Public Preferences for the Design of a Farmland Retirement Project: Using Choice Experiments in Urban and Rural Areas of Wuwei, China
This paper presents an application of a choice experiment measuring public preferences for a farmland retirement project (FRP) in the Gansu environmental degraded region of China. The project helps improve China's long-term food security, and information on public preferences can be used to cost-effectively design such policies. FRP is conceptualized with four attributes relating to public preferences: Areas enrolled in the program, duration of the contract, priority zone for conservation, and
... egetation type for planting. The analysis employs a mixed logit model, allowing for preference heterogeneity, and explores the differences between the willingness to pay of urban and rural residents. Results identify substantial benefits for FRP, and these benefits are closely linked to the program design. Results also show that the willingness to pay for a longer period of the program of urban residents is significantly higher than that of rural residents. Finally, this study proposes policy recommendations that the number of areas and years of the current FRP in the study area can be increased moderately, but not excessively, to further benefit local residents. soil erosion, stabilizing land prices, and reducing agricultural overproduction [6,7]. The EU also launched its five-year volunteer set-aside program in 1988, followed by the MacSharry Common Agricultural Policy reforms in 1992, to make it mandatory for farmers to retire a percentage of their land each year . The reforms helped regulate the grain market and protect the environment until it was canceled in 2008 and replaced by a new voluntary retirement program. The Japanese government carried out the Rice Paddy Set-aside Program in 1970, which aimed both to protect farmers' income and maintain domestic rice prices through policy measures, such as land retirement, price subsidies, and import tariffs  . Different countries implemented their land retirement policies through subsidies which helped maintain both a stable agricultural market and an improvement of agro-ecological conditions, so as to ensure the sustainable utilization of land resources. In 2016, China's central government appropriated 686 billion RMB conservation funds to 1.16 million mu (15 mu = 1 ha) of arable land (0.07% of China's total grain cultivation area) for the implementation of pilot farmland retirement projects (FRP) . Three regions, including groundwater funnel areas in Hebei and Heilongjiang provinces, heavy metal-contaminated areas in Hunan province, and areas with serious environmental degradation in Guizhou, Yunnan, and Gansu provinces, were designed to retire a certain quantity of arable land for difference ecological restoration purposes. In 2017, the subsidy for the project was expanded to 1.06 billion RMB with 2.00 million mu of arable land (0.12% of China's total grain cultivation area) involved  . In order to ensure that the FRP could be promoted smoothly and the benefits outweigh the costs of the project, it is necessary for the policymakers to take public preferences into consideration. Moreover, studies have shown that potential social benefits arising from land preservation and conservation practices are often associated with a set of attributes that characterize the project design             . For China, the FRP is still at a pilot stage and details concerning the design of the project are still in progress. While the benefits of the FRP will depend upon the details of how the project is designed, a lack of public preferences will hinder the development of policies that help maximize social benefits for a given conservation budget. To overcome the above limitations, this research aims to estimate the public's ex-ante preferences for the FRP design for the first time, and identify which of the design attributes will be valued the greatest. Choice experiments (CE) have been employed for the estimation of China's FRP benefits which possess different dimensions of values. By incorporating the benefit-related attributes of the FRP design, such as area, location, duration, and restoration measures in a hypothetical setting, public preferences can be elicited using their trade-offs of these FRP attributes against the corresponding payment. A better understanding of public preferences for the design of FRP will demonstrate whether the benefits will justify the investment and secure public support in making farmland retirement policies. In this paper, the CE survey was conducted in Wuwei, Gansu province, for eliciting public preferences from both rural and urban areas, and the mixed logit model was considered for urban and rural residents separately, to reflect preference heterogeneity. Previous studies provide evidence that choice experiments can be used to facilitate the design of farmland protection policies             . Several applications of these CE studies, using a willingness to accept (WTA) approach, have investigated farmers' preference for particular features of the European Union countries' agri-environmental subsidy schemes     . Other CE studies, on the contrary, using a willingness to pay (WTP) approach, were able to examine the multiple environmental and social benefits delivered by farmland protection policies       . The CE implemented in our study, using a WTP approach, contributes to the literature by providing some of the first Chinese evidence on a specific farmland protection policy (i.e., FRP). Especially, to avoid biased parameter estimates in the calculation of benefits [23, 24] , mixed logit models and coefficient simulations have been used to account explicitly for the preferences' differences between urban and rural households, which have been found in contingent valuation studies [25, 26] , but have not been adequately addressed in previous CE studies (e.g., [21, 22] ). The remaining parts of our paper are organized as follows: Section 2 introduces the study area; Section 3 illustrates questionnaire design and the survey implementation; In Section 4, we present Sustainability 2018, 10, 1579 3 of 16 the theoretical model used for data analysis; Section 5 gives the results and discussion of the model estimation; and Section 6 concludes the paper and discusses the policy implications of our study.