Tenure Security, Forest Tenure Reforms and Forest Land Allocation - PowerPoint PPT Presentation

Tenure Security, Forest Tenure Reforms and Forest Land Allocation By Stein Holden*, Jintao Xu** and Xuemei Jiang** *Norwegian University of Life Sciences ** Peking University

Introduction • Research collaboration – Enviroment for Development (EfD)-network – Co-authors from Peking University • Professor Jintao Xu + post-doc researcher Xuemei Jiang • Forestry in China – Research issues • Impacts of the forest tenure reform – Forest land allocation, tenure security, investments, productivity, distributional implications • Reform design – Towards more optimal tenure rights systems? » Enhance economic growth and reduce rural poverty » Collective  Private management? • Planning horizon, economies of scale, collective action, skills, investment » Role of markets? » Role of regulations? » Role of local authorities (village leaders/communes)

Objectives • Assess the logic of communal forest land allocation to individual households in the past and recent forest tenure reforms in China. • Assess the extent of tenure insecurity and determinants of households’ perceived tenure insecurity • Assess the effect of the recent forestry tenure reform on households’ perceived tenure security

Forest Distribution in China

Forest Tenure in China • Two ownership types – State • ~42% forest area and 68% volume; • Managed by state forest enterprises and farms – Collective • 58% area and 32% volume • Growing share of timber production • Diversified management schemes

Heilongjiang Jilin Xinjiang Liaoning Gansu Inner Mongolia Beijing Shanxi Ningxia Hebei Shaanxi Qinghai Shandong Tianjin Henan Jiangsu Tibet Anhui Shanghai Hubei Sichuan Zhejiang Jiangxi Hunan Fujian Guizhou Guangdong Taiwan Guangxi Yunnan South Collective Forests Hainan State Forests Provinces with Few Forests Tibet and Taiwan Main Forest Regions

Categories of Forest Tenure (Collective Forest Land) 1. Individual Household Management 2. Partnership 3. Villager Cluster, Natural Village 4. Outsider Contract 5. Collective Management 6. Ecological Reserve

History of Forest Tenure Reform • Collectivization of forest land in 1956-58 • Returning private trees to households in 1961-62 • Taking the private trees from households again 1966-80 • Following the Household Responsibility System reform for agricultural land: Allocation of forest land to households 1981-1986 – A fluctuating process – Different levels of progress among provinces – Tenure remains a controversial issue • Second Wave: 2000-, – Provision of forest tenure certificates to households for 30-70 years (about 14 % of the plots in our sample) – By 2007, 14 provinces announced new reform policy – In July 2008, Central Government Reform Policy promoting collective forest tenure reform

The farmer shows us his certificates for his forest plots. He has 4 plots about 10km away. One is a private plot which he has rights to forever and the other three are contracted for 50 years. He also has a separate certificate for his house and agricultural land.

Inside each forest certificate is a map of the forest plot, which was done by surveying (not GPS).

Example of bamboo forest. Can be harvested every 3-4 years

Wuning County’s Forest Property Marketing Center [FPMC]

The Survey Data Time Time Prov ovince ince County unty Town wn Village age HH HH 2006.3 06.3-4 Fujian ian 12 12 36 36 72 72 720 720 2006.5 06.5 Jian angxi gxi 5 15 15 30 30 300 300 2006.10 06.10-11 11 Zhej ejiang iang 6 18 18 36 36 360 360 2007.4 07.4 Anhui ui 5 15 15 30 30 300 300 2007.4 07.4 Hunan nan 5 15 15 30 30 300 300 2007.5 07.5-6 Liaon oning ng 5 15 15 30 30 300 300 2007.5 07.5-6 Shand ndong ong 5 15 15 30 30 300 300 2007.8 07.8 Yunna nan 6 12 12 30 30 600 600 Total al 49 49 141 141 288 288 3180 80

