Rural Livelihood and Environmental Sustainability in China [1st ed.] 9789811563485, 9789811563492

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Rural Livelihood and Environmental Sustainability in China Jie Li · Shuzhuo Li · Gretchen C. Daily · Marcus Feldman

Rural Livelihood and Environmental Sustainability in China

Jie Li · Shuzhuo Li · Gretchen C. Daily · Marcus Feldman

Rural Livelihood and Environmental Sustainability in China

Jie Li Xi’an Jiaotong University Xi’an, China

Shuzhuo Li Xi’an Jiaotong University Xi’an, China

Gretchen C. Daily Stanford University Stanford, CA, USA

Marcus Feldman Stanford University Stanford, CA, USA

ISBN 978-981-15-6348-5 ISBN 978-981-15-6349-2  (eBook) https://doi.org/10.1007/978-981-15-6349-2 Jointly published with Social Sciences Academic Press The print edition is not for sale in China Mainland. Customers from China Mainland please order the print book from: Social Sciences Academic Press. ISBN of the China Mainland edition: 978-7-5201-0612-2 Translation from the Chinese language edition: 农户生计与环境可持续发展研究 by Jie Li, Shuzhuo Li and Gretchen C. Daily, © Social Sciences Academic Press 2017. Published by Social Sciences Academic Press. All Rights Reserved. © Social Sciences Academic Press 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publishers nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: Marina Lohrbach_shutterstock.com This Palgrave Macmillan imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Preface I

The Institute for Population and Development Studies at the Xi’an Jiaotong University has been working on the topics of gender discrimination and disadvantaged groups over the years. In-depth research has been carried out on issues pertaining to the protection and development of disadvantaged groups such as children, women, the elderly, landless peasants, migrant workers, and urban workers in need. The Institute is focused on academic exchanges and cooperation both within China and with overseas counterparts. It has successfully completed a number of major research projects and cooperation projects at the national, provincial, and international levels, accumulating a wealth of experience in disadvantaged groups, population and social development strategies, public policy, and other areas of research. The institute has established a wide network for international cooperation, with long-term partnerships with internationally renowned universities and research institutions such as the Morrison Institute for Population and Resource Studies at Stanford University, Duke University, the University of California at Irvine, the University of Southern California, Victoria University of Canada, and the Santa Fe Institute. Mechanisms for exchange visits and collaborative research projects have been put in place. At the same time, the Institute has undertaken a number of studies on disadvantaged groups in China in partnership with, and with funding from, international organizations such as the United Nations Population Fund, the United Nations International Children’s Emergency Fund (UNICEF), Food v

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PREFACE I

and Agriculture Organization of the United Nations, World Health Organization, Plan International, the U.S., Foundation for the National Institutes of Health, the Ford Foundation, and the MacArthur Foundation. The Institute’s international partnerships have enabled it to conduct cross-border dialogue in the relevant academic fields and to expand its international influence. The Institute also prioritizes close cooperation with government departments at all levels around the country, and has formed a research network involving national and local government agencies, thus facilitating the development of its research as well as the dissemination and promotion of its research output. The Institute has, on multiple occasions, participated in studies on major social issues such as China’s disadvantaged groups and population and development strategies at the national and provincial levels. Working closely with the government departments and international agencies concerned, the Institute has been able to conduct extensive research on disadvantaged groups in areas such as family planning and reproductive health, and the environment in which girls live. The results of these studies have also been put into practice, such as through community intervention and communication. Since 1989, the Institute has established six in-community research facilities, such as for the pilot community network on marriage and family advocacy activities in 39 counties across China (1998–2000, the former National Population and Family Planning Commission); the pilot project of improving the living environment for girls in Chaohu (2000–2003, Ford Foundation and the former National Population and Family Planning Commission); and the pilot project of integrating the social gender approach into reproductive health and extension of project results (2003-present, Ford Foundation, United Nations Population Fund, and the former National Population and Family Planning Commission). In particular, the pilot project in Chaohu has had significant impact both within China and abroad and drawn widespread attention to the issue of discrimination against girls. The project has directly facilitated the launch of “Caring for Girls”, a national program. In recent years, the Institute has been engaged in the study of theories, methods, policies, and practices concerning the sustainable development of the population and society, with particular attention to the crossover study of gender and socially disadvantaged communities. The Institute is part of the state’s Project 985 initiative. Current research

PREFACE I  

vii

initiatives cover the following topics related to methodologies, theories, and practical applications. First, studies of the complex system of population and society examine the characteristics and structures of the system, modeling, and major demographic and social problems that emerge in the course of social development. Second, studies of innovative population and social policies look at these policies’ theoretical import and models, the conditions under which and the process by which they are formulated; and how they are evaluated. Third, research on innovative social policies for the protection and development of disadvantaged groups in China during the period of social transition makes use of an interdisciplinary approach to deepen our understanding of the experience of rural migrants, and how to facilitate their social integration. Fourth, a number of studies are designed to help policymakers make better decisions about sustainable population and social development. Specific topics include how to establish an effective policy advisory system, how to build a vast warehouse of databases, models, research output, and methodologies that could be used toward tackling major strategic issues related to sustainable population and social development. China is undergoing a period of rapid changes in population and society, and problems such as gender discrimination, unbalanced social development between town and country, and those concerning disadvantaged groups have become increasingly prominent. The risk of social crises is growing, impacting, and impeding the sustainable development of the population and society. Work done by researchers at the Institute for Population and Development Studies, Xi’an Jiaotong University has contributed toward efforts to address China’s population and social problems, in particular those pertaining to the protection and development of disadvantaged groups. Xi’an, China Xi’an, China Stanford, USA Stanford, USA

Jie Li Shuzhuo Li Gretchen C. Daily Marcus Feldman

Preface II

Poverty and environmental deterioration are two major problems that many developing countries face. China’s population growth and rapid economic development have been accompanied by the irrational use of natural resources, environmental deterioration, and shrinking biodiversity. The rural population and the livelihood activities of farmers in ecologically fragile areas, which lie at the heart of the conflict between the population and economy on the one hand and resources and the environment on the other, are a problem especially worthy of attention. Just how to improve local living standards, protect the environment, and promote the sustainable development of the rural areas have always been a concern of government departments as well as experts and scholars. An effective mechanism dealing with both problems needs to be introduced, so as to promote sustainable livelihoods for farmers in ecologically fragile areas and at the same time protect local environments through policy interventions. This book is built upon theories of sustainable development, micro-­ development economics, an analytic framework for farmers’ sustainable livelihood, and public policy analyses. It looks at rural livelihoods on the microlevel, the activities they engage in to secure the livelihood, the relationship between these activities and the environment, the households’ attitudes toward environmental policies, the fairness of such policies and the Comprehensive Rural Development Programs, and their impact on the livelihood of farmers. ix

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PREFACE II

This book comprises ten chapters and examines an array of subjects. The introduction and overview of the livelihood of farmers are followed by discussions on the livelihood choices of farmers in poverty-stricken mountainous areas, the use of forest resources and multidimensional poverty, the fairness, effectiveness, and efficiency of ecological compensation policies, the impact of such policies on rural livelihoods and welfare. The Comprehensive Rural Development Programs such as resettlement projects aimed at poverty alleviation, efforts at small watershed management and rural livelihoods, and extended studies. Chapter 1 is concerned with the background and framework of the study. Chapter 2 deals with relevant theories and their applications. Chapter 3 is about the livelihood choices and multidimensional poverty of rural residents in poverty-stricken mountainous areas. In Chapter 4, we look at the use of forest resources by farmers in poverty-stricken mountainous areas and their attitudes toward the policies designed to protect the environment. Chapter 5 examines the fairness, impact, and efficiency of the ecological compensation policy and Chapter 6 is an empirical study of how the policy impacts the livelihood of farmers in the western mountainous areas. Chapter 7 is about the impact and fairness of the Grain-for-Green Program of turning marginal farmland into forests and how it affects the wellbeing of rural residents in the western mountainous areas. In Chapters 8 and 9, we examine the relocation of poverty-stricken rural residents and the rural livelihood, and small watershed governance and rural livelihoods. In the final chapter, we further expand on the study of the livelihoods of rural residents and the sustainable development of the environment. The authors of this book are professors Jie Li and Shuzhuo Li of the Xi’an Jiaotong University Institute for Population and Development Studies and professor Gretchen C. Daily and Marcus Feldman of Stanford University. Given the scope of the topic the book explores, there are bound to be errors and omissions. We would welcome comments and suggestions from our readers, experts, and fellow scholars. Xi’an, China

Jie Li

Contents

1

Background and Framework 1 1.1 Background 1 1.1.1 An Overview of Poverty Alleviation Efforts in Rural China 1 1.1.2 The Relationship Between Environmental Protection and Poverty Alleviation and Development Efforts in Rural China 9 1.1.3 Research Motive 13 1.2 Subject Matter and Framework 16 1.2.1 The Subject and General Ideas 16 1.2.2 The Research Methods, Scope, and Framework 17 References 20

2

Rural Livelihood: Theories and Applications 21 2.1 Rural Livelihood and Analytic Frameworks for Sustainable Livelihood 21 2.1.1 The Definitions of “Livelihood” and “Sustainable Livelihood”, and Existing Literature 21 2.1.2 Sustainable Livelihood: Theories, Analytical Frameworks, and Developments 22 2.1.3 Rural Livelihood Strategies and Diversified Livelihoods 33 xi

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CONTENTS

2.2

Impact of the Grain-for-Green Program in Ankang: An Application of the Sustainable Livelihood Framework 35 2.2.1 Indicators for Livelihood Capital, Livelihood Strategies, and Livelihood Outcomes for Households in Rural Western China 35 2.2.2 Livelihood Capital for Enrollees and Non-enrollees in the Grain-for-Green program 37 2.2.3 Livelihood Strategies and Outcomes for Enrollees and Non-enrollees in the Grain-for-Green program 41 2.3 Previous Research on Community-Based Natural Resource Management (CBNRM) 45 2.3.1 Overview 46 2.3.2 CBNRM Issues in China 53 References 55

3

Livelihood Choices and Multi-Dimensional Poverty in Impoverished Mountainous Areas 57 3.1 Rural Livelihoods and the Environment: Places and Process of Survey 57 3.1.1 The Survey Site of Zhouzhi, Sampling Method, and Survey Process 58 3.1.2 The Survey Site of Ankang, Sampling Method, and Survey Process 63 3.1.3 The Sample of Ankang Rural Households 68 3.2 Livelihood Models in the Western Mountainous Areas: The Case of Ankang 74 3.2.1 Theoretical Studies of Livelihood Strategies and Decisions 75 3.2.2 Livelihood Types and Influencing Factors 81 3.3 Measuring Multi-Dimensional Poverty in the Western Mountainous Regions 88 3.3.1 Introduction 88 3.3.2 Multi-Dimensional Poverty Theories and Research Overview 89 3.3.3 Data Source, and Setting the Threshold of Each Dimension of Poverty 92

