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17 A policy review on watershed protection and poverty alleviation by the Grain for Green Programme in China

Li Zhiyong[26]


The rapid development of the Chinese economy is still confronted with constraints from deteriorating environment and rural poverty issues. It has become a significant policy option in maintaining the high growth, efficiency and sound development of the Chinese economy to rehabilitate forest resources, improve ecological conditions, increase farmers’ incomes in a coordinated development of population, resources and environment. The Grain for Green Programme, as a CDM activity of Chinese style, launched on trial in 1999 and implemented in 2002 across the country, is the biggest land-use transition, watershed management and poverty alleviation programme involving the largest population in Chinese history and across the globe. It covers 25 provinces/regions/cities over 1600 counties, involving 15 million households and 60 million farmers. Hence the Grain for Tree policy has a significant bearing on the ecological protection and poverty alleviation of the farmers in the soil erosion- and water erosion-prone regions. A review and assessment of the backgrounds, essentials, effects, problems and trends in the Grain for Tree policy are of great significance for both China and the other developing countries in the world in their efforts to combat the deteriorating environment and alleviate poverty.


Ecological improvement and poverty alleviation make demands on the Grain for Tree policy

China is a big mountainous agricultural country. In the past five decades vast forest lands and grasslands have been reclaimed into farmlands due to pressure arising from increasing population and grain demand. This practice has aggravated soil and water erosion and land desertification. There are more than 6 million ha of farmland with a slope of over 25 degrees in China. The annual volume of silt flowing into the Yangtze River and Yellow River reaches over 2 billion tonnes, among which two-thirds come from sloped farmlands.

The findings of the Second National Remote Sensing Inventory on Soil and Water Erosion released in 2002 indicate that the area prone to soil and water erosion in China accounts for 37.5 percent of the national territory and the annual volume of soil erosion reaches over 5 billion tonnes. In addition, China is suffering from a serious shortage of water resources, with per capita share of water resources reaching merely 2000 tonnes. It has become one of the 13 water-poor countries in the world. Although China’s poverty reduction policy has helped the 220 million poverty-stricken population solve the problem of food and shelter, currently a rural population of 30 million is still well below the poverty line.

Economic development and a good harvest of grain have offered policy support for the Grain for Green Programme

China’s enhanced economic strength offers a sound economic basis for it to map out and implement the Grain for Green Programme. Since the policy of reform and opening up was initiated in 1978, China has maintained a sustained and rapid economic development for over two decades. Its GDP in 2002 exceeded RMB1 trillion for the first time, with a remarkable growth in its overall national strength and fiscal revenue, thus making it possible for the government to contribute certain financial and material resources to ecological improvement for such programmes as the Grain for Green Programme.

Consecutively good harvests of grain offer favourable conditions for the implementation of the Grain for Tree policy. First of all the policy would not produce a great impact on national grain security because of the abundant storage of grain. Since 1995 China has experienced consecutive years of good harvest, with the grain output exceeding 500 billion kg for three consecutive years (1996, 1998 and 1999), thus giving rise to a situation where supply exceeds demand in a successive and structural manner. If 14.67 million ha-1 of farmland were to be converted into forest land and grassland by the year 2010 and 2250 kg ha-1 and -11500 kg ha-1 of grain were to be subsidized for the Yangtze River catchment and southern region as well as the Yellow River catchment and northern region respectively, the grain subsidies in peak years would amount to 23.37 billion kg, taking up merely 4.7 percent of the average grain output nationwide during the 9th Five-Year-Plan period. Secondly, sloped farmland has a low grain yield, which would not have a great bearing on the national grain output. Sloped farmland is mostly impoverished land with poor water supply and fertility, serious soil and water erosion threats as well as low and unstable yield. A farmland with a slope of over 15 degrees produces on average only 1770 kg of grain per hectare. Even if all of the 14.67 million ha of sloped farmlands and sandificated farmlands were converted into forests according to the plan, only 26 billion kg of grain would be reduced annually across the country, taking up only 5.2 percent of the average grain output nationwide during the 9th Five-Year-Plan period. It is obvious that conversion of sloped farmlands and sandificated farmlands into forests would not produce a significant impact on the equilibrium of supply and demand for grain nationwide.


