Assessment of the Appropriateness of Compensation for Converted Slope Farmland in Yunnan Province, China

Zanxin  Wang; Margaret  Calderon; Myrna  Carandang; OVCRE UPLB

Zanxin Wang School of Development Studies, Yunnan University, Kunming, China
Margaret Calderon Institute of Renewable Natural Resources, College of Forestry and Natural Resources, University of the Philippines Los Banos, College, Laguna, Philippines
Myrna Carandang Institute of Renewable Natural Resources, College of Forestry and Natural Resources, University of the Philippines Los Banos, College, Laguna, Philippines
OVCRE UPLB

Keywords: upland conversion program, input output analysis, compensation rate

Abstract

The study assessed the appropriateness of compensation rates under the Upland Conversion Program (UCP) from the regional economy and farmer perspectives. The compensation rates were calculated according to the criterion that the compensation payments should at least offset the UCP’s negative impacts on the regional gross output and farmers’ income, respectively. A regional inputoutput model was developed to measure the economic impacts of the UCP. The results showed that the existing compensation rate was much higher than the calculated rates from both perspectives, and the calculated compensation rate from the regional economy perspective was higher than from the farmers’ perspective. The results of the study have policy implications for improving the cost-effectiveness of the UCP. It is suggested that the compensation be paid in two parts, one for farmers to offset their income loss, and another for developing substitute industries to partially offset the negative impacts of the UCP on the regional economy.