Loess Plateau Watershed Rehabilitation Project — Terracing and Grazing Bans Cut Sediment 57 Mt/Year (China)

China's Loess Plateau Watershed Rehabilitation Project, financed by a US$150 million World Bank (IDA) credit against a total cost of about US$250 million, ran from 1994 to 2002 across 1.56 million hectares in 21-22 counties of Shanxi, Shaanxi, Gansu and Inner Mongolia -- among the poorest, most sediment-eroded parts of the Yellow River basin.

The project terraced 90,446 ha of cropland, afforested roughly 291,000 ha of arbor trees, shrubs, economic trees and orchards, built 149 key dams plus over 3,000 warping and check dams, and backed local grazing bans on goats and sheep. Disbursement was tied to unit prices per hectare verified against 1:10,000 land-use maps; farmers received 30-50 year land contracts, and roughly 60% of costs were recovered from beneficiaries.

Annual sediment discharge to the Yellow River fell by 57 million tonnes; grain output rose from 427,000 to nearly 700,000 tonnes; farmers' per-capita net income climbed from 360 to 1,263 yuan (1993-2001); project-area poverty fell from 59% to 27%. The project's economic rate of return rose from 22% (sediment benefits only) to 29% once carbon-sequestration benefits were added.

A 2022 peer-reviewed meta-analysis of the wider afforestation campaign this project helped popularise (2000-2015, whole 640,000 km2 plateau) found forest cover up about 36% and soil erosion down 13.3%, but regional water yield down 43.3% as new vegetation consumed more water than the grasses/crops it replaced -- a genuine erosion-versus-water trade-off later restoration phases have had to address.