How Do Ecological Restoration Programs Shape Grain Production? Evidence from China’s Three-North Shelter Forest Program

Balancing ecological restoration and grain production is a core challenge for land management in arid and semi-arid regions. Large-scale ecological engineering programs are often assumed to constrain agricultural output through land-use competition, yet rigorous causal evidence on their long-term effects and underlying mechanisms remains scarce. This study investigates whether and how China’s Three-North Shelter Forest Program (TNSFP) affects grain production. Guided by the social–ecological systems framework and ecosystem services theory, we hypothesize that large-scale ecological restoration can enhance agricultural output through improvements in ecosystem services rather than crowding out cropland. Using county-level panel data from China covering 2000–2022, we estimate the causal impact of TNSFP on grain production employing a two-way fixed effects model, complemented by the Callaway and Sant’Anna difference-in-differences approach (CSDID), event-study analysis, placebo tests, and multiple robustness checks. Grain production data are combined with satellite-derived vegetation indices, air quality indicators, and ecosystem quality measures to identify mechanism pathways. The results show that TNSFP significantly increases county-level grain production, with baseline estimates indicating an average rise of approximately 3.4 units and larger effects after controlling for agricultural inputs, climate, and socioeconomic conditions. CSDID estimates confirm robust positive effects,. Event-study results reveal negligible pre-treatment trends and gradually accumulating post-treatment effects. Mechanism analysis demonstrates that improved vegetation cover, enhanced air quality, and overall ecosystem quality jointly promote grain production, with ecosystem quality playing a dominant role. Significant regional and land endowment heterogeneity is observed, with stronger effects in cropland-abundant counties and limited impacts in Northwest China. These findings provide new causal evidence that ecological restoration can generate synergistic benefits for land restoration and food production, offering important implications for sustainable land management in dryland regions.