In order to ensure the successful implementation of the Grain for Green Programme, the Chinese Government has issued the Regulation of Grain for Green in 2002 and has adopted a range of innovative and operational policy measures with Chinese characteristics.

Grain and cash subsidy policy

Criteria for grain subsidy: 2250 kg of grain are subsidized annually for each hectare of converted farmland in the Yangtze River catchment and southern region and 1500 kg of grain are subsidized annually for each hectare of converted farmland in the Yellow River catchment and northern region. Criteria for cash subsidy: RMB300 are subsidized annually for each hectare of converted farmland. The duration for grain and cash subsidies: subsidy for conversion of farmland into grassland is valid for two years, subsidy for conversion of farmland into economic forest is valid for five years and subsidy for conversion of farmland into ecological protection forest is temporarily valid for eight years. The cost for grain subsidy is borne by the national revenue. During the period of grain and cash subsidies farmers must continue their afforestation efforts under the unified leadership of the county or township government in barren hills where conditions permit after they have converted their existing farmlands into forests.

Subsidy policy for seeds and seedlings as well as afforestation cost

Subsidies for seeds and seedlings as well as afforestation cost for the Grain for Green Programme and barren hills are borne by the government, calculated in terms of RMB750 per ha. The sloped farmlands which have not been contracted out to individual households and fallow sloped farmlands would not be eligible for grain and cash subsidies, but can be afforested as barren hills. Subsidies are given for afforestation costs that are used only for seeds and seedlings, and the lands are closed for regeneration and maintenance instead of for other purposes.

Preferential taxation policy

If the converted farmland is subject to agricultural tax and grain subsidy reaches the previous annual yield, grain subsidy would be handed out to farmers after the agricultural tax has been deducted by the state as of the year when the conversion programme is implemented. If the grain subsidy does not reach the previous annual yield, agricultural tax would be deducted accordingly and in a reasonable manner. If the converted farmland is not subject to agricultural tax, agricultural tax must not be deducted from the grain subsidy regardless of the previous annual yield. For the counties where the Grain for Green Programme is implemented, the drop in collection of the agricultural tax would be subsidized properly by the national revenue in the form of transfer payment.

Guarantee policy for forest tenure

The government is implementing a policy of “those who convert sloped farmlands into forests and manage the forests would benefit from them”. It adheres to the mechanism of contractual operation by individuals with a combination of responsibility, power and interests. Following the implementation of the Grain for Green Programme, farmers’ tenure to tree crops established on converted farmland and barren hills must be guaranteed. Farmers are entitled by law to go through procedures for changes in land use and be provided with certificates of tenure to tree crops by the People’s Government above county level. The contracting-out duration would extend to 50 years after farmers have established plantations on farmlands and barren hills. Farmers are entitled by law to inherit and transfer the contract and extend it upon expiration in conformity with relevant laws and regulations.

An ecological protection forest-biased policy

The proportion of ecological protection forest must not be lower than 80 percent when counties are regarded as accounting units. Only seeds and seedlings and afforestation subsidies, rather than grain and cash subsidies, are provided for the economic forest established by exceeding the prescribed proportion.


During 1999-2002, 7.7 million ha of farmland were converted into forest nationwide, including 3.72 million ha of farmland-turned forest and 3.98 million ha of plantations established on barren hills. In 2002 alone the Grain for Green Programme involved 5.162 billion kg of grain and RMB458 million, from which 10.31 million farmer households benefited. Implementation of the Grain for Green Programme has altered the traditional farming practices of the Chinese farmers, achieved agricultural restructuring, increased the farmers’ incomes, improved the ecoenvironment and promoted the local economic development and poverty reduction process in poverty-stricken areas.

Some achievements have been made in the grain for ecology programme and the deteriorating ecological conditions in some programme areas have been improved to varying degrees.

The implementation of the Grain for Green Programme has also alleviated soil and water erosion and land sandification. The serious soil and water erosion in some southern areas, where trials of the Programme were first undertaken, has been mitigated, with water in some river catchments turning clear and the ecoenvironment improved. Some relevant industries like tourism and animal husbandry have been boosted and local economies further developed. The area proned to soil and water erosion in the Grain for Green Programme area in Tianshui City, Gansu Province, has been reduced from the previous 314.3 km2 to 90.74 km2, a drop of 71.1 percent, and the forest and grass cover has risen from 14.5 percent to 41.8 percent. Over 90 percent of the farmer households under survey contend that the ecoenvironment in the vicinity of the village has been improved or will be able to be improved following the implementation of the Programme.

