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A factor-income approach to estimating grassland protection subsidy payments to livestock herders in Inner Mongolia,China
Institution:1. Dyson School of Applied Economics and Management, Cornell University, 434 Warren Hall, 137 Reservoir Ave., Ithaca, NY 14850 USA;2. Department of Applied Economics, University of Minnesota, 218J Ruttan Hall, 1994 Buford Ave., St. Paul, MN 55108-6040 USA;3. Department of Geography, McGill University, 432 Burnside Hall, 805 Sherbrooke St. West, Montreal, Quebec H3A0B9 Canada;4. Department of Grassland Science, Inner Mongolia Agricultural University, 306 Zhaowuda Rd., Hohhot, Inner Mongolia 010018, China;1. Faculty of Humanities, Social Sciences and Education – UiT – the Arctic University of Norway;2. Faculty of Bioscience, Fisheries and Economy, UiT – the Arctic University of Norway, Norway;3. Faculty of Humanities, Social Sciences and Education – UiT – the Arctic University of Norway;4. Faculty of Bioscience, Fisheries and Economy, UiT – the Arctic University of Norway, Norway;1. The University of Queensland, Australia;2. The University of Melbourne, Australia;3. Delft University of Technology, the Netherlands;1. Department of Natural Resources, 111 Fernow Hall, Cornell University, Ithaca, NY 14853, USA;2. Belfer Center for Science and International Affairs, John F. Kennedy School of Government, Harvard University, 79 JFK Street, Cambridge, MA 02138, USA;3. Charles H. Dyson School of Applied Economics and Management, 407 Warren Hall, Cornell University, Ithaca, NY 14853, USA;4. School of Environment, Beijing Normal University, Beijing 100875 China
Abstract:This paper contributes to the growing literature on land use policies designed to prevent livestock overgrazing. It offers a straightforward factor-income approach to calculating payments for ecosystem services (PES) to livestock producers who reduce or suspend grazing for the purpose of grassland restoration. Our approach requires only cross-sectional farm-level accounting data and is thus feasible where policies have either not yet been applied or specialized data is sparse, as is common in many developing regions. We apply and validate this approach with empirical analysis of sheep and goat herders in the Ulanqab prefecture in Inner Mongolia, China where herders currently receive payments in exchange for reduced grazing intensity on vulnerable land. However, observed stocking rates are still commonly higher than recommended. Our results suggest payments are currently insufficient to offset the financial loss incurred by herders who reduce their grazing intensity, a finding consistent with previous studies. Using an approach we refer to as the factor-income method, we estimate and validate new levels of recommended payments. This demonstrates how future payments could be tailored to meet the financial needs of individual herding communities using basic farm-level data.
Keywords:Inner Mongolia  Payment for ecosystem services  Livestock production  Government subsidy  Grassland policy
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