Farmers’ Willingness to Accept Compensation to Maintain the Benefits of Urban Forests

Abstract

The Returning Farmland to Forest Program (RFFP) was implemented in China in 1999 with the goal of supporting environmental restoration by returning significant areas of cultivated land to forest. While afforestation supports long-term ecosystem services like carbon sequestration and the reduction of soil and water loss, it also reduces the amount of available arable land, putting financial pressure on those who depend on it for their livelihoods. In an effort to balance both ecological and economic benefits, regional governments offer financial compensation to farmers to offset these pressures in the form of a dollar amount per hectare of reforested land. The current study explores participants’ willingness to accept pay (WTA), along with the difference between the offered per hectare compensation and the amount deemed acceptable by RFFP participants in the region. To this end, 92 households from the representative afforestation area were surveyed in Huining County, Gansu Province, China - an area of strategic ecological importance in the Loess Plateau. The results showed 12.0% of the surveyed respondents to be satisfied with the current compensation policy, while 88.0% of respondents were not. The respondents’ lower and upper WTA limits were $221/ha/year and $1331/ha/year, respectively, with an average WTA of $777/ha/year. The compensation that respondents would be most willing to accept was distributed in the $444–888/ha/year and the $889–1331/ha/year ranges, accounting for 37.0% and 31.5% of the total responses, respectively. Gender, age, and education were found to be the main factors influencing a respondents’ WTA. Results of the survey suggest that the actual compensation amount ($355/ha/year) is much lower than respondents’ WTA, and that compensation measures and policies should be improved to guarantee a basic income.