Study On The Economic Behavior Of Rural Households In The Context Of Grain For Green Project

Soil erosion is one of the most serious environmental problems facing our country. Western China has always been one of the regions which has the most vulnerable ecosystems, and also one of the most concentrated areas of poverty population in China. Under the pressure of surviving and improving household income levels, the irrational behaviors of land development and utilization like deforestation on steep slope, destruction of grass are becoming more common, which brought great damage to the ecological environment in this region. In 1999, in order to curb the trend of increased soil erosion, Sichuan, Shaanxi, Gansu Province first launched pilot project of conversion of cropland to forest.The goal of this project which was designed by the central government is not only to achieve the "protection of the ecological environment", but also to achieve the "promotion of farmers’ income increase", while also taking into account the agricultural structure adjustment and optimization. This diversified policy objectives will inevitably increase the difficulty of implementation of the Grain for Green Project. The continuous promotion of this project breaks the traditional equilibrium state of production and operation of farmers, changes the resource endowments and constraints of households. It will have a certain impact on the economic behavior of farmers. And correspondently, the household economic behavior in reforestation area, to some extent, determines the possibility of achieving these goals.Then, what are the effects of the conversion of cropland to forest on the economic behavior of farmers? Has the project increased farmers’income after it has been implemented more than ten years? In addition, from the perspective of environmental optimization, what are the ecological agriculture production mode choice behavior of those farmers who stay in the local agricultural operations and its effects, direction and the mechanism? Only after we figure out the law of the changes of household economic behavior and its influencing factors, can we find the kernel and microscopic mechanism of sustained and effective promotion of the Grain for Green Project, and have the possibility of seeking out an environment-friendly, efficiency and income increasing agricultural development way for the poor and ecologically fragile areas in western region.Southern Shaanxi, with Qinling Mountains to the north, Bashan Mountains to the south, Hanjiang River flowing through from west to east, is the junction of north and south water systems, also that of warm temperate zone and subtropical zone, and also is the main water source of Danjiangkou reservoir, the source area of the middle route in the Water Diversion Project. The geological structure in this area is complicated, and debris flow, landslides and other geological disasters occur frequently. Because of the harsh natural conditions, lack of basic living conditions and the low level of agricultural modernization, the farmers in Southern Shaanxi are generally quite poor. In May,2012, the State Council approved the "Regional Development and Poverty Alleviation Plan of Qin Bashan Area", in which Qin Bashan Area was listed as one of the 14 concentrated destitute areas since its impoverished population accounts for as high as 44.64% of agricultural population.Beginning in 1999, Southern Shaanxi became the first pilot area in Grain for Green Project. In 2001, approved by the State Council, the State Environmental Protection Administration listed Qinling Mountains in the first batch of national ecological function reserves in China, therefore the area belongs to the State-level restricted development zones and ecological function protected areas. The backward economy and the special responsibility to protect forming a strong contrast, makes it a quite arduous task to seek a breakthrough development in the premise of limited development.As the source area of the middle route in the Water Diversion Project and one of the most concentrated areas of impoverished population in China, the economic behavior of farmers in Southern Shaanxi in the background of the Grain for Green Project will directly determine the region’s ongoing Grain for Green Project and the local agro-ecological environment quality. Therefore, looking for the changes in households’economic behavior before and after the conversion of cropland to forest and its negative effects on the continuous implementation of the project, and guiding farmers to orderly move out or take ecological agriculture production mode, is the inevitable choice to ensure that the special ecological environment in this area can be maintained, to alleviate poverty of farmers, and to increase farmers’income.The overall objective of this study is, on the basis of comparing and analyzing the changes of households’ economic behavior before and after the conversion of cropland to forest, to illustrate the characteristics, influencing factors and the mechanism of their impact on the implementation of Grain for Green Project and to explore the microscopic mechanism of promoting Grain for Green Project persistently and effectively. Meanwhile, this study also aims to investigate the direction and mechanism of the impact of the conversion of cropland to forest on the employment behavior and household income quantitatively, and based on the farmers’ specific production behavior of selecting ecological agriculture production according to local characteristics, to analyze empirically the influence factors of the optimization of the households’ economic behavior in this context. It also attempts to explore the policy focus of promoting the full utilization of local agricultural resources, enhancing the income levels of farmers and raising the agro-ecological level in this background.Based on the above research contents, the main conclusions of this study are as follows:1. Farmers planting, investment, income and consumption structure have undergone significant changesTwelve years since the implementation of Grain for Green Project, influenced by the shortage of cultivated land resources, which resulted from the conversion of cropland to forest, and the goal of improving family farming income, the local agricultural production structure has undergone significant changes. The ratio of farmers’ income from planting, income from forestry, and that from animal husbandry has changed from 1:0.08:0.42 (before conversion of cropland to forest) to 1:0.13:0.68 (after conversion of cropland to forest), which shows that the local forestry and animal husbandry has developed rapidly compared with the traditional planting industry. In the planting industry, the sown area of wheat, rice, corn and other traditional crops showed a downward trend year by year, while the planting area of the cash crops such as rape, tea, herbs, and vegetables is substantially increased.After the conversion of cropland to forest, the intensification degree of land management of unit area and modern agricultural technology utilization levels were significantly increased, and the average yield of crops also increased greatly. In forestry, the project accelerated the farmers’ afforestation pace and the forest coverage rate increased remarkably. The development of the distinctive economic forest trees like walnut, chestnut, pepper has taken shape, and become an important source of income of local farmers. However, due to long production cycle of forest products, the forest products of most farmers have yet to complete the harvest period. As a result, the farmers’forestry income share is not high. In animal husbandry, the area has formed various ecological farming methods, through exploration. The