Livelihood Impacts of the Conversion of Cropland to Forest and Grassland Program

Abstract

Land use changes induced by the Conversion of Cropland to Forest and Grassland Program are found to provide farm households sampled in four counties from Shaanxi and Qinghai Provinces with increased net profits. This result is found to be robust for a range of discount rates and output price projections. The net present value of the difference in farm profits with and without the Program is found to be positive even when payments made under the Program are subtracted from with Program profits. Variations in the impact of the Program on farm household net profits were observed across the county samples. These results suggest that reversion to pre-Program land uses is unlikely as long as farmer's rights over converted land are well defined and defended.