CONTENTS  

3.3.4

The Measurement and Decomposition of the Multi-Dimensional Poverty Index 3.4 Conclusions and Recommendations References 4

xiii

93 101 103

Classifying Forest Livelihoods in Poor Mountainous Regions Based on Forest Resource Utilization 105 4.1 Types of Forest Livelihood and Determining Factors 106 4.1.1 Introduction 106 4.1.2 Forest Resource Utilization and Household Income 107 4.1.3 Factors that Affect Surveyed Households’ Livelihood Choices Relating to Forestry 116 4.1.4 Summary 121 4.2 Wildcrafting Among Poor Households in Mountainous Areas in Western China: The Case of Zhouzhi County, Xi’an 122 4.2.1 Introduction and Overview 122 4.2.2 Wildcrafting 125 4.2.3 Summary and Suggestions 136 4.3 Attitudes of Farmers in Western Mountainous Areas Toward Forestry and Ecological Protection and Their Protection Behaviors 137 4.3.1 Farmers’ Perceptions and Attitudes Concerning Forestry and Ecological Protection Policy 137 4.3.2 Surveyed Farmers’ Compliance with Local Forestry Policies and Their Perception of the Enforcement of Forestry Management Rules 141 4.3.3 Surveyed Farmers’ Perception of Local Collective Forest Ownership Reform 142 4.3.4 Analysis on Community Governance and Farmers’ Ecological Protection Behavior 143 4.3.5 Summary and Suggestions 150 References 151

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CONTENTS

5

The Equity, Effectiveness, and Efficiency of Ecological Compensation Policies 153 5.1 Ecological Compensation: Definition and Policies in China 154 5.1.1 The Concept and Basic Principles 154 5.1.2 The Economic Theories that Underlie Ecological Compensation Policies 158 5.1.3 Research on Ecological Compensation Within China 161 5.1.4 The Practice of Ecological Compensation in China 163 5.2 Outcomes, Efficiency, and Fairness: What Can Ecological Compensation Projects Achieve? 169 5.2.1 Introduction and Statement of the Problem 169 5.2.2 Ecological Compensation and Equality, Justice, and Fairness 170 5.2.3 The Efficiency of Ecological Compensation Policies and Determining Factors 182 References 185

6

An Empirical Study of the Impact of Ecological Compensation Policy on Rural Households in the Western Mountainous Regions 187 6.1 The Forest Ecological Compensation Policy and the State of Livelihoods in the Mountainous Region of Ankang 187 6.1.1 The Implementation of Forest Ecological Compensation Policies in China 188 6.1.2 Implementation of the Compensation Policy for Ecological Forests in the Mountainous Area of Ankang 193 6.1.3 Implementation of the Natural Forest Protection Project in the Mountainous Area of Ankang 197 6.1.4 Adverse Impact of the Policy on Rural Households 199 6.1.5 Suggestions for Improvements 203

CONTENTS  

The Grain-for-Green Policy, Household Incomes in the Western Mountainous Regions and the Technical Efficiency of Agroforestry Production 6.2.1 The Impact of the Policy on the Household Incomes of Rural Residents Surveyed 6.2.2 An Analysis of the Agricultural and Forest Productivity of Rural Households in Ankang Based on the Stochastic Frontier Production Function 6.3 Willingness of Rural Households in Northern and Southern Shaanxi to Participate in the Grain-for-Green Program in a New Phase and to Sustain the Results of the Program 6.3.1 The Attitudes of Rural Households and Willingness to Stay Enrolled 6.3.2 The Willingness of Households to Stay in the Program Following the Cessation of Subsidies 6.3.3 Conclusions References

xv

6.2

7

207 207

214

229 230 238 242 243

The Impact of the Grain-for-Green Program on Household Welfare in the Western Mountainous Regions and Fairness Analysis 245 7.1 The Fairness of the Grain-for-Green Program as Perceived by Rural Households in the Western Mountainous Regions 245 7.1.1 Statement of Problem 245 7.1.2 The Fairness of the Grain-for-Green Program in Ankang 247 7.1.3 Multiple Correspondence Analyses of Participating Households’ Perceptions of the Fairness of the Program and Its Economic and Ecological Benefits 254 7.2 A Capability Analysis of the Welfare of Participating Households in Zhouzhi 259 7.2.1 Wellbeing, Poverty, and Amartya Sen’s Capability Approach 260

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CONTENTS

7.2.2

Components of wellbeing for Rural Households in Zhouzhi and Method of Measurement 7.2.3 Data Source and Wellbeing Index Scores of Rural Households in the Mountainous Regions of Zhouzhi 7.3 The Impact of Various Conversion Factors on Household Wellbeing 7.4 Conclusions and Suggestions References 8

263 271 279 281 282

Poverty Alleviation Through Population Resettlement and Rural Livelihoods 283 8.1 Resettlement of Poor Residents in Shaanxi and Across China 285 8.1.1 National Overview 285 8.1.2 Shaanxi’s Resettlement Efforts for Disaster Prevention 296 8.2 Funding Measures, Land Use, and the Land Rights of Resettled Residents in Southern Shaanxi 305 8.2.1 The Joint Efforts of Governments at Various Levels and Private Actors and Diverse Funding Measures 306 8.2.2 Fund Management in the Southern Shaanxi Resettlement Program 312 8.2.3 Land for Resettlement Housing and Ways of Land Use 313 8.2.4 Ensure Resettled Residents’ Rights and Interests with Regard to Land and Make Institutional Arrangements in the Case of the Southern Shaanxi Resettlement Program 321 8.3 The Financial Impact of Relocation for Disaster Prevention and Poverty Alleviation on the Rural Households: The Example of Ankang in Southern Shaanxi and Wuqi County in Northern Shaanxi 325 8.3.1 About the Survey Sites and the Survey Process 325 8.3.2 Analysis of the Survey Data 327 8.3.3 Summary and Suggestions 338 Reference 339

CONTENTS  

9

xvii

Research on Small-Watersheds Management and Rural Livelihood 341 9.1 Small-Watershed Management: An Overview and Key Concepts 342 9.1.1 Definition 342 9.1.2 Significance and Research Contents 343 9.1.3 Source of Data 344 9.2 Household Participation in Small-Watershed Management in Ankang 345 9.2.1 Different Aspects of Household Participation 345 9.2.2 Current Management Practices 347 9.3 Small-Watershed Management and Wellbeing of Rural Households in Ankang 359 9.3.1 Changes in Household Wellbeing Before and After Small-Watershed Management 359 9.3.2 Conclusions and Suggestions 368 References 369

10 Future Studies on Rural Livelihoods and Environmental Sustainability 371 10.1 Ecosystem Services and Human Wellbeing 372 10.1.1 The Relationship Between Ecosystem Services and Human Wellbeing 372 10.1.2 Research in China on Ecosystem Services and Human Wellbeing 377 10.1.3 Studies on Ecosystem Services, Human Welling, and Public Policy 381 10.1.4 Areas for Further Research 387 10.2 The Impact of the Forest Ecological Tax on Price Levels in Shaanxi, Based on the Input–Output Table 389 10.2.1 Forestry Taxes in China, and the Design of the Forest Ecological Tax 391 10.2.2 Research Method 394 10.2.3 Making a Summary of Forestry Input and Output in 2007 in Shaanxi Province as Well as Taxation Plans 398 10.2.4 Results and Analysis 399 10.2.5 Conclusions 403

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CONTENTS

10.3 The Impact of a SAM-Based Forest Ecological Tax on Price Levels in Shaanxi 10.3.1 The Principles Underlying the Social Accounting Matrix (SAM) 10.3.2 The 2007 Forestry Social Accounting Matrix (FSAM-2007) for Shaanxi Province, and Data Sources 10.3.3 An Analysis of the Impact of a Forest Ecological Tax on Price Levels in Shaanxi Using the SAM Price Multiplier Model 10.3.4 Conclusions and Suggestions References

405 405 409 412 417 418

Afterword 419 References 421

List

Fig. 1.1 Fig. 2.1 Fig. 2.2 Fig. 2.3 Fig. 2.4 Fig. 2.5 Fig. 3.1 Fig. 3.2 Fig. 3.3 Fig. 4.1

Fig. 6.1

of

Figures

The framework of the Xi’an Jiaotong University’s rural livelihood study 15 The components of livelihood and conversion between these components 24 The Sustainable Rural Livelihoods framework by Scoones (1998) 25 DFID’s Sustainable Livelihoods framework (1999) 27 Capital, livelihood, and poverty 29 Resource access, utilization, and transformation 30 Locations of the Ankang towns and townships sampled 67 The types of nonfarm activities 71 The key indicators for the five major types of capital for rural households within the three livelihood modes 84 Types of forest livelihood for surveyed households (Note The double arrow indicates a comparison between forestry-specialized households and livelihood-diversified households, and the curved arrow means the change from livelihood-diversified to forestry-supplementary households) 109 Changes in the subsidies received for the Grain-for-Green program in the counties surveyed, and in their proportion within the net income of rural residents (Source The Economic Development Research Center of the State Forestry Administration and the Development Planning and Fund Management Department of the State Forestry Administration (2015). 2015 Report on the Social and

xix

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LIST OF FIGURES

Fig. 6.2 Fig. 6.3 Fig. 6.4 Fig. 6.5 Fig. 6.6 Fig. 6.7 Fig. 6.8 Fig. 6.9 Fig. 6.10 Fig. 6.11 Fig. 6.12 Fig. 6.13 Fig. 6.14

Fig. 6.15 Fig. 6.16 Fig. 6.17 Fig. 7.1 Fig. 7.2

Economic Gains Made by Key National Forestry Projects. Beijing: China Forestry Publishing House) 191 The distribution of the ecological forests in the four counties and one district surveyed in Ankang, Shaanxi province 194 The attitudes of participating and nonparticipating households toward the ecological forests policy 195 The attitudes of different types of households toward the ecological forests policy 196 Compensation method preferred by households participating in the Grain-for-Green program 201 Scatter distribution diagram of the technical efficiency of surveyed households 226 Rural residents’ attitudes toward a new round of Grain-for-Green policies 231 Rural residents’ willingness to renew their participation in the Grain-for-Green program 231 The reasons cited by households surveyed for unwillingness to participate in new round of Grain-for-Green 232 Proportion of land plots slated for the Grain-for-Green program in Wuqi and Ankang 233 The various types of land plots slated to be “turned into forest” by Ankang households 233 Slope degree and location of land plots slated to be “turned into forest” in Wuqi and Ankang 234 Land plot quality and irrigation characteristics of land plots slated to be “turned into forest” in Wuqi and Ankang 234 The subsidies actually received by households participating in the Grain-for-Green program in Wuqi (upper image) and Ankang (lower image), as well as their desired compensation levels and current compensation standards 235 Preferred form of compensation for households in Wuqi (top) and Ankang (bottom image) 236 Policy adjustments preferred by the households surveyed 237 The livelihoods of Wuqi County households with and without an expressed interest in the restoration of farming on Grain-for-Green land plots 240 The degree of autonomy enjoyed by households participating in the Grain-for-Green program in terms of tree species selection for their land plots 249 Changes in income from land plots following participation in the Grain-for-Green program 251