Remarkable social benefits have been achieved in opening the granaries to relieve the poor, and the farmers’ poverty reduction process has been accelerated. Over one-third of farmer households in most programme provinces (or regions) are involved in the conversion of farmlands into forests. Some farmers engaged in the conversion programme have obtained not only a reliable supply of grain but also increased their income by engaging in diverse economic undertakings and sideline production.

The Grain for Green Programme is also the largest project for poverty alleviation. The rural households that convert their farmlands can be directly subsidized with grain and cash, and the poor rural households, especially those from ecologically deteriorating areas, benefit more than the rich rural households. Among the 180 pilot counties covered by the Programme across the country in 2000, 104 counties were poverty counties by national standard, taking up 57.8 percent of the total. Among the 333 000 rural people of Minhe County in Qinghai Province, there are about 100 000 under absolute poverty with an annual income of less than RMB625. The poverty in Minhe County was mainly caused by ecological deterioration, which had resulted in no crop harvest for consecutive years, and thus no grain ration for rural households. Under the Programme, this county has converted 8000 ha of cropland. The cash and grain subsidies provided by the Programme have immediately released the hunger problem of these rural poor.

The agricultural industry structure has been readjusted effectively and the rural economy has further developed. The Grain for Green Programme has helped to change the traditional way of extensive cultivation with little harvest and to readjust the inappropriate land-use structure. Since the Programme started, government agencies at all levels have prompted the development of farmland infrastructure, captive breeding, green food, forest ecotourism, and green industry. Thus an economy with specific characteristics has been boosted which also facilitated a shift from agricultural production to tree crop production, stockbreeding and other secondary and tertiary industries. The rural industrial structure has been adjusted appropriately and farmers’ economic income has been increased. The Grain for Green Programme at Longhui County in Hunan Province adopted a model of combining forestry with medicinal plants so that water and soil have been well conserved while achieving a high economic value. An output value of RMB60 000 per ha can be secured when the medicinal plants mature. The county has established a total area of 1200 ha of medicinal plants, which will bring an income of RMB72 million for local farmers four years from now.

The policy of conversion of cropland to forests policy has received extensive support and participation by local farmers, and has become the largest and most successful community forestry project. Since its pilot phase started in 1999, the Grain for Green Programme has covered altogether 25 provinces (autonomous regions and municipalities) which include more than 1600 counties, 20 000 plus towns and townships, more than 100 000 villages, over 15 million rural households and more than 60 million farmers. The programme has already become the largest participatory community forest project in China. The design of the Programme was transparent and open, and therefore won extensive support and participation by the rural households. The Luding County in Sichuan Province assigned the task of converting 2667 ha of cropland down to 10 towns and townships, 50 villages, 9909 households and 18 301 plots: such a well-organized forest programme was unprecedented. According to the survey of one hundred households that converted their croplands, about 94 percent of them signed contracts with the village, around 93 percent acknowledged that the village had revealed information on converted area and cash and grain subsidies of each household, and about 89 percent agreed that the information was accurate.


The Grain for Green Programme is a new policy in China. There have been some difficulties and problems with the policy that jeopardized the effective implementation of the policy and the fulfillment of the policy goal.

The policy inconsistent and unstable

Firstly, local governments and farmers fear that there will be changes to the Grain for Green Programme. In order to fully benefit from the preferential policy at an early stage, they competed with each other to convert their croplands and also converted more than what was planned in the Programme. Secondly, although it was stated very clearly in the policy that “people who convert their croplands should plant trees, and those who manage the forests should benefit”, it has remained to be an issue of great concern as to how farmers could reap economic benefit from the trees especially those ecological forests that were established under the Programme when the subsidy ends. Thirdly, the forest management and utilization policy eight years after the Grain for Green Programme is unclear. Also constrained by the logging quota, the rural households that converted their croplands and other planting units lost interest in establishing ecological forests. All these have hampered the timely achievement of the policy’s ecological goal.

