By taking a case study in Yuanmou hot dry vally

the economic

ecological and social returns of the model and conditions for the model have be analysed as follows:(1)The economic benefit is high

the economic inner return ratio(EIRR) is 47%～133%

the economic net present value (ENPV) is 300～700 Yuan

the economic benefit cost ratio (EBCR) is 3.74

the time of returns on investment is 4.08 years;The density of ground cover increased from less than 15% to 91.2%

the rate of erosion reduced by 98%

from 16 381t/(km2.a)to less than 200t/(km 2.a).The flood damage to the farmer who lived beside the mouth of Ludouqing eroded gully and 108 highway eliminated;The high benfits of the model increase the confidence of exploitation and control of small watershed by famers and society. The model is an excellent example for reforming the control of small watershed.(2)The Benefit is high

loans can be repaid; The society is stable

the socialism market system and legal systems are being built and improved. The initiative

exploitation and controlling of eroded gully by interest free loans is high; The source of loans for exploitation and control of small watershed is stable and reliable ;There are enough scientific techniques helping the development of small watershed; The Administration is in order. According to the high economical returns of the model of exploitation and control of watershed and above conditions

a police and law of development and harness of small watershed by loans should be issued as quickly as possible by government and department responsible for the work

for adapting the deve lopment of socialism market economy.