Moreover, farmers’ associations are still rare in the southernpart of Ningxia. Our survey shows that only 8 percent of the respondents are members ofany farmers’ organization, a very low organizational density. In addition, non-farmorganizations like township and village enterprise (TVE) associations are either little knownor not particularly influential among farmers. Approximately 42 percent of the respondentsbelieve that the most influential local farmer organization is the potato growers association.This is largely because the potato is the main crop and also the major export product toother provinces and countries. Of farmers, 13 percent believe that the vegetable planters’association is the most influential and only 2 percent mention TVE associations. In addition,although 70 percent of the laborers involved in SLCP are women, there is no self-initiatedwomen’s organization in the studied counties. The local branches of the Ningxia Women’sFederation have been extremely active in the villages, but the nature of the All-ChinaWomen’s Federation is more governmental than non-governmental. Its network is an integralpart of the government at various levels and farmers do not perceive it as being independentfrom the government. Our survey shows that only 1 percent of the respondents mentionedthat the women’s federation represents women’s interests in the SLCP. Women’s federationsseem to have influence on family planning and children’s education. Apart from organizingtechnical training, 45 percent of the respondents said that the government did not take anymeasures to protect the interests of women in the SLCP and 48 percent did not know of anySLCP-related measures provided by the government in favor of women.

IV. Conclusions

The above analysis points out some concerns about the sustainability of the SLCP. Thisconcern is based on fragmented national policy formulation and implementation, the lack ofenabling economic policy measures (e.g. for off-farm activities development), the lack offarmers’ participation in the policy-making process and a too universal top-down approachthat has failed to fine-tune household characteristics and to encourage sustained voluntaryparticipation of farmers. Therefore, the SLCP has not stood apart from the other campaign-styled and top-down programs that have been implemented in the past (Xu et al., 2004). Amore fundamental problem behind the unsustainability of the SLCP is the pervasive lack of



investment and policies in local social capital development, especially in very poor regions.This fact also explains why impacts of the SLCP vary from region to region.

There are no silver bullet solutions for reducing both poverty and natural resourcedegradation. To some extent, the SLCP is not different when compared with the previousgovernment interventions that have been aimed at poverty alleviation and ecologicalprotection, as a result of the absence of institutionalized participation of farmers and farmer-initiated organizations. In addition, the SLCP carries some risks for farmers: there are noguaranteed alternative income sources after 5–8 years. Although, in response to theseworries, the Central Government has promised to extend the payment scheme for another2–8 years and has relaxed some restrictions on the use of the converted wastelands tobenefit farmers, the approaches and styles for implementation remain the same (State Council,2005b). Some of the fundamental issues are still not resolved, such as the poor results increating more opportunities for off-farm economic activities.

The Ningxia case, in line with other investigations on the effects of SLCP on off-farmemployment (e.g. Zhi et al, 2004; Guo et al., 2005; Qin, 2002), shows that policies that aim toprotect ecological environment in poor areas will not succeed in the long term unless thereis a focus on future economic development. Farmers’ participation and social capitaldevelopment needs to be taken into account by policy-makers.

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(Edited by Zhinan Zhang)

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