Abstract: Taking the Quasi-natural Experiment of the Farmland Protection Fund in Chengdu as an example, based on the 2005-2018 LUCC remote sensing monitoring data and socio-economic data, the paper estimates the inhibitory effectiveness of the financial compensation policy for farmland protection on the non-agriculture conversion of cultivated land by using PSM-DID method. The results show that: the implementation of the financial compensation policy can significantly restrain the non-agriculture conversion of cultivated land, and this conclusion is still valid after a series of robustness tests; Moreover, with the continuous implementation of the policy, the inhibitory effectiveness of the non-agriculture conversion of cultivated land has gradually become apparent; The financial compensation policy for farmland protection plays an important role in restraining the conversion of cultivated land to urban land, while the conversion of cultivated land to rural residential land has also been avoided. However, it’s not effective for the financial compensation policy to restrain the conversion of cultivated land to traffic roads, airports and other construction land. It is suggested to summarize the experience of pilots for the implementation of financial compensation policy and speed up the construction of compensation mechanism for farmland protection, and as well as to improve the status of farmland protection in the performance assessment of local government to stimulate the inherent incentives for farmland protection.