ORIGINAL RESEARCH article
Front. For. Glob. Change
Sec. People and Forests
Volume 8 - 2025 | doi: 10.3389/ffgc.2025.1613517
Ecological-Economic Trade-offs in Forest Conservation: China's Public Welfare Forest Compensation Policy on Farmers' Production Factor Reallocation and Livelihood Diversification
Provisionally accepted
- 1College of Economics and Management, Fujian Agricultural and Forestry University, Fuzhou, Fujian Province, China
- 2Fujian Forestry Survey and Design Institute, FUZHOU, China
- 3Dongshin University, Naju, Republic of Korea
- 4College of Economics and Management, Huazhong Agricultural University, Wuhan, Hubei Province, China
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As a key environmental governance tool, China's compensation policy for public welfare forests plays a crucial role in promoting ecological protection and implementing Payments for Environmental Services (PES). However, existing research has mostly examined short-term ecological or income effects, often based on small samples or limited timeframes, with little attention to how such policies affect farmers' long-term reallocation of production factors and livelihood strategies across sectors such as forestry, planting, animal husbandry, and non-agricultural employment. To address this gap, this study uses panel data from 12,810 farming households in 18 counties across 9 provinces (2003,(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016)(2017)(2018)(2019) and applies a differences-in-differences (DID) model to evaluate the policy's impact on rural production behavior. Results show that the policy significantly reduces forestry input use, with stronger effects among more active participants, while only boosting non-agricultural labor supply and having no significant impact on planting or animal husbandry; it supports under-forest economic activities but does not offset declines in bamboo, economic, and timber forest inputs, with considerable variation across farmer types; the increase in non-agricultural labor stems mainly from out-migration, with limited effect on local employment; policy effectiveness is heterogeneous and depends on farmers' resource endowments and regional economic conditions. This study contributes to the PES literature by providing long-term, large-scale empirical evidence on the production-side impacts of ecological compensation and offers practical insights for designing more equitable and effective PES policies.
Keywords: compensation policy for public welfare forests, production factors input, Production structure, Policy effect, Differences-in-Differences method
Received: 17 Apr 2025; Accepted: 18 Jul 2025.
Copyright: © 2025 Wei, Huang, Xie and Luo. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Hanxiang Luo, College of Economics and Management, Huazhong Agricultural University, Wuhan, 430070, Hubei Province, China
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