Earlier studies • Jacoby et al. (AER 2002) have analyzed the tenure insecurity in form of expropriation hazards on agricultural land and their investment implications related to soil fertility using household and plot level data from two provinces in northeast China

Measures of tenure (in)security • Approaches to measurement of tenure security: – Number of rights approach – Earlier redistributions approach (hazard rate approach) – Direct inquiry of perceptions approach • In this study we combine the three approaches and specifically assess how the first two of these are related to the third

The role of village land reallocations • Instrument to ensure an equitable agricultural land distribution – Substitute for missing land markets • Facilitate collection of taxes and production quotas – Used for rent-seeking by local cadres (Brandt et al., 2002) • Village forest land has been an important source of income for the village (leaders)

The role of village elections for management of forest resources • Villager Committee Organization Law in 1988: – Competitive elections of a village leader and a village committee consisting of four to seven members. – Considerable variation in implementation (Kennedy et al., 2004). – More open elections related to perceptions of more fair land reallocations in a study in Shaanxi province.

Model of forest land allocation Hypotheses : A. The equity principle used for agricultural land is also important for the allocation of forest land. This implies that the main determinant of forest land within a village is the household size vs. B. Forest land is determined by the skills and ability of the households. Education may be used as indicator of ability. C. Local power and influence helps to improve access to forest land. Being a village leader or party member therefore enhances access to forest land .

Model of forest land allocation Hypotheses, continued D. Democratic village elections have contributed to enhance forest land allocation to households E. Good (trusted) local leaders have distributed more forest land to households. F. Frequent agricultural land adjustments have enhanced tenure insecurity and reduced the demand for forest land among household and thus reduced allocation of forest land. G. The second stage forest tenure reform uses a different logic for forest land allocation than the first forest tenure reform and puts less emphasis on the equity principle in the land allocation.

Determinants of plot level tenure security Key hypotheses 1. Forest land certificates enhance tenure security. 2. Frequent land readjustments for agricultural land reduce tenure security of forest plots. 3. Trust in village leaders (good leaders) is positively correlated with tenure security. 4. Tenure security is higher in villages with more democratic elections. 5. Stronger property rights in terms of the number of rights that households perceive to have are correlated with higher tenure security.

Timing of forest plot allocation to households Kernel density estimate .15 .1 .05 0 1920 1940 1960 1980 2000 yrhhmngt kernel = epanechnikov, bandwidth = 1.2146

Estimation issues • Correlation vs. Causality vs. Reverse causality • Endogenous variables – Forest land certificate – Land rights variables – Many household characteristics – Village level variables • What to do? – Instrumental variable approach • Lack good istruments – Use household random vs. fixed effects models on plot level data • Controls for time-invariant unobservable household, plot and village heterogeneity – Robustness assessment: Use of a random certification variable generated with a linear probability model with household fixed effects • Not included in the paper but the results are essentially the same

Descriptive statistics Variables Fujian Jiang Xi Yunnan Tenure variables Mean St.Err. Mean St.Err. Mean St.Err. Individually controlled plot (dummy) 0.916 0.007 0.853 0.012 0.991 0.002 Share of plot controlled by household, 0.171 0.013 0.279 0.014 0.136 0.036 group tenure Forest type (1=Commercial, 2=Ecological) 1.014 0.003 1.037 0.006 1.107 0.006 Has forest certificate, dummy 0.156 0.009 0.132 0.011 0.138 0.007 Year when plot was contracted 1987.6 0.329 1986.0 0.268 1986.1 0.175 Tenure security: Expect to keep plot after 5 1.898 0.008 1.934 0.010 1.892 0.008 years, 2=Yes, 1=Uncertain, 0=No Village level variables Number of land adjustments 1.631 0.025 1.193 0.031 0.857 0.020 Trust in village leader (score 1-10) 6.351 0.030 6.645 0.033 7.535 0.016 Number of village leaders since 1990 4.339 0.027 3.719 0.056 3.740 0.030 Start year of current village leader 2001.3 0.064 2000.6 0.172 2000.2 0.134