Impact of Wheat Price Changes on Farmers’ Willingness to Participate in Fallow

After operating for four years, the fallow project in the groundwater funnel area of the North China Plain has produced an initial water-saving effect. However, groundwater funnel remediation is a long-term process, and grain price changes over time may affect farmers’ willingness to participate in fallow. Based on the estimation by the Cobb-Douglas production function, the relationship between farmers’ satisfaction with fallow compensation and planting income is analyzed based on survey data collected from farming households in Hebei, a typical province located in the groundwater funnel area. Using this data, the impact of wheat price changes on farmers’ willingness to participate in fallow is simulated. The results indicate wheat price changes affect farmers' expected planting income and consequently their willingness to fallow; 88% of farmers would be unwilling to participate in fallow with a 0.1 yuan per 500 g increase in the wheat price, whereas 71.4% of farmers would be willing to participate in fallow with a 0.2 yuan per 500 g decrease in the price. Finally, some policy implications are proposed, such as the recommendation that the fallow compensation should be adjusted according to the wheat price multiplied by the average wheat yield of the three years before fallow in the North China Plain.