The problem of agricultural waste pollution has aroused wide concern around the world. An effective measure to solve this problem is to implement the compensation policy so as to encourage people to participate in agricultural waste recycling. This paper seeks to estimate households' willingness to accept compensation in terms of agricultural waste recycling adopting the contingent valuation method, and to calculate the compensation standard for households' participation in agricultural waste recycling by methods of non-parametric and parametric estimate. It aims to answer two questions: how much the compensation should be given for encouraging households to participate in agricultural waste recycling? Which factors would affect willingness to accept compensation value of households for participating in agricultural waste recycling? The results show that most households recognize the value of agricultural waste recycling and a certain amount of compensation which is about 1.08%–1.31% of average family annual income does encourage households to participate in agricultural waste recycling. Household's willingness to accept compensation and household's expected value of compensation are affected by personal or family characteristics (such as gender, household income) as well as the non-economic variables (such as environmental knowledge and environmental attitude). According to this research, reasonable compensation standard is the cornerstone of the effectiveness and efficiency of compensation policies. Household income inequality and capital allocation in terms of households' willingness to accept compensation should be taken into consideration when compensation policies about agricultural waste recycling are formulated. Environmental education for households is an effective measure to enhance their environmental consciousness, while raising the strength of government's waste management is turned out to be effective for improving the rural ecological environment. Conclusions of this study provide an important scientific basis for developing countries and regions to formulate compensation policies in terms of inspiring their agricultural waste recycling.