LAUSR

The Grassland Ecosystem Subsidy and Award Scheme (GESAS) is a key set of policy instruments designed to improve grassland condition and herder livelihoods in China. This paper uses a Structural Equation Modelling (SEM) approach to investigate the impacts of GESAS on livestock practices, herder incomes and employment, and overall herder satisfaction in Inner Mongolia. The findings reveal that more intensive use of on-farm inputs mediated the effects of lower stocking-rate under the scheme on on-farm income. Conversely, GESAS had a direct and negative impact on off-farm income. Overall the findings do highlight the incentive role of GESAS on herder decisions, but also indicate a level of dissatisfaction among herders as the level of compensation is insufficient to cover the extra effort expended by herders and does not meet the livelihood expectations of most herders.