The Effect of Payments for Ecosystem Services Programs on the Relationship of Livelihood Capital and Livelihood Strategy among Rural Communities in Northwestern China

The security and quality of livelihoods for peasant households is the core issue for rural areas in China. A stable livelihood contributes to the harmonious development of related polices, poverty eradication and sustainable use of resources. In Qinghe County, located in the extremely arid zone of Northwest China, 238 validated surveys were conducted. The analysis focuses on the importance of livelihood capitals for the selection of on- or off-farm livelihood strategies among beneficiaries of different kinds of ecological compensation packages. The goal is to see if different groups of beneficiaries are better able to pursue off-farm livelihoods activity, which reduces pressure on the resource base, and whether specific capitals are especially effective in helping households pursue off-farm livelihoods, which benefits their well-being. The findings show that proportionally more herdsmen (who participated in a pastureland rehabilitation program) were able to pursue off-farm livelihoods than farmers (who participated in the cultivated land reforestation program), and especially agro-pastoralists (who participated in both programs). Further, models of livelihood strategy show that human and financial capitals facilitate off-farm livelihoods, while productive capital tends to lead to on-farm livelihoods. These findings indicate that there is no single determinant of livelihood strategy, and future policies must consciously differentiate among beneficiaries to reach the desired result