LIST OF FIGURES  

Fig. 7.3 Fig. 7.4 Fig. 7.5

Fig. 7.6

Fig. 7.7 Fig. 9.1 Fig. 9.2 Fig. 9.3 Fig. 9.4 Fig. 9.5 Fig. 9.6 Fig. 10.1

Fig. 10.2

Fig. 10.3 Fig. 10.4 Fig. 10.5

Participating households’ assessment of how the Grain-for-Green policy has affected household income Nonparticipating households’ assessment of how the Grain-for-Green policy has affected household income Multiple correspondence analysis of participating Ankang households’ perceptions of the fairness of the Grain-forGreen program, its economic impact and ecological benefit, grouped by changes in income from land plots Multiple correspondence analysis of the perceptions of the fairness of the Grain-for-Green program among participating households in Ankang, Shaanxi, and economic impact and ecological benefit for these households, grouped by proximity of Grain-for-Green land plots to nature reserves Amartya Sen’s capability approach Sources of funding for soil and water conservation Agricultural income of households before and after small-watershed management Nonfarm income of households before and after small-watershed management Monthly expenditure of households before and after small-watershed management Correspondence analysis of income and expenditure of rural households with different family characteristics Correspondence analysis of income and expenditure of rural households that participate in small-watershed management in various ways Ecosystem services and wellbeing (Source Polasky & Segerson [2009]. “Integrating Ecology and Economics in the Study of Ecosystem Services: Some Lessons Learned”. Annual Review of Resource Economics, 1, 2009, pp. 409–434) Ecosystem services, human wellbeing, and drivers of change (Source Millennium Ecosystem Assessment. Ecosystems and Human Welfare: A Framework for Assessment [Washington, DC: Island Press, 2003]) An analytic framework for public policy, ecosystem services and the providers of such services, and the wellbeing of beneficiaries The links between rural livelihoods and ecosystem services, public policy, and wellbeing (Source The research team behind this book) Framework for future research on ecosystem services, human wellbeing, and public policy (Source The research team behind this book)

xxi

252 252

258

258 262 348 360 360 361 366 367

382

383 384 385 388

List

Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 3.7 Table 3.8 Table 3.9 Table 3.10 Table 3.11

of

Tables

Livelihood capital of households that have enrolled in the Grain-for-Green Program and those that have not Householder’s occupation and nonfarm activity pursued by rural households that have enrolled in the Grain-for-Green Program, and those that have not Household income for households that have enrolled in the Grain-for-Green Program, and those that have not Consumption expenditures by rural households that have enrolled in the Grain-for-Green Program and those who have not participated in the initiative Township and village-level survey points, Zhouzhi County Household makeup Units: households, people Household makeup The characteristics of households with migrant workers Rural household participation in resettlement and Grain-for-Green programs, and their labor status Characteristics of migrant workers and nonmigrant workers Characteristics of rural household members who work locally and those who are migrant workers Livelihood types for the rural households sampled Demographic and livelihood characteristics of rural households, by livelihood type Results from the multiple logistic regression model The dimensions, indicators, and indicator thresholds for the measurement of multi-dimensional poverty among rural households

38 42 43 44 62 68 70 71 72 73 74 82 83 86 94 xxiii

xxiv  

LIST OF TABLES

Table 3.12 Table 3.13 Table 3.14 Table 3.15 Table 4.1 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6 Table 4.7 Table 4.8 Table 4.9 Table 4.10 Table 4.11 Table 4.12 Table 4.13 Table 4.14 Table 4.15 Table 4.16 Table 4.17 Table 4.18 Table 5.1 Table 5.2

The poverty head count ratio among rural households by district/county (percent) Poverty head count ratio, degree of deprivation, and the multi-dimensional poverty index The multi-dimensional poverty index of Ankang (M0) and contribution rates of various indicators The multi-dimensional poverty index in Ankang (M0) and the contribution rates of various household types (%) Profile of households classified according to their forestry-related activities and income Household income sources and poverty, by household type Distribution of households’ per capita cash consumption (in percentage and number), by household type Distribution of net household income (in percentage and number), by household type Variables included in the model of households’ forest livelihood choice Amount of medicinal herb collected and its contribution toward household income Demographic characteristics and land possessions of wildcrafting households Breakdown of household income by source Consumption and consumption structure (yuan) Household debt Variables of the regression analysis model on households’ wildcrafting and income from it Parameter estimates of the TOBIT model on households’ wildcrafting and income from it How familiar were the people surveyed with forestry policies (unit: percent) How the surveyed perceived forestry policies (unit: percent) Respondents’ attitudes toward local ecological policies (unit: percent) Comments on occurrence of forest tree and shiitake theft (unit: percent) Comments on compliance with and enforcement of forestry management rules (unit: percent) Logistic regression analysis of forest resource protection behavior of farmers in western mountainous areas Principles of Distributional Equity Basic tenets of representative theories of distributive fairness

96 97 98 100 111 113 114 115 117 120 127 128 129 130 134 135 138 139 140 141 142 148 173 174

LIST OF TABLES  

Table 6.1 Table 6.2 Table 6.3 Table 6.4 Table 6.5 Table 6.6 Table 6.7 Table 6.8 Table 7.1 Table 7.2

Table 7.3

Table 7.4 Table 7.5 Table 8.1 Table 8.2 Table 8.3 Table 8.4

xxv

Table of variables that have an impact on rural household income 208 Multiple linear regression analysis for the impact of the Grain-for-Green policy on the income of rural households in Ankang 210 Quantile regression analysis for the impact of the policy of Grain-for-Green on the income of rural households in Ankang 212 Agricultural and forest crop production inputs and outputs in four counties and one district in Ankang, Shaanxi 215 The results of the SFA model 223 Average output elasticity for various rural household production factors 227 Subsidies for Grain-for-Green program in Wuqi and Ankang 238 Factors influencing the interest in restoring farming on Grain-for-Green land plots among rural households in Wuqi County 240 Indicators for ecological benefit, economic impact, and program fairness for individual households participating in the Grain-for-Green program 255 Average assessment scores from Ankang households participating in the Grain-for-Green program with regard to the ecological benefits, economic impact, and fairness of the program, grouped by reported changes in income 256 Average assessment score for economic impact and perceived fairness level among Ankang households participating in the Grain-for-Green program, grouped by land-plot slope and proximity to nature reserves 257 Evaluation results for the wellbeing of households participating in the Grain-for-Green program in Zhouzhi 274 The wellbeing for rural households in the mountainous regions of Zhouzhi County with various conversion factors 276 The demographics and social characteristics of rural households in Ankang and Wuqi, and their housing status 329 The poverty head count ratio among the resettled and non-relocated households surveyed in Ankang and Wuqi 330 The income sources of the rural households surveyed in Ankang and Wuqi (Unit: RMB) 331 The labor situation among the rural households surveyed in Ankang and Wuqi 332

xxvi  

LIST OF TABLES

Table 9.1 Table 9.2 Table 9.3 Table 9.4 Table 9.5 Table 9.6 Table 9.7 Table 9.8 Table 9.9 Table 10.1 Table 10.2 Table 10.3 Table 10.4 Table 10.5 Table 10.6 Table 10.7

How the surveyed households think of the sources of funding for small-watershed management 349 Types of policy support that rural households wanted to receive in small-watershed management 351 Labor input, contribution and income of rural households participating in small-watershed management 354 Rural households’ perception of small watershed management 356 Views of rural households on the positive impact of small-watershed management 357 Different forms of participation, by source of income 358 Different forms of participation, poor and non-poor households 358 Financial wellbeing of rural households with different family characteristics 364 Financial wellbeing of rural households that participate in small-watershed management in various ways 365 The existing taxes implemented in the forestry industry in China 392 Price changes in various industries in Shaanxi with the three taxation plans when the forest ecological tax rate is 10% Unit: % 400 A simplified version of the social accounting matrix (SAM) 406 The balance of accounts in the SAM 408 The 2007 Forestry Social Accounting Matrix (FSAM-2007) for Shaanxi Province at a glance 411 The SAM price multipliers for various product sectors, institutions, and factors in Shaanxi, 2007 413 Average price multiplier values for selected product sectors in Shaanxi, 2007 416

CHAPTER 1

Background and Framework

Poverty and environmental deterioration are the two major problems that many developing countries face. Population growth and rapid economic development in China have been often accompanied by the irrational use of natural resources, environmental deterioration, and shrinking biodiversity. The conflict between the population and economy on the one hand, and resources and the environment on the other, is becoming increasingly prominent in rural areas in western China. The livelihood activities of the rural population in ecologically fragile areas are at the heart of the conflict, and are thus particularly worthy of attention. Just how to improve the living standards, to protect the local environment, and to promote the sustainable development of rural areas has always been a concern of government departments and experts and scholars. An effective mechanism dealing with both problems needs to be introduced, so as to promote sustainable livelihoods for farmers in ecologically fragile areas and at the same time protect local environments through policy interventions.

1.1  Background 1.1.1   An Overview of Poverty Alleviation Efforts in Rural China Ever since the advent of the policy of reform and opening-up, China has vigorously promoted poverty alleviation and development and achieved world-renowned results. From a nation whose majority population lived © The Author(s) 2021 J. Li et al., Rural Livelihood and Environmental Sustainability in China, https://doi.org/10.1007/978-981-15-6349-2_1

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in poverty to one that is basically lifted out of poverty, China has contributed to the global fight against poverty with its practices in tackling the problems of universal poverty and regional poverty. In this process, two documents are particularly worthy of attention: The 8-7 National Poverty Reduction Program (1994–2000) and The Outline of Poverty Alleviation and Development in China’s Rural Areas (2001–2010), the implementation of which heralds a series of brilliant successes in this area. The size of the rural poor population has been greatly reduced, income levels have been significantly raised, and notable progress has been made in infrastructure and social undertakings. The Minimum Living Allowance System implemented allows poor rural residents to meet their basic needs. i. Poverty in Rural China Since reform and opening up began in 1978, rapid economic growth and government-sponsored poverty alleviation programs have brought remarkable achievements in the area of poverty alleviation. If we are to use the international poverty line of USD1.25 per person per day, over 700 million people in China were lifted out of poverty between 1978 and 2014. If we use China’s standard, the number of rural poor has decreased from 250 million in 1978 to 70.17 million in 2014, and the poverty head count ratio has decreased from 30.7 to 7.2 %.1 This makes China the first country in the world to achieve the Millennium Development goal of halving its poor population. According to official data, there were 14 contiguous areas in the country with a high concentration of poverty, 128,000 poverty-stricken villages, nearly 30 million poverty-stricken households, and 70.17 million poverty-stricken people in 2014.2 Out of the 680 counties in the 14 contiguous areas, 440 are classified as the national priority counties for poverty alleviation and development programs. They, together with another 152 such counties outside the areas, bring the total number of counties for priority actions to 592. These priority counties and other counties in the contiguous areas, adding up to 832, are currently the focus for poverty alleviation and development efforts in China. Of the poor population of 70.17 1 Editorial Committee of the Yearbook of Poverty Alleviation and Development. The Yearbook of Poverty Alleviation and Development. Beijing: Unity Press, 2015. 2 http://politics.people.com.cn/n/2015/1127/c1001-27861506-2.html.

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million, 42, 20, 10, and 8% are in such a situation due to illness, disaster, schooling, and lack of labor, respectively.3 Since 1978, rural China has undergone great changes which are reflected in the size, structure, and geographical distribution of the poor population, as well as the significant decline in the poverty head count ratio. In the past ten years, there have been significant changes in the regional distribution and demographic structure of the rural poor. First, in terms of regional distribution, the population has been further concentrated in the western regions and mountainous regions. The western regions of China, which span over five million square kilometers and account for 56.4% of the country’s land area, include 12 provincial administrative divisions (Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Ningxia, Qinghai, Guangxi, Inner Mongolia, and Xinjiang). While these areas are rich in natural resources and biodiversity resources, they are home to a large portion of China’s poor population. Second, the remaining poor population tends to live in areas with harsh natural environments, remote areas, ethnic minority areas, and among disadvantaged groups that find it difficult to benefit from economic growth. Third, the poor, by definition, have low levels of income and wealth and typically face poor living environments and low-quality human resources. The greater the level of poverty and the longer one remains in poverty, the more pronounced such disadvantages become. Fourth, poor rural households tend to be large in size with a significant proportion of young–old members and a heavy burden of labor. Fifth, illiteracy rates are high among poor rural adults, who lack ­work-related skills and education and thus have fewer employment options. Sixth, the majority of the poor population are from households whose income relies heavily on agriculture and is thus less stable and more likely to change. Seventh, poor households are financially vulnerable to the impact of external factors. Relapse into poverty may easily occur in the event of macroeconomic fluctuations or natural disasters. Eighth, significant year-to-year fluctuations in rural households’ income and expenditure makes it difficult for policymakers to precisely identify the poor population. At the same time, such fluctuations also call for the use of different measures to meet the specific needs of poor rural households.

