Hundreds of millions of farmers are wondering whether to plant trees or crops on their farmland next year, as key government subsidies are set to expire.
Starting this year, subsidies to farmers for growing trees on their farmland – subsidies that have been around for almost 15 years – are scheduled to be phased out in the 25 provinces and regions involved. It is unclear whether the government will extend them.
Since they were introduced, natural vegetation has reappeared on 139 million mu (or 9.3 million hectares) of severely desertified land and steep slopes that had been used to grow crops.
All of this was backed by the government’s subsidies. And without them, it seems inevitable that farmers will reclaim a vast amount of land for agricultural use.
The tree-planting campaign took root in 1999. Devastating floods the previous year exposed the hazards of deforestation and desertification driven by expanding farmland. To curb further deterioration of the environment, the government launched its "farmland-to-forest" policy, reversing a trend that saw the country’s area of farmland expand for nearly half a century.
The policy has also changed the lives of 124 million farmers. By the end of 2011, every household that agreed to have farmland transformed into forest has received an average of more than 7,000 yuan in government subsidies. The sum may seem small, but for most farmers the payments were significant.
The money allowed many to look for other ways of making a living by, for example, breeding livestock, growing crops between areas planted with trees and going to work in cities. In general, farmers welcomed the policy.
Things began to change after the turn of the century. From 2000 to 2006, the country’s grain output steadily declined, shifting the focus away from protecting the environment to securing enough food.
An article on the website of the State Forestry Administration reflected the subtle change in attitude. The farmland-to-forest project was initiated under unique historical conditions, it said, but grain output had been declining since 2000.
This meant a renewed emphasis was placed on the amount of farmland the country had. In 2007, the State Council, the country’s cabinet, ordered the project suspended, but, to soften the blow, it kept paying the subsidies to previous recipients.
Now most of those subsidies are set to expire.
A question of returns
More than 90% of the farmland transformed in the project is covered by trees as a defense line against natural disasters, as opposed to cash crops such as fruit trees, said Zhou Hongsheng, director of the forestry administration’s Office of Returning Farmland to Forest.
Under current regulations, farmers are entitled to government subsidies for up to 16 years after they started planting trees on their farmland. But that is not enough time for forest to establish itself, he said.
Zhou warned that, without more subsidies, farmers are bound to cut down trees and resume farming.
There are already signs that the farmland-to-forest policy has fallen out of favour in some areas, as agricultural policies changed and growing crops became more profitable. This weakened the financial incentive to plant trees instead.
In Liaoyuan, a city in the northeastern province of Jilin, for example, a farmer could earn more than 1,000 yuan for growing food on every mu of land after the central government canceled agricultural taxes and increased subsidies for growing grain in 2004.
By contrast, using the same plot of land for growing trees means getting only 156 yuan and 100 kilograms of rice per year from the government, said Li Xing, the city’s forestry bureau chief. This explains why some locals have wiped away the young forest on their farmland to make room for food crops, he said. When there are no subsidies at all for trees, it is not too hard to imagine that most farmers will want to plant crops instead of trees.
There have been concerns that the tree-planting policy undermines the country’s food security because it cuts into the land area available for growing crops, but many disagree with this.
Data from the National Bureau of Statistics shows that the combined grain output of areas covered by the farmland-to-forest policy in 2010 was 52.13 million tonnes greater than it was in 1998. In contrast, six provinces and municipalities outside of the project area yielded 17.95 million tonnes less over the same period.
The project’s impact on crop yields is minimal because many regions that were converted into forest were unsuitable for growing crops in the first place, Shen Guofang, former associate dean of the Chinese Academy of Engineering, told People’s Daily.
Slopes with grades of 25% or more were never ideal for agricultural uses anyway, he said, so planting trees on them instead of growing crops would not change the overall yield much.
Besides, securing food safety does not necessarily mean there should be a lower limit on the area of farmland, said Li Guoxiang, a research fellow with the Institute of Rural Development under the Chinese Academy of Social Sciences. Current law dictates that the country’s total area of farmland must not fall below 120 million hectares – the so-called ‘red line’.
The tree policy would not threaten that red line any time soon, Zhou argued, citing recent research by the Ministry of Land and Resources that shows the figure is around 134 million hectares.
He said planting trees not only would not harm food security but benefits society in other ways. In regions that are prone to earthquakes and mudslides, he said, developing forests is the only way to ensuring the safety of residents.
A new policy
Although on the national level there is no conclusion whether the subsidies will be continued, the State Forestry Administration has started drafting a plan to continue them. Centered on protecting environmentally fragile areas, the plan aims to transform 5.33 million hectares of farmland on slopes of 25 degrees and above into forest by the end of 2020.
Considering the importance of forests to the environment, Zhou said the government should continue subsidising the planting of trees in ecologically fragile areas. Where conditions are met, cash crops can be planted.
Also, he argued that the subsidies should be renewed for at least three decades, with the level of subsidies adjusted for inflation. A mechanism should be established, so people living along the lower reaches of a river can compensate those living upstream for planting trees on their farmland.
Provinces in the lower reaches of the Yellow River, such as Henan, Hebei and Shandong, for example, owe those in upstream areas like Qinghai, Gansu and Ningxia for their wheat harvests.
"Downstream regions have a responsibility and obligation to compensate upstream areas for the sacrifices they made," said Li Can, a research fellow with the forestry administration’s Office of Returning Farmland to Forestry.
This is not only a moral duty but also a legal requirement, he said. According to the Forest Law, downstream areas should subsidise those in upstream regions for the benefits they received as a result of the latter planting trees on their farmland.
In practice, however, this provision is rarely implemented. Only a few cities have arranged their own subsidy pacts.
But there are signs of hope. Some local governments have decided to carry on with the land transformation project even though it means that they need to cover all the subsidies required.
The southwestern province of Yunnan, for example, has launched a plan this year to spend 2.4 billion yuan over the next ten years to turn nearly 670,000 hectares of farmland to forest.
Meanwhile, the city of Yan’an, in the northwestern province of Shaanxi, said it is seeking three billion yuan to finance a project that aims to change nearly 150,000 hectares of sloped farmland into forest. Considering the province’s rich oil, gas and coal resources, the plan stands a decent chance of success. Most other regions that need more forest, however, do not have this financial strength.
Even Yan’an will need the central government’s support, Zhou said, because it is unfair – and more importantly unsustainable – for such a big project to rely only on the initiative of local governments.
This article was previously published on Caixin