Study On The Compensation Standards Of Grain For Green Project In The Loess Hilly Region

Grain for Green Project (GGP) is the largest forestry project which has the greatest scaleand extension and involves the most population. A core issue of this project is to compensatefarmers who converted farmland into grassland and forest, which can solve the farmers’livelihoods and strengthen the project’s achievement as well. Corresponding to the actualproblems in studying and practicing the current national compensation standards andmechanism, this paper explored a theoretical GGP compensation model for the Loess Plateauregion based on the combined perspectives of opportunity cost, afforestration cost, carbonsink, and thinning benefits. After that, we calculated and set up the GGP compensationstandards against the current compensation policy by an empirical analysis in Ansai County.The main conclusions are:1, By exploring a theoretical GGP compensation model for the Loess Plateau region, anempirical analysis in Ansai County was committed to calculate the compensation standardsand life. The results show that: the GGP compensation life can be divided into four phases asthe initial (1-2years), early (3-14years), medium (15-21years) and late (22-30years).Farmers would be initially compensated for the opportunity cost of returning farmland toforest and grassland and then compensated to prevent farmers thinning in terms of woodthinning and carbon sequestration. The compensation standard is expressed as an S-shapedcurve, with low values in the medium phase and high in the early and late phases (initial4485yuan/ha A, early2335yuan/ha a, medium/ha a, and late4799yuan/ha a). Thecompensation life is23years, with the the first14years and9years after for the initial, earlyand late phase respectively. The overall compensation amounted to80,184yuan/ha.2, Based on the general research,4scenarios were designed as carbon sink without woodthinning (scenario A), wood thinning without carbon sink (Scenario B), wood thinning withcarbon sink (scenario C) and no carbon sink or wood thinning (Scenario D). Thecompensation life is17years (scenario B),14years (Scenario C) and30years (Scenario D)with compensation amount being52,999yuan/ha (scenario B),36995yuan/ha (scenario C)and219,956yuan/ha (scenario D) respectively. The results show that introducing the CDMand moderate thinning into the GGP could reduce the years of compensation amount and life. In fact, the scenario D essentially is a permanent compensation, setting up a GGPcompensation system.3. Scenario A is supposed to be the best, as its achievement is greater than the currentcompared against the the current national compensation standards. National compensationvalue is2400yuan/ha a for the first phase and1200yuan/ha a for the second, with theaverage being2673yuan/ha A. The current national compensation policy has been initiatedfor16years, whist the compensation life proposed by our study is23years. The overallcompensation amount of current national policy is28,800yuan/ha a, while36,994yuan/ha a would cost by our compensation system for the first16years.4. According to recent development trend as well as our analysis and calculation, theGGP compensation should continue after the last2compensation phases, which could beextended to9years more at least with the standard being5709yuan/ha a. In addition,Ansai County still needs51,384yuan.