Balancing crop security and sustainable cropland use: Policy lessons from the Watershed Ecosystem Service Payments in Xin’an River, China

Abstract

This study investigates the impact of Payments for Watershed Ecosystem Services (PWS) on the sustainable utilisation of cropland and crop security in Huangshan City, which is the primary implementation area for the Payments for Xin’an River Watershed Ecosystem Services pilot in China. Using a two-stage analytical framework along with a quasi-natural experiment, the research examines the policy’s effectiveness in Huangshan City. In the initial stage, the directional distance function and global Malmquist-Luenberger index (DDF-GML) model are employed to calculate the agricultural green total factor productivity (AGTFP), representing sustainable management of cultivated land. Concurrently, the study constructs unobservable counterfactual paths using the synthetic control method (SCM) to evaluate impacts on land use practices. The findings show an increase in Huangshan City’s AGTFP from 1.118 in 2010 to 1.823 in 2020. Quantitative assessments indicate that the policy contributed to a 15.3% rise in AGTFP in the PWS cohort compared to the control group. Though initial decreases were detected during three pilot intervals, a consistent upward trajectory in AGTFP was identified, suggesting that PWS encourages crop stability and the sustainable development of arable land. Further support from permutation, regional, and temporal placebo examinations affirm these conclusions. This work implies that PWS may be extended to other agriculturally vulnerable regions to foster a balanced alignment between sustainable growth and the enhancement of crop security The assessment focuses on policy lessons that could inform broader sustainability strategies.