Land degradation and desertification have becom severe environmental problems in arid areas due to excessive use of water resources. It is urgent to reduce agricultural water use fo ecological rehabilitation, which may result in a decrease in agri cultural production and farmer's welfare. This paper focused on the impacts of some main measures including extensions of water saving irrigation, expanding solar green house and increasing off farm employment, which are generally recognized to be importan to alleviate water shortage and poverty. A bio-economic model i applied taking Minqin Oasis in Gansu Province as a case study site. Simulation results showed that the effect of expanding sola greenhouse was more positive than other ones so it drew more attention. On the view of the different effects between each irriga tion zone, mixed policy patterns suitable for them are suggested In Baqu, expanding solar greenhouse should be the most impor tant, auxiliary with encouraging pipe irrigation. Inversely, with regard to Quanshan, the major attention should be paid to subsidy for pipe irrigation and it would be better to supply the off-farm employment opportunities to the households in Huqu, where the expanding of solar greenhouse should also be summoned. Finally it should be noted that farmer's income would only resume to 90% of the current level in the short run by putting more effort into lo cal policies. Thus, the ecological compensation is needed to ensure farmer's welfare.
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