Watershed management not emphasized

The main objective for the Grain for Green Programme is to increase vegetation cover, bring water and soil erosion under control, and improve the ecosystem through providing grain for green in return. Therefore the Programme should cover sources of big rivers, river banks, steep slope cultivation areas around lakes and reservoirs, and sandy cultivation areas that are severely threatened by sandstorms. There are some problems emerging during the implementation of the Programme so far. Firstly, the focus of ecosystem restoration is not prominent in general. In some areas, the conversion task was designated on an equal benefit sharing basis; therefore the distribution of conversion areas was segmented and the Programme was not able to bring large areas of degraded land under control. Secondly, some ecologically fragile areas and key areas of ecological importance were not assigned with conversion tasks or with very few tasks; thus the watersheds along some big rivers were not harnessed as priority areas. This breaches the principle of putting key ecological areas in the first place.


Aiming at the problems emerging during the implementation of the Grain for Green Programme, there will be need for further improvement of the policy in three areas in the future given that the current policy is implemented effectively by the central and local governments. The proposed improvement will contribute to the long-term effectiveness of the policy, the realization of watershed management, poverty alleviation and the achievement of the economic development target.

The rural industrial structure needs to be further adjusted and optimized in order to ensure the long-term effectiveness of the conversion of cropland to forests policy. Firstly, the land-use structure needs to be readjusted to change the traditional way of extensive cultivation with little harvest. Grain production on steep slope cultivation land that has low yields because of deteriorating natural conditions should be further reduced. Instead, trees and pasture grass should be established to increase land-use efficiency. Likewise, grain production can be replaced by growing fruit trees, medicinal plants and other tree crops, so as to readjust the internal structure of the planting business. In areas that have tourism resources, forest ecotourism should be developed with local characteristics. Secondly, farmland infrastructure needs to be further developed to improve grain productivity. At the same time the conversion of cropland is taking place, rural households that participated in the programme should be left with a certain amount of farmland for subsistence. Grain productivity in those reserved farmland should be greatly increased through technological improvement and intensified management. Thirdly, the growing of high quality and new variety of products such as fruit trees should be promoted to increase the farmers’ incomes. Fourthly, the traditional way of grazing should be improved and captive breeding should be promoted. Livestock species should also be restructured and the integration of captive breeding, half grazing and half breeding, and grazing during summer and breeding during winter should be adopted to effectively protect natural pasture and forests. Fifthly, township enterprises should be promoted to release the reliance of local farmers on land resources. Township enterprises of forest industry, tourism industry and processing industry in the areas covered by the Programme should be greatly developed to increase the farmers’ incomes.

Rural energy structure needs to be further improved for the effective conservation of forests established under the conversion programme. The strategy of concerted economic and environmental development should be followed to integrate rural energy development into the conversion programme and to release the energy reliance of local farmers on the newly established forests. Based on the overall objectives of energy and environmental development and through integrated planning, the resources need to be allocated rationally, fuelwood forests need to be established, and renewable energy industry needs to be developed. Supportive economic policies should be adopted to enhance the development of rural energy such as methane supply, energy-saving kitchen range, and small-scale hydroelectricity projects. A rational energy consumption system with multiple energy sources supplementing one another should be established and an organizational structure and service system for rural energy consumption needs to be completed. Therefore energy use for rural livelihoods and the issue of rural energy can be solved comprehensively and systematically, with the ecological environment being protected and concerted development of economy, environment and society being achieved.

The development of small townships should be boosted to encourage ecological immigration and to release the pressure of population and agriculture in water and soil erosion areas. The conflict between population and land has become more prominent since the Grain for Green Programme was implemented. Although the policy requires grain subsidy being provided by the national government, such subsidy is limited to certain time frame. If follow-up measures are not well considered, once the subsidy is stopped, farmers will resume cultivation on even steeper slopes for survival. This will lead to more severe ecological deterioration. Therefore, the conversion of croplands to forests should be linked to ecological immigration. By doing this, not only the ecological environment can be harnessed and improved, but the newly established forests in the key ecologically fragile areas can also be well maintained. Ecological immigration should be carried out together with the development of small townships, the creation of employment opportunities and new skills training in order to improve the adaptability of the immigrants. The investment on ecological immigration should be mainly from the central and local governments. It is also possible for the national or local governments to establish a special fund for ecological immigration within the ecological programmes such as the Grain for Green Programme.


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[26] Research Institute of Forestry Policy and Information, Chinese Academy of Forestry, Beijing, China; E-mail:

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