AbstractCrop rotation and fallow practices are increasingly adopted to mitigate ecological resource pressures and accelerate the development of modern agriculture. These practices have significant implications for environmental protection, soil quality enhancement and the promotion of sustainable, high‐quality agricultural development. Despite their importance, empirical research on the factors influencing participation in crop rotation and fallow remains limited and comparative analyses of different compensation scenarios are scarce. This study, grounded in behavioural economics, utilizes data from the China Rural Revitalization Survey (CRRS) and employs propensity score matching (PSM) and binary logistic regression models to analyse farmers' behaviour regarding both induced and voluntary crop rotation and fallow. The research aims to identify the factors that influence farmers' decisions to engage in these practices. The findings indicate that, under a fixed subsidy standard, the participation rates for crop rotation and fallow were 14.5% and 5.4%, respectively. Among the farmers participating in crop rotation, 43.8% were induced, while 56.2% were voluntary. For fallow practices, 47.9% of the participants were induced and 52.1% were voluntary. In the context of induced crop rotation and fallow, ecological subsidies significantly increased farmers' willingness to participate (p‐value <.001). Conversely, in voluntary contexts, resource endowment had a significantly positive impact on crop rotation behaviour (p‐value <.1), whereas path dependence and policy awareness significantly constrained fallow behaviour (p‐value <.05). The impact of ecological subsidies on farmers' crop rotation and fallow behaviour varied significantly across different ecological regions, with other factors also exhibiting notable heterogeneity. The results of this research offer valuable guidance for the implementation of future crop rotation and fallow programmes. Additionally, they provide insights into the relationship between ecological subsidy systems and farmers' welfare in other underdeveloped areas, suggesting improvements and offering new perspectives for further research.