3 http://politics.people.com.cn/n/2015/1127/c1001-27861506-2.html.

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ii. T  he goals and plans for poverty alleviation efforts in accordance with The Outline for Poverty Alleviation and Development in China’s Rural Areas (2011–2020) in the new era According to The Outline for Poverty Alleviation and Development in China’s Rural Areas (2011–2020), China has a large poor population, and the problem of relative poverty still stands out today. The problem of people lapsing back into poverty has occurred from time to time, and the development of poverty-stricken areas, especially those contiguous areas of extreme poverty, has been comparatively slow. The document sets out the need to raise the poverty line, increase investment, and focus on the contiguous areas of extreme poverty in the fight against poverty. Meeting the basic needs of the poor and reducing poverty is a top priority that must be achieved as soon as possible. We must follow the government’s leadership and the overall development plans, pay more attention to transforming the economic growth model, building the capacity of the poor and promoting equal access to basic public services, and focus on outstanding problems that hinder development. The 2020 goal for poverty alleviation efforts is to help the poor achieve food and clothing security and ensure their compulsory education, basic medical care, and housing needs are met. By that time, net income growth per capita for farmers in poverty-stricken areas will be higher than the national average, their shares of important categories of basic public services will be close to the national average, and the trend of a widening development gap will be reversed.4 The contiguous areas of extreme poverty as listed in the document include the 11 poverty-stricken areas (the Liupan Mountainous Area, the Qinba Mountainous Area, the Wuling Mountainous Area, the Wumeng Mountainous Area, the Yunnan-Guangxi-Guizhou Rock Deserfication Area, the West Yunnan Border Mountainous Area, the Greater Khingan Range South Mountainous Area, the Yanshan-Taihang Mountainous Area, the Luliang Mountainous Area, the Dabie Mountainous Area, and the Luoxiao Mountainous Area) and areas for which special support policies have been put in place (Tibet, Tibetan ethnic areas in the provinces of Sichuan, Yunnan, Gansu, and Qinghai, as well as three regions or prefectures in south Xinjiang). The state will increase its investment

4 http://www.gov.cn/gongbao/content/2011/content_2020905.htm.

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and support, strengthen its guidance and coordination for inter-provincial planning, concentrate its efforts, and implement its poverty alleviation plans by phase. The document has laid down the following principles: promoting development as the major way to fight against poverty, and effectively linking development-oriented poverty alleviation and the rural minimum living allowance system. It encourages the rural poor who are able to work to get out of poverty through their own efforts and requires help to be provided in this process. Continuous efforts will be made to improve the social security system which is designed to guarantee economic assistance for people in need. iii. The concept of “precision-targeted poverty alleviation” The important concept of “precision-targeted poverty alleviation” (jingzhun fupin) emerged in 2013 when President Xi Jinping visited western Hunan. He proposed for the first time the important principle of “seeking the truth from the facts, adapting to local conditions, providing guidance depending on the situation faced, and promoting ­precision-targeted poverty alleviation”. In January 2014, the General Office of the Central Committee of the Communist Party of China issued the guidelines for p ­ recision-targeted poverty alleviation—Opinion on Innovating Mechanisms and Vigorously Promoting Rural Poverty Alleviation and Development (Zhongbanfa 2013 no. 25). The document established for the first time ­precision-targeted poverty alleviation as one of six major mechanisms for poverty alleviation and development, thus aiding the implementation of the idea. During the “Two Sessions” (sessions of the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conferences) in March 2014, President Xi Jinping attended a delegation deliberation meeting and emphasized that it is necessary for China to implement the concept of precision-targeted poverty alleviation and to focus on the specific circumstances of the poor when implementing the policy. In May 2014, the State Council Leading Group of Poverty Alleviation and Development issued The Implementation Plan for the Establishment of Mechanisms for Precision-Targeted Poverty Alleviation (Guokaifaban [2014] no. 30), which further elaborates on the concept. In June 2015, President Xi Jinping emphasized the importance of well-targeted measures for poverty alleviation during a visit to Guizhou.

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In October of the same year, he noted at the 2015 High-Level Forum on Poverty Reduction and Development that China would implement strategies for precision-targeted poverty alleviation, increase its spending in this area, and introduce various preferential policies and measures. China would give play to its institutional advantage, see to it poverty alleviation arrangements are precisely made in six aspects (“Six Precisions”), implement different policies in accordance with specific reasons and types of poverty, and involve the greatest possible number of actors in the process of poverty alleviation. It was clearly stated at the Fifth Plenary Session of the 18th Communist Party of China Central Committee held in October 2015 that by 2020, all rural residents living below the current poverty line will have been out of poverty, and poverty is eliminated in all poor counties and regions. According to The Decision to Win the Fight Against Poverty adopted at the Central Poverty Alleviation and Development Work Conference in December 2015, achieving the rural poverty alleviation goal by 2020 would be the most difficult task in efforts to “build a moderately prosperous society in all respects”. It was further proposed that precision-targeted poverty alleviation needs to be made a basic strategy, and efforts need to be made to coordinate poverty alleviation with economic and social development, targeted assistance with the development efforts geared towards contiguous poor areas, development-oriented poverty alleviation with ecological protection and with social security. These will help guarantee the needs of the rural poor for food, clothing, compulsory education, basic medical care, and housing. The document also laid down the Five-pronged Poverty Alleviation Measures, namely, fostering local industries, relocation, ecological compensation, advancing education, and improving social security. According to China’s poverty threshold, by the end of 2014 there would be 70.17 million rural poor people in the country. To achieve the goal of building a moderately prosperous society by 2020, the poor population would have to be reduced by some 11.7 million people per year or by an average of one million people per month. It is a tall order. In July 2016, President Xi Jinping delivered an important speech at a Yinchuan seminar on poverty alleviation through east–west cooperation, laying out an important plan for the fight against poverty. He noted precision-targeted poverty alleviation was currently at the heart of the thinking on poverty eradication and the guiding principle for poverty alleviation in China. It played a decisive role in the fight against poverty.

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Precision-targeted poverty alleviation is essentially about helping those truly in need, allowing the poverty relief measures to be ­effectively implemented in every village and to truly benefit the poor households. The idea was to eliminate the various factors that lead to poverty by precisely identifying the poverty-stricken families and individuals. This policy has four components—identification, assistance, management, and evaluations. The identification component is what makes the implementation of the policy possible. It refers to the definition of poverty threshold and norm and the effective identification of poverty-stricken households and villages through steps such as application review, public announcements, random inspections, and information entry. Further, there is the establishment of databases on the poor population in order for the further identification of the causes of poverty and the specific areas of aid needed. Assistance is at the heart of the policy. Targeted measures are taken to effectively assist the poverty-stricken households and individuals identified in accordance with the specific causes of poverty involved. Tailored measures at the household level are key to targeted assistance. The focus here is on the above-mentioned Five-pronged Poverty Alleviation Measures. Management helps ensure the desired outcomes are achieved. Here, the focus is on the accurate identification of the poor, precise project arrangement, the precise use of funds, the implementation of well-targeted measures at the household level, the appointment of right officials to be stationed in villages, and the achievement of desired outcomes. Evaluations are an important means of improving the effectiveness of the work. It is about the establishment of mechanisms for people to be removed from or placed back on the poverty list based on evaluations of poverty alleviation efforts at household and village levels, the improvement of evaluation and ­de-registration mechanisms for poverty-stricken counties, the strengthening of quantitative assessments for poverty alleviation work in these counties, and the promotion of a result-oriented approach. The policy of precision-targeted poverty alleviation is an adaptation to the changes in the poverty management situation in China. It allows for a more targeted approach in identifying the poor and developing the relief measures. The management processes are standards, and the gross domestic product (GDP) as a measure of performance becomes less important in evaluation of poverty-stricken counties. The policy represents a major change in China’s poverty alleviation and development field in the new era.

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iv. Previous studies of China’s rural poverty alleviation policies Fan (2011), Liu (2006), and Li and Sicular (2014) and others studied the implementation of The Outline of Poverty Alleviation and Development in China’s Rural Areas (2001–2010) and provided a comprehensive summary of the key poverty alleviation measures between 2001 and 2010, the outcomes achieved, and the issues that remained. These assessment reports divide China’s poverty alleviation policies into the categories of development policies, relief policies, pro-farmer policies, and general macro policies, and look at the structure of the poor rural population in China, the causes of poverty, poverty thresholds, the impact of income growth and income distribution on rural poverty, the distribution of poverty alleviation funds and outcomes achieved. They provide systematic and authoritative assessments of the country’s agricultural policies and their impact on poverty alleviation from 2001 to 2010, the village-level poverty eradication strategy, labor migration, training, and the minimum living allowance system. It is believed that the village-level poverty eradication strategy has produced positive results in improving income and infrastructure in poverty-stricken villages. These developments have been conducive to bridging the development gap between poverty-stricken areas and other areas. However, in the past, there have been some errors in the identification of “poverty-stricken villages”. These reports have also put forth a number of policy recommendations, including, for example, expanding the scope of the policy of guaranteeing help for every poor household and individual, and implementing the policy on the basis of the village-level poverty eradication approach. It is also suggested that pro-farmer policies be adjusted to benefit more members of the poor population and that human capital be improved in impoverished areas. Wang Sangui et al., have done some work on poverty alleviation policies in rural China. For example, Wang (2008) has summarized and evaluated the experience of wide-ranging poverty reduction efforts since the launch of China’s policy of reform and opening-up. In his opinion, the main driving force of poverty reduction has been economic growth, particularly the continued growth of agriculture and the rural economy thanks to a series of reform and opening-up measures, continued human and physical asset accumulation, and sustained technological advances. Targeted pro-poor investments have also contributed to the process. China will need to change its model of economic growth as well as the

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ways of implementing poverty alleviation projects, allowing the poor population to benefit more from them. Wang et al. (2007) have found that with the implementation of the village-level poverty eradication strategy, villages classified as poverty-stricken have seen income grow faster than other villages. However, the primary beneficiaries in the former group of villages are wealthy households. Wang et al. (2007) have also conducted valuable research on the definition of poverty-stricken households, poverty alleviation, and targeted measures taken at the village level. Fang and Zhang (2007) are of the opinion that the development-­ oriented poverty alleviation strategy implemented in rural China has seen its effects increasingly weakened. As the absolute poor in rural areas are becoming more dispersed, a significant number of truly poor people do not have the capacity to benefit from poverty alleviation projects. It is also difficult for the strategy to effectively address the risk of poverty caused by disease and the lack of education, etc. They suggest that apart from income assistance, China’s poverty alleviation policy should give more attention to improving the capacity of the poor to cope with the risks associated with poverty. Fan et al. (2010) have conducted a comprehensive analysis of how public policies improve allocative efficiency through the use of ­first-hand survey data about rural households in remote mountainous areas and ethnic minority areas in western China, and how such improved efficiency has in turn led to the achievement of multiple goals including economic growth and poverty reduction. The research methods used as well as the findings are commendable. 1.1.2   The Relationship Between Environmental Protection and Poverty Alleviation and Development Efforts in Rural China Environmental protection and poverty alleviation and development efforts in rural China are closely interrelated. There is a large number of rural poor in key ecological function areas or areas where development is prohibited. There is a need to comprehensively address issues pertaining to the local population and resource and environmental sustainability. However, the two are in conflict in certain senses. Certain ecological protection measures, such as prohibitions on logging, mineral resource development, and specific land use methods act as limits on income growth for local residents. A study of rural households’ livelihoods needs

