Conservation Payments, Off-Farm Labor, and Ethnic Minorities: Participation and Impact of the Grain for Green Program in China

The Grain for Green program in China, a nationwide cropland set-aside program aimed at soil erosion prevention and poverty alleviation, was begun in 1999 and quickly expanded to 25 provinces, covering 32 million households. Its effects on participating households are well studied, but the role of ethnic characteristics is less well investigated. Given the overlap of areas covered by Grain for Green and areas inhabited by ethnic minorities, where development is a long-unresolved problem, it is important to determine how ethnic minorities react to, and benefit from, the Grain for Green program. This study investigates participation in the program by ethnic minorities and estimates its impact on their off-farm labor supply, compared with that of the ethnic majority, Han. We find that ethnic minorities were more likely to participate in the program, but enrolled similar area of land per household. However, ethnic minorities did not increase off-farm labor supply after participation in Grain for Green, while Han participants increased their off-farm labor supply significantly. These findings raise concerns that Grain for Green may have widened the income gap between Han and ethnic minorities. This study also provides important policy implications on sustainable land management for less-developed regions.