China paid farmers to restore land they held long-term

For millennia the Loess Plateau's deep, wind-blown soil fed northern China; by the 1990s centuries of farming and grazing had left it one of the world's most eroded landscapes, with sediment choking the Yellow River and rural incomes among the country's lowest.

The standard answer was more top-down engineering: plant trees, build check dams, restrict farmers. The World Bank-backed project, approved in 1994 at about $252 million, did the opposite. It contracted households to convert their sloping cropland into terraces, grass and forest, paid them grain and cash through the transition, and gave them long-term land contracts of 30–50 years so the restored land belonged to them.

The incentives held. Households maintained terraces and trees because they kept the gains, so erosion control became a private investment rather than a public chore. Incomes more than doubled, 4 million hectares were restored, and sediment flowing into the Yellow River fell by more than 100 million tons a year.

Independent evaluation rated the second phase's outcome satisfactory, with borrower performance highly satisfactory. The World Bank later held the project up as a model landscape approach that returned a devastated area to sustainable agricultural production and improved the livelihoods of 2.5 million people.

Pay farmers to restore land they own long-term

Long-term contracts made every farmer the owner of the restored land, so maintenance was self-interested.

Paying households during the transition covered the years before terraces became productive.

Villagers planned each watershed with agronomists, so measures fit local land and labor.

Restricting grazing and tree cutting protected the investment from the commons problem.

Make the people who must maintain the fix its owners: long-term tenure and direct payment turned erosion control from a state project into a household investment that kept paying.

By 2005 both phases were complete. The World Bank's evaluation rated the second phase's outcome satisfactory and borrower performance highly satisfactory, and the Bank later cited the project as a model landscape approach that improved the livelihoods of 2.5 million people. The payment-for-restoration design was replicated in later national programmes across China.