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to consider both of them. The government has tried to better align the relationship between the two through policy interventions in the fields of environmental protection, poverty alleviation and development. i. S ignificant geographical overlap between poverty and environmental degradation Key ecological function areas are places prioritized for efforts towards environmental protection in China. Very often, these areas have to tackle with significant poverty issues. As such, there is also a high degree of overlap between poverty alleviation and development efforts and efforts at environmental protection in China. In China, it is highly likely that poverty-stricken areas are also ecologically fragile zones. According to 2005 statistics from the Ministry of Environmental Protection, 95% of the country’s absolute poor live in areas where the environment is extremely fragile. The poorest people in China live in areas with the most serious environmental damages and the lowest levels of natural resilience. Harsh natural environments, the scarcity of natural resources, and poor connections to the outside world all contribute toward poverty. As such, the protection and management of the environment is an important task in poverty-stricken areas.5 In addition, contiguous poor areas are mostly located in key ecological function areas, and the problem of “green poverty” is prominent. Among the various functional areas in poverty-stricken areas, key ecological function areas are the most widely distributed, accounting for 76.52% of the total.6 Efforts to protect the environment in these areas have led to the loss of many development opportunities and the arising of opportunity costs. According to The Outline for Poverty Alleviation and Development in China’s Rural Areas (2011–2020) and the National Functional Area Plan, nine national contiguous poor areas in western China have been

5 Liu, Hui (2016). The Implementation of Precision-Targeted Poverty Alleviation Efforts and Efforts Towards the Coordinated Development of Regional Economies. Journal of the Chinese Academy of Sciences, 3. 6 Zhou, Kan, and Wang, Chuansheng (2016). The Spatial and Temporal Sistribution of China’s Poverty-Stricken Areas, and Differentiated Policies for Poverty Eradication. Journal of the Chinese Academy of Sciences, 1.

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listed as nationally protected ecological function areas, with development activities prohibited. These areas play an important ecological role in the country or the region. While the fragile environment leads to poverty, poverty in turn further exacerbates the vulnerability of the environment. Due to poor natural conditions, local residents have to adopt simple production methods to exploit natural resources that are relatively easy to deal with, such as land, water, forests, and grassland. The use of backward technologies has made for the poor utilization of natural resources. This, together with low levels of trade and commercial activities, make poverty inevitable. At the same time, the low level of productivity has increased the demand for labor, in turn leading to a continued increase in population pressure and overexploitation of natural resources. This has caused ecological degradation and even desertification, further exacerbating damage to ecosystems. Poverty and the ecological fragility are thus caught in a vicious circle. ii. E cologically sound development in the context of poverty alleviation The Outline for Poverty Alleviation and Development in China’s Rural Areas (2011–2020) stated that efforts to implement key environmental initiatives such as turning marginal farmland into forest or grazing land into grassland, water, and soil conservation, protecting natural forests, growing shelter forests and preventing or controlling rocky desertification were set to continue in poverty-stricken areas. The ecological compensation mechanism would be in place, with a focus on pover­ ty-stricken areas and higher levels of compensation for key ecological function areas. Attention would also be paid to the conservation of biodiversity in poverty-stricken areas. The aim of ecological compensation is to provide incentives for environmental protection and regulate the relationship between the beneficiaries and the providers of ­“ecological services” through the internalization of externalities. While ecological compensation in itself is not a poverty alleviation policy, this type of transfer payment has in effect helped reduce rural poverty. As such, in recent years, China has implemented a series of ecological ­compensation projects, such as the Grain-for-Green program, the Forest ecological compensation Funds, and natural forest protection. Some of these projects directly subsidize producers engaged in ecological services, while others work by providing local governments with vertical transfer

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payments. An example of the latter is the central government’s transfer payments to the county where the ecological function area is located. Ecological compensation is one of the components of the Five-pronged Poverty Alleviation Measures. For example, in 2016, a so-called “ecological poverty alleviation channel” was opened up in Shaanxi. According to The Implementation Plan for Targeted Poverty Alleviation Through Forestry issued by the province’s Forestry Department and Poverty Alleviation and Development Office, Shaanxi would begin to provide employment opportunities for the poor in 43 poverty-stricken counties and 13 nationally prioritized counties in the three contiguous areas of Qinbashan, Luliangshan, and Liupanshan in accordance with the principle of shared responsibilities at the county, township, forest station and village levels. A total of 10,000 individuals registered as poor would be employed as forest caretakers. In principle, each county shall use at least 20% of the forest compensation funds raised and managed at the county level for the hiring of individuals from the registered poor population as forest caretakers; and various natural forest protection project implementing entities are also required to give priority to such registered individuals in their hiring of new caretakers. Caretakers are to be hired locally rather than from other villages or towns, in accordance with the principles of “targeted action, voluntary choices, openness, fairness, and justice”. In principle, each caretaker is to be responsible for at least 500 mu of land. The central government disburses subsidy funds to counties based on the standard wage of RMB10,000 per caretaker per annum. Each caretaker will be paid a maximum of RMB10,000 per annum, with the actual wages paid determined by factors such as the forest size, the level of protection needed, the difficulty level of job, and wage for existing caretakers. Such a stipulation allows for the hiring of qualified individuals in the poor population.7 At the same time, Shaanxi Province will gradually turn all farmland with a slope of above 25 degrees into forest in the Qinbashan, Luliangshan, and Liupanshan areas as well as in the two national-level contiguous poor areas of Baiyushan and Tushishan along the Yellow River. Priority would be given to registered poor households in these areas, and by 2020 each of these households will have two mu of farmland transformed into forest. At the same time, the Forestry Department is to guide these

7 http://www.sxdaily.com.cn/n/2016/1020/c145-6020154.html.

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households in the right ways of forest management and support them in planting forests where oil plants, high-quality and efficient economic plants and featured local plants, such as apples, walnuts, Sichuan peppercorn, tea, chestnuts, and peony (for oil-production purposes), are grown. The goal is for each individual registered as poor to have an average of at least 1 mu of “farmland-turned-forest” with standout financial benefits by the year 2020.8 In this way, ecological compensation projects help reduce poverty. In summary, protection of the natural environment and poverty alleviation in rural areas are important issues that China needs to tackle in the twenty-first century, and the two are intrinsically linked. What is necessary is the integration of environmental protection with poverty alleviation efforts in rural areas. With the livelihood of farmers as the starting point, analysis and research can improve participation rates in ecological projects aimed at restoring the environment as well as increase gains for poor populations in the process. Analysis and research can also lead to innovations in public policy, thus creating a positive impact on rural livelihoods. 1.1.3   Research Motive The Institute for Population and Development Studies at Xi’an Jiaotong University has participated in the Natural Capital project (The Natural Capital: Putting Ecosystem Services to Work for Conservation) since 2006. The project, launched by the Stanford Woods Institute for the Environment, The Nature Conservancy (TNC), and the World Wide Fund for Nature (WWF), seeks to more easily integrate natural capital into decision-making systems by measuring the economic and other values of nature and developing the needed tools and methods, and to showcase the power of these tools in key areas of global biodiversity conservation, combining economic factors with conservation. The goal of the project is to give governments, businesses, rural residents, and other stakeholders a greater understanding of the value of ecosystem services, to incorporate the value of the environment into the decision-making processes and practical actions of stakeholders (such ­ as the government and rural residents), and to promote the rational

8 http://www.berry0123.cn/ac75roc620160605c6n453062447.html.

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and effective use of local ecological resources by rural residents in their household and livelihood activities. The communities in which rural residents live, and the related organizations, have also played an active role in this process. The main research partners of the Natural Capital project in China include the Chinese Academy of Sciences Research Center for Eco-Environmental Sciences and the Xi’an Jiaotong University Institute for Population and Development Studies. The research team at Xi’an Jiaotong University has primarily focused its energies on rural households’ livelihood choices on the microlevel and sustainable livelihoods. In the past, researchers and international organizations have conducted extensive research on sustainable livelihoods and livelihood strategies, and have also proposed some research and analytic frameworks. For example, there is Scoones’s (1998) Sustainable Rural Livelihoods framework, the U.K. Department for International Development’s (1998) Sustainable Livelihoods framework, Bebbington’s (1999) Capital and Capabilities framework, and Ellis’s (2000) Livelihood Diversity framework. Based on these preceding frameworks, the Xi’an Jiaotong University research team has put forward a broad framework for the study of rural livelihoods (see Fig. 1.1). Based on the demographic characteristics of rural households and the five kinds of capital (natural capital, human capital, social capital, physical capital, and financial capital), the framework examines how these households make use of the different mix of capital they own and choose to conduct various activities for livelihood, which produce such outcomes as the use of natural resources and changes in income levels. The availability and use of various types of capital are affected by natural ecological and social factors, institutions and policies, and external trends or impacts. More details on the said framework are as follows: 1. The internal circular flow as shown in the diagram begins from the demographic characteristics of local rural households, for instance, number of people and structure, reproduction behavior, and gender preferences, which have an important impact on the utilization of livelihood assets as well as the choice of livelihood strategies. These factors also act on livelihood outcomes, including the use of local natural resources and changes in the environment. As such, the framework foregrounds demographic dynamics and closely combines demographic characteristics, household decision-making, and livelihood activity choices.

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Fig. 1.1  The framework of the Xi’an Jiaotong University’s rural livelihood study

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2. The external circular flow shows that the choice of livelihood strategies is influenced by the community, institutions and policies, the natural environment, and the social environment. 3. The feedback, dynamics, and interactions between both the internal and external flows. Interaction occurs between rural households’ livelihood activities and external factors. Such activities as production, reproduction, and consumption will have an impact on the local environment. However, changes in the external factors, such as in the environment, in the government’s environmental protection policies, or in rural development and poverty alleviation efforts will also affect rural households’ assets and activities for livelihood. In short, the research team takes the demographic characteristics of rural households on the microlevel as its starting point to highlight the dynamics of the rural population (such as migration), residents’ susceptibility to poverty, and the impact of policies on the livelihood of farmers with the purpose of promoting the rational and effective use of local ecological resources and the conservation of biodiversity by rural households in ecologically fragile areas, thus promoting the sustainable development of the population, of local resources, and of the environment in the impoverished mountainous areas of western China.

1.2  Subject Matter and Framework 1.2.1   The Subject and General Ideas While they are otherwise a heterogeneous group, all the rural poor by definition suffer from poverty. They often live in areas that are ecologically fragile, and where issues of the sustainable development of the population, resources, and the environment are acute. The government, which needs to take into account the dual goals of poverty alleviation in rural areas and ecological protection, has also implemented a number of environmental protection policies as well as poverty alleviation and development intervention projects in these areas. These two goals are also important tasks for China as it seeks to build an ecological civilization and a moderately prosperous society, promote the harmonious development of society, and solve the issue of regional rural poverty by the year 2020.

