Beijing–Hebei Miyun Reservoir Paddy-to-Dryland Watershed Compensation Programme

Beijing draws much of its drinking water from the Miyun Reservoir, whose catchment lies mostly in Hebei province's Chengde and Zhangjiakou municipalities. Since 2001 the two sides have run a watershed cooperation framework, and in 2006 they signed a Paddy-Land-to-Dry-Land (PLDL) agreement under which Beijing pays upstream farmers to stop growing water-intensive rice.

The programme aims to reduce water-intensive rice cultivation upstream of the Miyun Reservoir in order to increase downstream water yield and reduce nutrient runoff reaching Beijing's drinking-water source.

Farmers who converted paddies to dryland crops such as maize received 450 yuan per mu per year from 2006, rising to 550 yuan per mu per year in 2008; by 2010 all 103,000 mu (roughly 6,870 hectares) of rice paddies in the target area had been converted.

A peer-reviewed evaluation surveying 723 households (394 participants and 329 non-participants) found the conversion increased downstream water yield by about 18.2 million cubic metres a year and cut total nitrogen and phosphorus loads by 10.36 and 4.34 tonnes a year respectively, for an estimated benefit-cost ratio of 1.5. Participating households saw agricultural income fall by roughly 2,000 yuan relative to non-participants, offset mainly by migrant labour earning over 3,000 yuan more.

Over 88% of participating households said they would revert to rice farming if payments stopped, showing the environmental gains depend on payments continuing indefinitely. A separate ecosystem-service-flow study estimated the full value of the water services Hebei's upper watershed provides to Beijing at roughly $62.8 million a year — above what farmers actually receive — suggesting the programme may under-compensate upstream communities. Because conversion was completed by 2010 and payments are administratively renewed rather than independently re-verified, more recent figures on payment levels or water quality were not found.