The Great Western Development policy: how it affected grain crop production, land use and rural poverty in western China

Purpose - The purpose of this paper evaluates the effects of the Great Western Development (GWD) policy on agricultural intensification, land use, agricultural production and rural poverty in western China. Design/methodology/approach - The authors collect county-level data on land use, input application, grain crop production, income, poverty and geophysical characteristics for 1996–2005 and use a quasi-natural experimental design of difference-in-differences (DD) in the empirical analysis. Findings - Results suggest that the GWD policy significantly increased the grain crop production in western China. This increase resulted from higher yield, with increased fertilizer use and agricultural electricity consumption per hectare, and more land allocated to grow grain crops. The policy also increased land-use concentration, reduced crop diversity and alleviated rural poverty in western China. Originality/value - This paper makes three contributions. First, the authors add to the growing literature on the GWD policy by evaluating its effects on farm household decisions and exploring the mechanisms and broad socioeconomic impacts in western China. Second, the authors take advantage of a quasi-natural experimental design to improve the identification strategy where input use, land allocation, production and off-farm labor participation are all endogenous in a farm household. Third, the authors explore a long list of variables within one integrated dataset to present a comprehensive picture of the impact of the GWD policy.