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This book is built upon theories of sustainable development, micro-development economics, and an analytic framework for farmers’ sustainable livelihood. It looks at rural livelihoods on the microlevel, the activities they engage into secure the livelihood, the relationship between these activities and the environment, the households’ attitudes toward and perceptions of environmental policies, and the impact of these policies on the livelihood of farmers. 1.2.2   The Research Methods, Scope, and Framework Informed by theoretical research such as those on rural livelihoods and analytic frameworks for sustainable livelihoods, the authors of this book have conducted questionnaire surveys in poverty-stricken areas of western China with dense forest and which serve a strong role as providers of ecosystem services. In this way, an empirical research is conducted on rural livelihoods and environmental protection. Most of the empirical data generated for this study has come from a Livelihoods and the Environment survey of rural households conducted in Zhou’an County in Xi’an in 2008 and Ankang in Shaanxi in November 2011. See the first part of Chapter 3 for a description of Zhouzhi County in Xi’an and Ankang, Shaanxi survey sites, as well as of the sampling methods used, the survey process, and the questionnaire collection process. Some of the data in Chapter 7 comes from an October–November 2015 survey conducted in Ankang, Shaanxi; and Wuqi County, Yan’an. The data used for the small-watershed management and rural livelihoods analysis in Chapter 8 comes from the Small-Watershed Management and Rural livelihoods survey conducted in Ankang by a Xi’an Jiaotong University Institute of Population and Development Studies research team in March 2013. The aforementioned rural household surveys and group visits as well as individual visits to various respondents has generated a vast amount of first-hand data, allowing for a better understanding of the situation of poverty alleviation and development in the ecologically fragile areas of rural western China, the relationship between rural households and the environment, and their attitudes and responses to forestry management systems and ecological protection policies. This further allows the research team to study rural livelihoods and sustainable environmental development from various aspects and to put forward suggestions and recommendations for action.

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This book revolves around the following three aspects: – The rural livelihood living in poverty-stricken western mountainous areas, especially their livelihood choices and decision-making processes. We have analyzed livelihood choices and the factors influencing them, the productivity levels of agroforestry operations, and multi-dimensional poverty, etc., through various quantities and combinations of five types of livelihood capital, and the availability, transformation and combination of livelihood asset. – The relationship between rural households’ livelihood activities and the natural environment, and their attitudes toward, and perceptions of, policies designed to protect the environment. The utilization of natural resources is analyzed through the study of various types of livelihood strategies for rural households, such as Forest Livelihood activities; simpler, agriculture-centered livelihood activities; or more diverse livelihood strategies. Since China has implemented a number of forestry and ecological protection policies in its mountainous regions, such as the Grain-for-Green policy, the planting of ecological forests, logging bans, and forest protection projects, we look at how rural households see these policies. – The fairness, effectiveness and efficiency of ecological compensation policies. We examine the role and impact of ecological protection policies on farmers’ livelihood strategies and their sustainability, such as Grain-for-Green, small-watershed management, and Comprehensive Rural Development Programs. There are ten chapters in this book. Below is a brief description of the focus of each chapter. This chapter is about the background of the study and the framework. In Chapter 2, we look at the theoretical foundations of this book, such as the various analytic frameworks for rural sustainable livelihoods and the applications of such frameworks, and community-centered studies on natural resource management. Chapter 3 is about the livelihood choices of rural households living in impoverished mountainous areas and the measuring of ­multi-dimensional poverty. Here, we first describe the two rural household surveys that the empirical research part of this book has mainly relied on, as well as the background of the survey sites, the survey process, and the collection of questionnaires. Then, we empirically analyze

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the livelihood choices and factors influencing the choices among rural households in Ankang, Shaanxi Province. Subsequently, based on the prescribed methods, we measure multi-dimensional poverty for rural households in Ankang. Chapter 4 examines the attitudes of rural households living in impoverished mountainous areas towards the use of forest resources and policies designed to protect the environment. Here, we study the relationship between the households and the environment in impoverished mountainous areas. On one hand, we focus on the households’ use of forest resources, such as through herb foraging, and their dependence on the forest for their livelihoods; on the other hand, we also look at the households’ perceptions, such as their attitudes toward ecological and forestry-related policies. Chapter 5 is a theoretical study of ecological compensation, specifically, the fairness, effectiveness, and efficiency of ecological compensation policies. The Grain-for-Green policy of turning marginal land to forest is the world’s largest ecological compensation program in terms of the size of the population involved, the land area covered, and the amount of funds involved. In particular, China has implemented a new round of projects towards this end in 2014, thus continuing to change a greater land area to forest. Said projects are not merely designed with environmental objectives, such as water and land conservation. The government also hopes that these projects can promote the structural change of the economy in rural areas and lead to an increase in rural incomes in both direct and indirect ways. Chapter 6 of this book is concerned with the empirical study of the impact of ecological compensation policies on the livelihoods of residents in the western mountainous areas through the use of data collected by the research team. In Chapter 7, the book analyzes the impact of the Grain-for-Green program on the wellbeing of rural households, and the fairness of the program. Resettlement for the purposes of poverty alleviation is one part of the Five-pronged Poverty Alleviation Measures. In Chapter 8, we look at such relocation of rural households and their livelihoods, including at the origin and general situation of China’s poverty alleviation and relocation initiative and at the general situation and progress of the southern Shaanxi relocation project aimed at poverty alleviation and moving residents away from disaster-prone areas. Specifically, the following issues are examined: fundraising for the southern Shaanxi

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relocation project; land use by, and the land rights of, relocated households; and the impact of the project on the economic status of rural households. Small-watershed management is one type of Comprehensive Rural Development Programs that have been implemented in rural western China. In Chapter 9, we examine the management of small watersheds and the livelihoods of rural households, analyze the circumstances of Ankang farmers participating in small-watershed management, and study the relationship between small-watershed management and rural households’ wellbeing. The final chapter of this book, Chapter 10, further expands on the study of rural households’ livelihoods and environmental sustainability which is also a key research topic within the areas of ecosystem services and human wellbeing. Here, we first look at and propose some frameworks for the study of ecosystem services and human wellbeing as well as research issues worthy of attention. These indicate that rural livelihoods are a core topic in research on ecosystem services and human wellbeing. Then, we try to extend our research into the realm of public policy analysis and assessment through an attempt to adopt macroeconomic methods (primarily the input–output model and the social accounting matrix approach) with Shaanxi Province used as an example. Using the input–output multiplier and the social accounting matrix multiplier, we simulate and analyze the impact of ecological taxation, such as the forest ecological benefit tax, on local industry and price levels in Shaanxi Province to expand our research into the realm of public policy analysis and evaluation.

References Fan, S. G., Xing, L., & Chen, Z. G. (2010). Public Policy and Rural Poverty in Western China. Beijing: Science Press. Fang, L. M., & Zhang, X. L. (2007). Policies and Effects of Poverty Alleviation in Rural China: An Investigation Based on the Theory of Capability Poverty. Journal of Finance and Economics, 12. Wang, S. G., Wang, H., & Wang, P. P. (2007). Identification of Poor Families in Rural China. Journal of Agrotechnical Economics, 1.

CHAPTER 2

Rural Livelihood: Theories and Applications

2.1  Rural Livelihood and Analytic Frameworks for Sustainable Livelihood 2.1.1   The Definitions of “Livelihood” and “Sustainable Livelihood”, and Existing Literature The term “shengji”, the Chinese term for “livelihood”, first appeared in the 1978 edition of the Modern Chinese Dictionary (Xiandai Hanyu Cidian). Two definitions for the term were given: (1) a means of sustaining life; and (2) a term used to describe living itself. Here, “living” encompasses elements such as clothing, food, housing, and travel/transport. In the English language, the term “livelihood” is also defined as the means and way of sustaining life. Many scholars who study poverty and rural development believe that the concept of “livelihood” is rich in meaning, and has richer connotations and a broader scope than “work”, “income”, and “occupation”. The concept of “livelihood” can better express the complexities of the issue of survival for the poor, and help us better understand the strategies adopted by the poor to secure their livelihood. “Sustainable livelihood” is a concept that emerged in the late 1980s, first through a report from the World Commission on Environment and Development (WCED). In 1992, the United Nations Conference on Environment and Development incorporated the concept into its action agenda, specifying it as the main goal of poverty eradication efforts. The © The Author(s) 2021 J. Li et al., Rural Livelihood and Environmental Sustainability in China, https://doi.org/10.1007/978-981-15-6349-2_2

21

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importance of sustainable livelihoods for poverty reduction policies and development plans was again emphasized at the 1995 World Summit for Social Development in Copenhagen and at the 4th World Conference on Women in Beijing. In short, the concept of “livelihood” provides new perspectives on rural economic development and the sustainable use of natural resources, and has attracted widespread attention from researchers, nongovernmental organizations, and government agencies. Since the 1980s, foreign researchers and international organizations have conducted extensive research on rural livelihoods and sustainable livelihoods. The classic definitions of “livelihood” are as follows: Scoones (1998) is of the opinion that livelihoods consist of the capabilities, assets (including material and social resources) and activities required for a means of living. Ellis (2000), a world-renowned researcher on rural poverty alleviation and development, emphasizes the study of the diverse elements that make up rural livelihoods. Ellis believes a livelihood comprises “the assets (natural, physical, human, financial, and social capital), the activities, and the access to these (mediated by institutions and social relations) that together determine the living gained by the individual or household”. Chamber and Conway (1992) have proposed a widely adopted definition of livelihood: “A livelihood comprises the capabilities, assets (stores, resources, claims and access) and activities required for a means of living; a livelihood is sustainable which can cope with and recover from stress and shocks, maintain or enhance its capabilities and assets, and provide sustainable livelihood opportunities for the next generation; and which contributes net benefits to other livelihoods at the local and global levels and in the short and long-term”. Sen (1987) regards capabilities as people’s ability to survive and engage in activity. More specifically, people have natural and social attributes, and should have access to adequate nutrition and enjoy good health. They should also have the right to choose, and engage in, certain activities. 2.1.2   Sustainable Livelihood: Theories, Analytical Frameworks, and Developments In recent years, certain foreign organizations and researchers have developed a number of analytical frameworks focused on livelihood based on the concepts of livelihood and sustainable livelihoods and the Capability

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Approach formulated by the Nobel Prize winner Amartya Sen. Example include the Sustainable Livelihoods framework proposed by Scoones (1998), the Bebbington framework (1999) that focuses on capital and capacity, and which comprehensively analyzes rural livelihoods, vulnerability, and poverty; and the Livelihood Diversity framework proposed by Ellis in 2000. In addition, the US NGO CARE has also proposed livelihood approaches based on basic needs and rights. These analytic frameworks are centered on the assets and activities of the individual, and allow us to understand poverty from multiple perspectives. Further, they also provide integrated solutions, and are favored by the World Bank and many NGOs. Thus, based on the concept of livelihood, the sustainable livelihood framework is both an academic framework that can be used to study poverty and environmental issues and a tool that can be used to plan and guide financial assistance and intervention projects. From the research perspective, the development of rural livelihoods framework is mainly directed at the operation of a part of a broader livelihoods framework, such as toward livelihood assets or livelihood strategies. i. Chambers and Conway’s definition and analytical framework The most widely adopted definition for livelihoods was proposed by Chambers and Conway in 1992. “The livelihood is the way for one to make a living, which is based on capabilities, assets (including reserves, resources, claims and entitlements), and activities”. In accordance with Sen’s theories, “capability” is seen as a function of human beings for survival and engagement in activity. Apart from encompassing natural attributes such as nutrition and health, the term should also include one’s right to choose and to engage in certain activities. Chambers and Conway (1992) have summarized the several expressions of livelihood capabilities as follows: the ability of individuals to deal with pressure and shocks and the ability to uncover and exploit opportunities in a given living environment. “Sustainable livelihoods” can be divided into two aspects: environmental sustainability livelihoods and social sustainability. Environmental sustainability refers to the ability to maintain and enhance the local and global capital on one survives and to generate net income for livelihoods; social sustainability means that one is able to deal with pressure and shocks and to recover from them to support future generations. Based

