Arable land resources are the basic livelihood security for people in poverty-stricken areas, and poor people are prone to uncontrolled expansion of arable land and exogenous ecological damage to secure their livelihoods. To avoid this vicious cycle, China’s poverty eradication policy requires greater management and restoration of arable land in poverty-stricken areas, but it is unknown what impacts it may bring. Therefore, this study examines the impact of policy implementation on arable land by the Difference-in-Differences (DID) model and uses the mediating and moderating models to test the policy’s mechanism on arable land. The results reveal that the policy significantly reduces the arable land, and the results remain robust, controlling for potential endogeneity variables and robustness tests. What’s more, the results of the mediating and moderating effect models indicate that the reduction of arable land is mainly due to the increase of unit yield, guiding the local people to abandon degraded land and to carry out ecological restoration, thus reducing the arable land area and achieving sustainable development. Finally, recommendations are proposed from the perspective of human-land coordination.