Do farmers or governments make better land conservation choices? Evidence from China's Sloping Land Conversion Program

In developing countries with small holdings, targeting payments-for-environmental-services prices to site-specific environmental benefits becomes administratively impractical. Instead, governments fix price and either dictate parcel enrollment or let farmers decide, which might be expected to maximize environmental benefits and minimize opportunity costs, respectively. No paper has actually tested such hypotheses in a developing-country setting. This paper examines China's Sloping Land Conversion Program, with 32 million planting forests, using a unique dataset on 3397 parcels, including farmer-choice and government-choice parcels. Farmers consider similar criteria to local governments but weight land characteristics within the farm (not the landscape) and household characteristics.