The Chinese government Tuesday announced financial assistance for herders in west China, to reward their efforts in conserving grasslands and to compensate them for losses.

From next year, the policy will be applied in eight provincial-level regions including Inner Mongolia, Xinjiang, Tibet, Qinghai, Sichuan, Gansu, Ningxia and Yunnan, said a circular issued Tuesday after a State Council executive meeting presided over by Premier Wen Jiabao.

The government will give 90 yuan (about 13 U.S. dollars) per hectare of grassland annually to herders living in the regions where the grasslands are severely damaged and herding has been banned, the document said.

Outside of these herding-banned regions, residents will receive 22.5 yuan (3 dollars) per hectare every year if they keep a herd of sustainable size, the document said.

The government will also provide 150 yuan per hectare for farmers to grow grass of better quality.

In addition, each of about 2 million households of herders will receive 500 yuan per year as general assistance, the document said.

More money will also be spent on education and training of herders, the document added.

"Due to excessive herding and low investment in grassland conservation, the area of grasslands in China has shrank dramatically and the environment there has deteriorated. However, local herders lack new ways to make a living," the document said.

The policy is an effort to conserve the natural environment while improving the livelihood of locals, it said.

The central government will allocate 13.4 billion yuan every year for the policies, according to the document.