24  J. LI ET AL.

on the definition of these basic concepts, Chambers and Conway have further broken down the composition of household livelihoods into: people, activities, capital, and output (see Fig. 2.1). Tangible capital comprises elements such as “Stores” (food and items of value, such as jewelry, cash savings, etc.) and “Resources” (e.g., land, water, trees, and livestock). Intangible capital includes “Claims”, including one’s needs and demands for material, spiritual, and practical support and availability. Claims often occur in the context of pressure and shocks. “Access” refers to the real opportunities to utilize resources, stores, services or to access information, goods, technology, employment, food, income, etc. Individuals build and design a means of livelihood based on such tangible and intangible capital. Rural livelihoods are often made up of several types of activity. When capital accrual exceeds expenditure, investment occurs. Livelihood capabilities can be enhanced through investment. ii. Scoones’s Sustainable Rural Livelihoods framework The Sustainable Rural Livelihoods framework by Scoones (1998) shows that, in different contexts, rural households and other decision-making

Fig. 2.1  The components of livelihood and conversion between these components

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25

bodies achieve sustainable livelihoods by combining livelihood resources with different livelihood strategies (as shown in Fig. 2.2). The heart of the framework lies in the analysis of the formal and informal organizational and institutional factors that impact livelihood outcomes. It is assumed within the framework rural households achieve varying livelihood outcomes in different contexts, through the achievement of varying livelihood strategies (more intensive agricultural activities and expansion, livelihood diversification, and migration) made possible by the combination of specific policy, politics, historical, agroecology, and socio-economic conditions with livelihood resources (various forms of capital). The ability of rural households to achieve different livelihood activities depends on the tangible and intangible capital that individuals possess. In order to be able to conduct an empirical investigation, he borrowed certain terms from the discipline of economics and conducted

Fig. 2.2  The Sustainable Rural Livelihoods framework by Scoones (1998)

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a reclassification of capital into four types: natural capital, financial capital, human capital, and social capital. Scoones (1998) provides a brief explanation of the relationships between these various types of capital, such as order, transformation, substitution, integration, availability, and trends. The research methods include traditional survey methods, the appropriate qualitative methods, and participatory research methods. The framework emphasizes five interacting factors: background, resources, institutions, strategies, and outcomes. It is believed that a sustainable livelihood means that rural households are “capable of coping with pressure and shocks and recovering from them, while maintaining and improving their capacity and capital without an undue consumption of natural resources”. iii. DFID’s Sustainable Livelihoods framework (1999) Among the many livelihood analytical frameworks that have been proposed, the U.K. Department for International Development (DFID)’s Sustainable Livelihoods framework is the most widely used and influential. The DFID has, based on Scoones’s (1998) Sustainable Rural Livelihoods framework and an understanding of the nature poverty according to Sen, Chambers, and Conway (1992), further developed the Sustainable Livelihoods framework. The framework has since become a planning tool for many international organizations and non-government agencies as they seek to provide financial support and intervention guidance to developing countries (see Fig. 2.3). According to the framework, rural households combine their various types of livelihood capital and engage in different production activities to pursue a certain livelihood strategy; the accessibility, availability, and utilization of various assets of various types are constrained by social factors, external trends, and shock factors. First of all, the DIFD framework subdivides Scoones’s concept of financial capital into financial capital and physical capital, making for a total of five types of capital—natural, financial, physical, human, and social capital. In the past, researchers generally believed that the capital situation of a household or individual is the basis for understanding the choices available, the livelihood strategies adopted, and the environmental risks for the households or individual. It is also an entry point for the design of rural poverty alleviation and development projects and policy interventions.

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Fig. 2.3  DFID’s Sustainable Livelihoods framework (1999)

Here, “natural capital” refers to the storage of natural resources (such as land and water) and environmental services (such as the water cycle) from which resources and services that are beneficial to livelihoods can be formed. “Natural capital” comprises land, water, and biological resources that people can use to sustain their livelihoods, including renewable and nonrenewable resources; “physical capital” includes capital that is created through human production processes, such as homes, irrigation systems, production tools, and machinery; “financial capital” usually refers to the cash used to purchase consumer goods and means of production, as well as the loans or personal loans that are available; “human capital” encompasses the knowledge, skills, and labor capacity and health conditions that individuals possess that allow them to make a living (Li Bin et al. 2004); and “social capital” refers to the social resources that people use to pursue their livelihood goals, such as social networks and social organizations (religious organizations, relatives, families, etc.), and can include vertical social connections (relationships with superiors or leaders) and horizontal social connections (such as with people with common interests). Second, the livelihood outcome is the achievement or result of a livelihood strategy or goal. The livelihood outcomes expected by poor

28  J. LI ET AL.

rural households may include more income; improved living conditions; reduced livelihood vulnerability; greater food security; and the more sustainable use of natural resources. Further, an important component of the Sustainable Livelihood framework is the social, economic, and political context that affects livelihoods. Scoones (1998) classifies context into two categories: the first comprises conditions and trends, including historical, political, and economic trends, as well as climate, population, and social differences; the other comprises institutions and organizations. Ellis (2000) also classifies context into two categories: social relations, institutions, and ­organizations; and trends and shock factors. Carney defines the vulnerability context and transformation process (1998). Thus, we can see the components of “context” are very complex and involve many social science research fields, thus presenting a challenge to both researchers and practitioners while bringing new research problems to different disciplines. In this case, the capital status of individuals and households will determine the choices and adjustments made to the livelihood strategies of rural households and individuals. Livelihood sustainability as summarized by the DFID depends on the following aspects: that in the face of external natural disasters and socio-economic turmoil, livelihoods are recoverable; that livelihoods do not rely on external support (if there is dependence, the support it relies on should also be economically and mechanically sustainable); that the individual or household is able to maintain the long-term viability of natural resources; and that in the end, the livelihood in question does not undermine the livelihoods of others, and nor does it harm the livelihood choices of others. In summary, the Sustainable Livelihood framework can help people understand the complexities of livelihoods and the main factors that affect poverty by integrating a new understanding of poverty into an analytical tool. It is a way to sort and analyzing the complex factors, particularly poverty-linked factors, that are related to the rural livelihood. In the course of specific applications, the framework has to be modified or adapted to suit the local environment and conditions and used in line with local priorities and needs. The Sustainable Livelihood framework reveals a conceptual model for understanding poverty and shows the core elements of livelihoods and the relationships between them. It can be seen from the framework diagram that in a risk environment caused by factors such as institutions

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29

and policies, under the influence of capital and policies and systems, the nature and status of capital determine the type of livelihood strategy adopted, in turn leading to certain livelihood outcomes. These livelihood outcomes in turn have an impact on capital, affecting the nature and condition of capital. The Sustainable Livelihood framework plays a guiding role in the design, implementation and testing and assessment of rural poverty alleviation development projects: it clearly and concisely demonstrates the core components of the project; it enables different parties to know how the project works and what the project goals are, helping to ensure that inputs, activities, outputs, and purposes are not confused; and it helps in the identification of the key factors for project success. iv. The Bebbington framework Bebbington (1999) has emphasized the role of capital and capabilities in the analysis of livelihoods, believing that capital provides rural households with the ability to achieve outcomes, to meaningfully participate, and to change the world. He proposed a framework for analyzing rural vulnerability, rural livelihoods, and poverty centered on capital and capabilities (see Figs. 2.4 and 2.5). Within the framework, capital is the vehicle of instrumental activities, interpretive activities, and liberating

Fig. 2.4  Capital, livelihood, and poverty

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Fig. 2.5  Resource access, utilization, and transformation

activities. These three types of activities correspond to making a living, making life meaningful, and challenging existing livelihood structures. With a focus on rural development in Latin America, this framework considers the analysis of farmers’ livelihood needs based on: (1) the need among the people for access to five kinds of capital, (2) the ways in which rural households combine and convert various kinds of capital, and (3) rural residents grow their capital by improving their lives and changing the key rules and relationships that govern the way in which the residents’ resources are controlled, distributed, and transformed. This framework places a strong emphasis on the role of social capital in the accessibility of other resources for rural households. What is emphasized is the recognition that the process of policymaking and institutional decision-making determines rural households’ ownership and use of capital and their choice of livelihood strategies. The aim of the Sustainable Livelihoods approach is to help people understand the factors behind the impact of people’s choices on livelihood strategies in order to highlight those positive aspects that mitigate constraints and negative factors, rather than to simply recommend a particular livelihood strategy because of the existence of certain resources and opportunities such as woodland, cultivated land, or employment opportunities. The above conceptual models are extensions of the livelihood asset component of the conceptual model of sustainable livelihoods proposed by Scoones (1998). Scoones (1998) and Ellis (2000) argue that the

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following aspects should be considered for the adoption of a livelihood framework that is centered on assets: first, order or sequence. What is the beginning of a successful livelihood strategy? Which assets are more relevant to those assets that would be acquired subsequently? Second, substitution. Can one form of capital be substituted for another? Do these forms of capital have to be combined for a particular livelihood strategy? Third, aggregation. Does the right to acquire an asset lead to the right to acquire another asset? Is there a special portfolio of assets associated with a particular livelihood strategy? Fourth, availability. What are the factors that lead to different groups getting particular assets? Fifth: the transactional. What are the transaction assets involved over the course of pursuing a particular combination of actions? What does the exchange of assets mean for the future sustainability of the adopted livelihood strategy? Sixth: trends. How are assets exhausted and how do they accumulate, and who does the exhaustion and accumulation? What is trends in asset availability like? What are the new assets that are being created over time? These issues are addressed and developed by the capital and capabilities framework. v. Other developments Nonprofit organizations such as CARE, Oxfam, the Africa Wildlife Foundation, as well as a number of international organizations such as the DFID and UNDP, have improved the Sustainable Livelihood framework for their specific requirements. Dorward et al. (2001) have proposed the Asset Function Framework, which combines the functions and characteristics of livelihood assets to consider their impact on livelihood strategies. The framework underlines the role of assets in improving productivity and reducing the vulnerability of rural livelihoods, and takes into account the different assets owned by the poor, thus facilitating policy analysis, capacity building, and technological interventions for the opening up of more livelihood opportunities for the poor. They have divided livelihood assets according to production and reproduction, and believe that production or income activities use productive assets and generate resources for consumption and reproduction in society. Some scholars have also strengthened some of the framework’s content based on their research needs. Based on the Sustainable Livelihood framework proposed by Scones, Ellis (2000) has proposed the

32  J. LI ET AL.

Livelihood Diversity framework. Ellis (2000) concludes following a summary of research related to poverty alleviation, vulnerability, sustainability, and livelihood strategies that rural households often adopt diversified livelihood strategies in order to cope with various risks existing in the outside world, such as ex ante risks and ex post risks. Livelihood diversification has been defined as the process of the diversification of activity portfolios and social support capabilities by rural households in order to survive or to improve their lives. Ellis believes that livelihood diversification is not simply a diversification of income; it also refers to the social behavior of rural households engaged in diversification. Soussan et al. (1991) funded by the DFID, have proposed a conceptual model of livelihoods in a study on the dynamics of livelihoods and livelihood policies in South Asia, and further applied the model to the central mountainous regions of Nepal. The model can be used to provide an understanding of how a rural livelihood process can be affected by the assets in hand and how livelihood activities are affected by intervention. It is worth noting that livelihood activities are subdivided into production and reproduction activities. Production activities are activities that produce goods or services and which generate income (the actual and potential value of goods and services that can be traded). Reproduction activities can also be called living activities. They include: caring for children, cooking, doing the laundry, etc. They can not be traded, but are indispensable for the welfare of household members. These are living conditions upon which the household depends. vi. Brief conclusions The Sustainable Livelihoods framework reveals a conceptual model for understanding poverty, a model that shows the core elements that make up livelihood and the relationships between them. We can see from these framework diagrams that in a risk environment created by factors such as institutions and policies, under the influence of assets and policies and institutions, the nature and status of assets are at the center of livelihood and determine the type of livelihood strategy chosen. This in turn leads to certain livelihood outcomes that also have an impact on the nature and condition of one’s assets. Common to these frameworks is the use of asset-based livelihood approaches by the institutions and organizations concerned. They have emphasized the importance of understanding the links between policy at

