Resources and Environment and

1 ABSTRACT. China’s Sloping Land Conversion Program seeks to improve both the environmental and economic conditions of rural farmers by paying them a cash and grain subsidy over a period of five to eight years. In exchange, farmers retire a portion of their agricultural land and plant a cover crop of trees or grasses to help prevent soil erosion. This paper evaluates the economic and environmental impact of the program four years after its first implementation. Results suggest the program was successfully targeted at poorer farmers on erosion-prone sloping farmland. There is also some evidence the program is improving farmer incomes and pushing more farmers into off-farm labor markets. However, the targeting of highly sloping farmland (greater than 25 degrees) could be improved