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This article analyzes agricultural sustainability in the context of land degradation, rural poverty and social inequality, taking China’s Loess Hills as an example. The analysis attempts to understand the multi-dimensionality of sustainability at the farm level and its relationship with physical-socio-economic-infrastructural-technological framework conditions in the context of the land set-aside program viz. the Grain for Green Project (GGP). We developed composite indices of sustainability and its environmental, economic and social dimensions using a principal component analysis (PCA)-based weighting scheme. Regression analyses were conducted to examine the relationship between the estimated sustainability indicators and the variables representing framework conditions of knowledge, demographics, resource endowment and production techniques. The stated analysis was conducted on a dataset collected by means of household surveys in 2014 in valleys and flood plain areas in Yanhe Township. Findings reveal hidden correlations among the indicators of environmental, economic, and social pillars of sustainability. The ratio of land under the conservation program to actual farmland emerged as a key determinant of overall agricultural sustainability and its social dimension, which reaches the maximum when the ratio is around 0.56 and 0.64, respectively. The results also show that there is need to balance off-farm and on-farm income diversification as well as highlight the role of women in ensuring the sustainability of farming households. The core achievement of the article is the definition of the thresholds for the land set-aside program and the identification of major determinants of agricultural sustainability in the rural Chinese context in particular and in rural farming communities in general.