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33

the micro and macro levels, and promoted the link between the two; it is believed that empowering the poor is key part of the livelihood approach and the goal pursued by the livelihood approach. The differences lie in the differences between the NGOs and government agencies themselves and their specific foci. This is primarily expressed in their understanding of sustainability, the starting point of intervention livelihood activities, and the analysis process. In summary, scholars generally believe that the state of the household’s or individual’s assets is the basis for understanding the choices that households or individuals have, the livelihood strategies employed, and the risk environment they are in. It is also a point of entry for the design and implementation of poverty alleviation and development projects and for policy formulation in poverty-stricken rural areas. 2.1.3   Rural Livelihood Strategies and Diversified Livelihoods “Livelihood strategies” often refer to the activities and choices and combinations that people make—including production activities, investment strategies, and reproduction options—to achieve their livelihood goals. In many studies, the two concepts of strategy and activity are interchangeable. Livelihood strategies are choices that people make in terms of capital allocation use and their business activities in order to achieve their livelihood goals. These include production activities, investment strategies, and family planning arrangements. When considering the development of rural households, what are considered are the impact of the fragile environment/background and the support or obstacles that may be obtained from the external environment, from systems and organizations. Rural livelihood strategies are dynamic. Capital use and the composition and proportion of business activities are changed and adjusted as external environmental conditions change. Most research and practice still limit the content of livelihood activities and livelihood strategies to the production activities of rural households, with the more representative ones being Scoones (1998) and Orr (2001), who divide the livelihood strategy into three major categories, including the expansion and intensification of agricultural activities, diversification, and migration. Ellis et al. (2000) have also used a similar classification method to elaborate on different livelihood strategies.

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In particular, diversified livelihoods are of great significance to rural households especially those in developing countries. There is, however, still debate about the specific form of such significance in studies. Diversified livelihood strategies may be either active choices of rural households based on certain economic conditions or passive adaptation to fragile environments. There is still debate on the role of diversified livelihoods, such as whether they help to improve the stability of rural households’ income; whether they have widened the gap between the rich and the poor in rural areas or reduced the risk of rural households; whether they have strengthened or diverted resources for agricultural production, etc. However, as a capability, the ability of rural households to engage in diversification is itself an important element of sustainable livelihoods. Building the rural resident’s ability to diversify his or her livelihood has a positive effect on improving livelihood security and increasing rural income. Rural households’ income sources mainly include agricultural production and nonfarm production. On one hand, agricultural diversification strategies can enable farmers to benefit from new opportunities, especially in a market economy. Research has shown that diversified agricultural production behaviors are also conducive to the protection of the environment and the establishment of sustainable livelihoods while eliminating poverty, and that the corresponding policies should be designed to facilitate such diverse behaviors. On the other hand, many poor rural households find it difficult to benefit from the modern economic development process. One important reason is that they are often excluded by the market: their production methods may still afford self-sufficiency, and their production is still primarily focused on traditional food crops. The widening of the market is reflected not only in the transition from subsistence agriculture to commercial agriculture but also in the diversification of farmers’ capital and income sources. Nonfarm activities are an important part of livelihood diversification. Compared to agricultural diversification and structural diversification, the diversification of income sources means that nonprofessional household capital is being used in nonfarm production activities unrelated to agriculture. In areas that are in need of economic transformation, especially in the rural areas of western China, land is relatively insufficient and there is also surplus labor. Nonfarm activities are not only an important source of income for farmers but also an important means of risk aversion. We can say that

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nonfarm, diversified livelihoods represent a new prospect for rural economic development.

2.2   Impact of the Grain-for-Green Program in Ankang: An Application of the Sustainable Livelihood Framework 2.2.1   Indicators for Livelihood Capital, Livelihood Strategies, and Livelihood Outcomes for Households in Rural Western China Here, the core concepts of the Sustainable Livelihood framework—livelihood capital, livelihood strategies, and livelihood outcomes—are defined in detail with reference to existing literature as well as the specific circumstances of the mountainous areas of western China. i. Livelihood capital “Livelihood capital” includes natural capital, physical capital, financial capital, human capital, and social capital. Since the volume focuses on the analysis of the rural resident at the microlevel, the land resource endowment of the farmer, i.e., the area of cultivated land and forest land, is used to measure natural capital, and water resources and biological resource endowments are not included. “Physical capital” generally refers to the means of production and is not a consumer product. Houses and household durable consumer goods owned by rural households can be used as collateral when the household is at risk or crisis, thus becoming a potential capital for residents. Therefore, these are also classified as physical capital, including housing, durable consumer goods, and large-scale production tools. “Financial capital” refers to monetary reserves owned and available to the rural resident. The term mainly refers to deposits and borrowings obtained in various forms. Savings and loans are not capital that is directly productive. Instead, they can be transformed into other forms of capital. “Human capital” generally includes the quantity and quality of labor in the household, such as age, education level, health status, and skills. What social capital does is that it can enhance mutual trust and mutual cooperation, reduce transaction costs, and improve efficiency through the coordination of actions. In rural communities, the social

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capital of rural households is mainly represented by a family network based on blood relations, a neighbor network based on locations, and a network of friends based on emotions. Here, rural households’ social capital endowments are reflected by the number of associations one is involved in, the number of cadres among one’s relatives, and one’s telecommunications expenses. ii. Livelihood strategies The livelihood strategy of the rural resident determines his or her production and consumption behaviors, which in turn also determine their income sources and consumption status. As such, in this section we analyze the livelihood strategies of rural households through their income sources and consumption status. Rural household incomes can come from a complex array of sources. As such, in accordance with the corresponding definitions of “farmers’ net income” by the National Bureau of Statistics, they are calculated based on the sample survey data. “Farmers’ net income” refers to the net income of farmers from various sources after the deduction of various production expenses. Such income includes: income from agriculture, income from forestry operations, income from animal husbandry, wage income (“work income”), family business income, transfer payments, and property income. Transfer payments are government subsidies (including Grain-for-Green subsidies and direct food subsidies), and “work income” refers to remittances. For the measurement of consumption status, we primarily look at consumption per capita and the consumption expenditure items involved. At the same time, the livelihood strategies of rural households also involve the occupations and industries they work in, as well as how rural households schedule their time. In addition, as agricultural production activities can be significantly affected by the natural environment, especially due to natural disasters and climate change. Therefore, in the analysis of rural livelihood strategies, it is also necessary for us to consider the measures and means adopted by rural households in response to certain emergencies. Doing so can help us examine rural households’ ability to withstand risk. Here, the “risk response strategy” refers to the household’s response to natural disasters or economic difficulties, such as the sale of its assets, the reduction of its consumption, heading outside the village or town to work, borrowing from others, and the use of savings.

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iii. Livelihood outcomes The analysis here is centered on whether rural households are caught in poverty, and on the environmental impacts of livelihood strategies. In particular, we look at the impact of rural livelihood strategies on the environment from three aspects: fertilizer use, firewood use, and herb foraging. The less rural households use fertilizers and firewood, and the smaller the quantity of herbs they collect, the smaller their impact on the environment. 2.2.2   Livelihood Capital for Enrollees and Non-enrollees in the Grain-for-Green program Using the aforementioned Sustainable Livelihood framework and the data of a household survey it had made in November 2011 in four districts in Ankang, Shaanxi Province, the Xi’an Jiaotong University Institute for Population and Development Studies research team examined the livelihood of those households that have participated and those that have not enrolled in the Grain-for-Green program. The data for income and consumption are for the 12 months preceding the survey, from November 2010 to October 2011. See Part I of Chapter 3 of this book for more details on the survey process and sample. Information on the livelihood capital of participating and nonparticipating households is shown in Table 2.1. From Table 2.1, we can see the differences in the five types of livelihood capital between 1123 rural households that have enrolled in the Grain-for-Green Program and 274 households that have not. The households in the former category fare significantly better than those in the latter category for all five types of livelihood capital. The details are as follows: 1. In terms of natural capital, the per capita cultivated land area and forest land area of participating rural households are significantly higher than the households that have not participated in the initiative. In particular, the area of forest land per capita held by households in the former category is as high as 11.41 mu, while the average forest land area per capita held by households in the second category is only 5.52 mu.

38  J. LI ET AL. Table 2.1  Livelihood capital of households that have enrolled in the Grain-forGreen Program and those that have not Item

1. Natural capital Land area tilled per capita (in mu) Forest area per capita (in mu) 2. Physical capital Average home size (m2/ household) Home structure Wooden (%) Bricks and wood (%) Bricks, cement, and steel (%) Others (%) Estimated home value RMB100,000 and below (%) RMB110,000–200,000 (%) RMB210,000–300,000 (%) More than RMB300,000 (%) Large-sized production tools Excavators (units/100 households) Forklifts (units/100 households) Motorized tricycles (units/100 households) Tractors (units/100 households) Water pumps (units/100 households) Durable consumer goods Motorcycles (units/100 households) Motorcars (units/100 households) Television sets (units/100 households) Electric refrigerators (units/100 households) Washing machines (units/100 households) Computers (units/100 households)

Sample size Households that Households LR/t (1397) have enrolled in the that have not Grain-for-Green (274) Program (1123) 1.56

1.63

1.26

*

10.26

11.41

5.52

***

127.42

129.55

118.69

45.6 16.1 38.2 0.1

44.4 16.2 39.3 0.1

50.6 15.8 33.2 0.4

60.2 28.7 8.2 2.9

58.8 29.9 8.3 3.0

65.7 23.7 8.3 2.3

*

NS

NS

0.14

0.18

0.00

NS

0.36 2.15

0.45 2.32

0.00 1.46

** NS

0.64 7.30

0.71 7.12

0.37 8.03

NS NS

38.94

41.76

27.37

***

5.51

5.79

4.38

NS

95.42

99.82

77.37

***

44.45

47.82

30.66

***

78.02

81.66

63.14

***

10.31

11.04

7.30

** (continued)

2  RURAL LIVELIHOOD: THEORIES AND APPLICATIONS 

39

Table 2.1  (continued) Item

Sample size Households that Households LR/t (1397) have enrolled in the that have not Grain-for-Green (274) Program (1123)

3. Financial capital Bank loans (%) 27.1 Bank deposits (%) 25.4 Average annual household cash 15,514.99 income (%) 4. Social capital Have borrowed from friends or 33.2 family (%) Households that are able to 4.50 borrow significant sums Household telecommunications 111.48 expenses in preceding month (yuan) Involved in one or more types of 4.7 associations (%) Planters’ or purchasing/sales 2.6 associations (%) Tourism-related associations, like 0.7 BNB associations Agricultural machinery associa0.3 tions (%) Other types of associations (%) 1.6 No. of associations involved in 0.05 (per household) 5. Human capital No. of male workers per 1.44 household No. with at least junior high 1.66 school education in household No. of skilled workers in 0.38 household No. who have undergone some 0.38 skills training in household

30.3 26.2 16,575.85

33.5

13.9 22.1 11,003.23

32.1

*** NS **

NS

4.50

4.49

NS

117.02

88.72

***

5.4

1.5

***

2.9

1.5

NS

0.9

0.0

**

0.4

0.0

NS

2.0 0.06

0.0 0.01

*** ***

1.49

1.24

***

1.74

1.34

***

0.41

0.26

***

0.42

0.22

***

Notes The t-test is used to test for average values while LR (likelihood ratio) is used to test for distribution as follows “***” indicates that p