UNINTENDED LAND USE EFFECTS OF AFFORESTATION IN CHINA'S GRAIN FOR GREEN PROGRAM

The aim of China's Grain for Green Program is to reduce soil erosion by subsidizing reforestation of farmland located on steep slopes with low crop productivity. I show theoretically that the incentives created by the program combined with insufficient oversight have led to afforestation of non-sloped highly productive farmland. With a unique land transition dataset, I show that this unintended land use effect has been substantial, amounting to nearly one-fifth of the total amount of cropland converted to forest. This unexpected displacement of highly productive farmland represents a form of slippage/leakage that has not been fully explored in the literature on payment for ecosystem services programs. This form of land displacement is significant in the context of China as well as other countries with limited arable land relative to population size as it can negatively impact national food production targets and self-sufficiency goals.