Agricultural eco-compensation may not necessarily reduce chemical inputs

Abstract

The eco-compensation targeting agricultural non-point source pollution is considered to have a positive role in the farmland environment. However, the effect depends on how the farmers respond and implement the policies. This paper aimed to understand whether the agricultural eco-compensation changes the farmers' planting decision and to what extent it affects the input of chemicals. Taking World Heritage, Hani Terraces in southwest China as an example, this paper established a multi-objective production decision model for farmers to analyze the impact of different compensation standards on farmers' planting decisions and welfare. The results showed that, when the eco-compensation standard is relatively low, farmers tend to adopt the planting structure with higher income to make up for the loss caused by reducing chemicals input. With the increase of eco-compensation standard, the input intensity of chemicals (per unit area) continues to decrease. However, the total amount of chemical inputs increases first and then decreases as the planting structure changes. That means, agricultural eco-compensation may not necessarily reduce chemical input. The results show the importance to pay attention to the behavior changes when eco-compensation is designed and implemented and will have a positive effect on the sustainability of the eco-compensation policy.