Does household composition matter? The impact of the Grain for Green Program on rural livelihoods in China

a r t i c l e i n f o Keywords: Payment-for-ecosystem-service Family structure Sustainable livelihood Wage-labor supply This research introduces family composition into the sustainable livelihoods framework for policy analysis. We apply this approach to a case study on the Grain for Green Program in western China. Using recent survey data from Zhouzhi County, we show that the impact of the policy on rural livelihoods varies across household compositions. The environmental program neither targets asset-poor households, nor does it necessarily shift the on-farm labor to non-farm sectors, which would improve household incomes (after controlling for the effect of assets). Households with children but without the elderly tend to have lower migration rates and lower incomes after participation in the program. Policy strategies should consider household heterogeneity, particularly household composition in rural China. The Grain for Green Program (GFG) (also known as the Sloping Land Conversion Program), is one of the largest payment-for-ecosystem-service (PES) experiments in the world in terms of scale, payment, and duration. Initiated in 1999, the program aimed to increase vegetative cover over 32 million hectares by 2010, of which 14.7 million hectares would be converted from cropland on steep slopes back to forest and grassland. It was intended to have beneficial ecological and socioeconomic effects, immediately or potentially, to A number of studies show that the program may benefit poor participants if they can receive payments more than the opportunity costs of the retired land. Retiring sloping lands may reduce inefficient agriculture, and payments from the program may reduce poverty and negative externality by relaxing local institutional and market constraints (Groom et al., 2010; Uchida et al., 2009). By increasing investment in local infrastructure and developing tourism industries in program areas, policymakers are expecting to see the shift of surplus labor to more sustainable and lucrative activities after the program, and indeed, to improve the economic structure of rural china (Wang et al. However, it is not necessarily true that PES will benefit all households , even though policy designers were, on average, quite willing to overpay the participants of the program relative to the opportunity costs of the retired land (Bennett, 2008). Economists have provided only weak evidence that the program was benefiting the poor, and that participants began to shift the labor freed by the program to off-farm activities (Uchida et al., 2007). A survey also showed that only 30% of the labor …