An Evaluation of the Effectiveness of Farmland Protection Policy in China

Abstract

Almost two decades have passed since China first enacted legislation to protect farmland from conversion to nonagricultural use. Yet hundreds of thousands of hectares of agricultural land are still developed to urban area each year, raising the question of whether the legislation is effective in preserving farmland from development. This paper examines the effectiveness of the Basic Farmland Protection Regulation in protecting high-quality farmland from urban development in China in the first decade after it came into effect (1995-2005). The theoretical basis for this study is a spatial urban development model with a splitting equation. The empirical evaluation is conducted with georeferenced, longitudinal data on more than 2,000 counties in the country. Results indicate that the Regulation was effective in preserving farmland with high productivity potential only during the period 1995-2000. There is no evidence of effectiveness of the Regulation in protecting lands with good irrigation conditions or lands more suitable for growing major food grains. Farmland development induces the conversion of non-farmland to crop production. This substitution effect declined from 1986 to 2005 and is therefore less likely to be exaggerated by the enforcement of the dynamic balance strategy.

Keywords: Climate change, farmland protection, non-nested hypothesis test, urban development, urban spatial model, Asia, China, East Asia

JEL Classification: Q15, Q28, R14, R52