<p>China’s policy of degrazing remediation has raised concerns about farmers’ welfare and resource allocation efficiency. We developed a dynamic general equilibrium model that includes cash crops, staple crops, and animal husbandry. We then simulate and analyze how the policy affects food production, income distribution, social welfare, and resource allocation. The simulation results show that the policy has increased overall food production and improved food security. However, in some regions, "one size fits all" implementation has also intensified negative effects, including decreased unit output efficiency, reduced farmers’ incomes, lowered social welfare, and widened the income gap between urban and rural areas. This indicates that the “one-size-fits-all” approach—requiring all basic farmland to be used for food cultivation—is inflexible and overly regulated. We recommend to implement non-grain cultivation rectification in a targeted and orderly manner, prioritizing high-standard farmland already converted to non-grain use and allowing flexibility for other areas, and in the long run, gradually shift from “mandatory allocation of resources by administrative means” toward a policy that focuses on improving efficiency.</p>