average amount of pig slaughter and broiler slaughter increased apparently, and the level of large-scale breeding of livestock and poultry improved significantly. Livestock and poultry breeding has become the main source of the increased income of farmers.After the conversion of cropland to forest, the income with the fastest growth of farmers in Southern Shaanxi is transfer income, followed by wage income, the income from animal husbandry and forestry, and that with the slowest growth is the income from planting. After ten years, wage income has replaced farming income as the largest source of income for farmers in Southern Shaanxi since the Grain for Green Project promoted non-farm employment of farmers, followed by animal husbandry income, transfer income, with forestry income accounting for the lowest proportion of total household income.In consumer spending, food expenditure is still the biggest item of expenditure of households living in Southern Shaanxi(with obviously decreasing proportion, indicating the farmers in the region has increased in alluence) residential spending the second, transfer expenditure the third, health care spending fourth, transportation and communication expenses the fifth (rising fastest), educational and cultural entertainment the sixth (dropping three places), clothing expenditure the seventh, household equipment spending (mainly refers to household appliances) the last. It should be noted that the energy consumption structure in reforestation area has also undergone a welcome change. Biogas, solar energy, natural gas and other clean energy gradually replaced firewood as major energy sources of life and production in Southern Shaanxi rural areas.Overall, the Grain for Green Project, to a certain extent, contributed to the improvement of agricultural production structure in this region. Farmers’ consumption level has been improved to some degree, but the ability and willingness of consumption is insufficient.2. Non-farm employment and income levels were significantly increased in the context of conversion of cropland to forestThe empirical results show that, compared with non-returning families, the implementation of Grain for Green Project can effectively promote the growth of total household income, thus achieving the goal of poverty reduction. The Grain for Green Project has changed the employment behavior of farmers’, prompting the surplus agricultural labor force in reforestation area to transfer to towns and non-agricultural industries, thereby increasing the non-farm income level of rural households. Survey results show that compared with non-returning households, the number of non-agricultural labour of the households who conduct conversion work significantly increased and the phenomenon of taking non-agricultural part-time jobs is more widespread. So their non-agricultural income is growing significantly faster than the the households who do not conduct conversion work.Empirical results further demonstrate that the health condition, education level, as well as the agricultural technical training of the householder, and the location in the outskirts of town has positive effect on the household income level. Among them, the location in the outskirts of town has positive impact on the total household income, agricultural income and non-farm income.For different income brackets, the effects of the conversion of cropland to forest on total household income show some differences. For the middle and lower income households, the conversion of cropland to forest exerts positive influence on the increase of agricultural income, while for the high income households, it mainly devotes to the increase of non-farm income.Further DID Model estimates the net effect of the Grain for Green Project on the income levels of the households who conduct conversion work. The results also show the policy significantly increases total household income and non-agricultural income levels, while it exerts no significant positive effec on the level of agricultural income. However, the two significant levels are lower than the results obtained in the multiple regression model, which suggests that other factors (such as the improvement of labor market, reasonable upgrade of agricultural prices and other government’s agricultural policies) also promote the increase of the total household income and non-agricultural income levels of the farmers.3. Agricultural technical training, agricultural products quality and safety awareness and government policy support and other variables directly affect the consciousness and choice of the ecological agriculture production of farmer.Survey results show that only 34.7%of Southern Shaanxi ruaul households engaged in ecological agricultural production. The empirical results show that the householder’s age is positively related to the degree of ecological agriculture awareness; farmers’educational level and cognitive ratio positively correlated; whether the farmers are involved in the conversion of cropland to forest and the degree of ecological agriculture awareness has significant relationship, the involvement in the conversion of cropland to forest raising the awareness level of farmers; whether to participate in agricultural training impacts greatly on ecological agriculture awareness of farmers; the awareness of the farmers who participate in the project is higher than the non-participating farmers; the degree of difficulty in obtaining information affects the cognitive behavior of farmers, the more accessible the information is, the higher the farmers’cognition level of ecological agriculture is; the more attention the farmers pay on the quality of agricultural products, the higher the farmers’cognition level of ecological agricultural production mode is.The empirical study on the farmers’choice behavior of ecological agricultural production mode indicates that the farmers’age and level of education, whether to participate in the conversion of cropland to forest, as well as their cognitive behavior of ecological agriculture exerts insignificant effects on their choice behavior of ecological agricultural production mode. But whether the farmers receive agricultural technical training influences their choice behavior.Agricultural technical training for farmers promotes the farmers to choose ecological agricultural production. Whether the government implements technical and financial support policies has a notable impact on the farmers’choice behavior of ecological agricultural production mode and the rural households with policy support have greater possibility to choose the ecological agricultural production mode. The level of concern on the agricultural product quality safety also has a great influence on the choice behavior; the more they are concerned, the higher the possibility of ecological agricultural production is.In order to make the rural household economic behavior will be more conducive to the protection of the ecological environment and the adjustment of rural industrial structure, and thus promote the sustained and effective implementation of Grain for Green Project, based on foregoing conclusions and from the perspective of optimizing economic behavior of rural household, this study puts forward the following policy proposals:implementing a long-term, floating reforestation subsidy policy; combining ecological relocation project and speeding up the urbanization process of Southern Shaanxi rural areas; improving the rural education system and improving the farmers’quality of human capital; expanding channels of non-farm employment for the farmers in reforestation area; establishing and perfecting the forest right trading market; the government providing policy recommendations for long-term technical and financial support.