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Xu Ef D2 Tenure
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    Xu Ef D2 Tenure Xu Ef D2 Tenure Presentation Transcript

    • EfD 2nd Annual Meeting Collective Forest Tenure Reform in China: Outcomes and Analysis of Driving Forces Jintao Xu, EEPC Peking University November 5, 2008, Lake View Hotel
    • Forest Distribution in China
    • Main Forest Regions
    • Forest Sector in China
      • Forest sector remains highly regulated
      • Control in logging, shipping, land use, etc.
      • Logging ban and
      • Lots of government programs
      • And…..
    • 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
    • History of Tenure Reform
      • First Round: 1981-1986
        • A flucturating process
        • Different level of progresses among provinces
        • Tenure remains controversial Issue
      • Second Round: 2000-,
        • By 2007, 14 provinces anounced new reform policy
        • In July 2008, Central Government Reform Policy was declared, conclusion of the polciy change process promoting collective forest tenure reform
    • What’s New?
      • Continuation of efforts to expand and strengthen forest tenure rights for farmers
      • Village representative committee as decision maker on land redistribution plan
      • Longer term contracts (30,50,70)
      • Renewal of forest certificates (uniformed, GIS, etc.)
      • New rights: transfer, inheritance, collateral,etc.
    • Categorizing Forest Tenure
      • Individual Household Management
        • ( Small Private Plots, Responsibility Hilly Land, Contracted, Rented, Planted and Occupied)
      • Partnership
      • Villager Cluster, Natural Village
      • Outsider Contract
      • Collective Management
      • Ecological Reserve
    • The Survey Time Province County Town Village HH 2006.3-4 Fujian 12 36 72 720 2006.5 Jiangxi 5 15 30 300 2006.10-11 Zhejiang 6 18 36 360 2007.4 Anhui 5 15 30 300 2007.4 Hunan 5 15 30 300 2007.5-6 Liaoning 5 15 30 300 2007.5-6 Shandong 5 15 30 300 2007.8 Yunnan 6 12 30 600 Total 49 141 288 3180
    • The Change of Area Share by Tenure Type, 2000-2005(6)
    • Forest Area by Tenure Type (ha. Village Average)
    • Results 1 Timber Harvest Before and After by Village
    • Result 2 Afforestation Before and After by Village
    • Result 3 Change in Household Income Structure
    • So What?
      • Is this social optimal?
    • Speculating on Reform Rationale
      • In a collective system, land is so called “collective owned”. Ordinary farmers are de jure owner, but the leaders of the collective (administrative village) practice de facto decision making power.
      • The leaders are self interested. Without sufficient monitoring and sanctioning mechanism, the collective leaders will function in a way far from maximizing collective interests.
    • Failure of Collective Forest Management Fujian’s Trial as Example
      • The size is large, if no management, easily tragedy of commons problem
      • When managed by village leaders, the voice of individual farmers gets smaller once the scale of collective operations gets larger.
      • Information asymmetry between farmers and leaders
      • Widespread corruption
      • Punishment cannot be used regularly because village leaders are backed by upper level government
      • Management efficiency is low and declining, so is the rent
      • Rising social conflict and farmer resentment
      • Rising cost of forest protection
    • Potential Benefit of Reform
      • Hopefully, individualization solves the tragedy of commons problem (NTFP for example)
      • It reduces room for corruption
      • It provides incentives for individual farmers to invest in forest planting and re-planting--efficiency gain (1)
      • It creates forestland market so that scale economy might be achieved--efficiency gain (2)
      • Farmer can use forest certificate as collateral so that farmers ability to invest increases--efficiency gain (3)
      • And it is more equitable a system than the previous one
      • (revenue distribution, bargaining power for farmers, safety net, etc.)
      • Better prospect of sustainable development
      • Local Optimum
    • Potential Problems
      • Forestland fragmentation, at least in near term—some efficiency loss
      • Credit market not developed so well, therefore lack of funding for investment—delayed efficiency gain
      • Social elites capture large area of forests and land--equity issue
      • Concerns about weak farmers losing land quickly—social stability and equity issues
      • Market volatility leading to deforestation, concerns about sustainability
      • Empirical Questions
    • Empirical Analysis of Farmer Collectives’ Choice
      • The principle of reform (VRC, VA) allows testing the impacts of the following factors:
        • Quality of Village Democracy
          • Non-Benevolent Village Government
            • Elite Capture (outsider contract)
            • Non-Independent Village Government (government interference)
          • Rent Seeking-Efficiency Trade-off
            • Low efficiency of management leading to wide spread financial deficit
            • In Fujian, most of the village council improved their financial situation after reform, by collecting fees and charging prices on forest land
            • Opportunity cost of reform for village management important factor
    • Empirical Analysis (cont’d)
      • Institutional Risk (- household)
        • Tenure insecurity
        • Government Intervention
          • Logging quota
          • Eco-reserve
      • Social Capital (+ community)
      • Market Development (+ household)
      • Alternative Income (- household demand)
      • General Village Characteristics
    • Econometric Model
      • Estimation of a system of tenure share change
      • Type(i, 2005)-Type (i, 2000)=f(6 categories of determinants, 2000)
      • i=1,2, …, 5.
      • The Sample:
        • Fujian and Jiangxi
        • 90 villages
    • Tenure Change: Impacts of Driving Factors (2 Provs)(SUR)
    • Tenure Change: Impacts of Driving Factors (2 Provs)(Fractional Response)
    • Conclusion
      • Government interference, tenure insecurity, tend to induce increase in group management (risk sharing), but reduce demand for individual tenure
      • The quality of village government matters
        • Faireness
        • Rent Seeking-Efficiency Trade-off Seems to Exist
      • Compensation for opportunity cost of collective leadership can facilitate reform.
      • Higher alternative income will reduce individual demand for forestland;
      • The Role of Social Capital??
    • Implications on Regulations
      • Precautionary
        • Eco-Reserve set aside before current reform
        • 30% area in collective forests, mostly uncompensated
        • 75% area in key state forests
      • Ongoing
        • Relaxation of Logging Quota Control
      • Future Efforts
        • Management Plan to become formal regulatory tool
        • Regulation on land transfer seriously speculated
    • Thank You!
    • Ongoing and Future Efforts
      • Impacts of Forest Tenure Reform on Labor Market
      • On land market
      • Forest investment
      • On state forest reform
      • Follow-up surveys and assessment needed to obtain understanding of full results of forest tenure reform
    • Recent Tenure Reform Participation by Village
    • Contract Length by Tenure Type Type1:Individual HH Type2:Villager cluster Type3:Partner Type4:Outsider contract
    • Knowledge of Tenure Rights by Household
    • Source: Data for 1986 was from China Forestry Year Book (CFYB, 1987), China Forestry Publishing House. Data for 2000 was from the survey conducted in 2006. Household-Contracts in Fujian and Jiangxi, 1986 and 2000
    • Some Explanations
      • Historical Background
        • Private ownership 50 years ago
        • Similar to East European Countries
        • Human Capital: Farmer Individual entrepreneurship
        • While most developing countries are with history of colonial regime. State-ownership was dominant in natural resource sector and devolving down to community is already a big and difficult step
      • Institutional Learning: success of agricultural reform
      • Equity issue: agricultural land tenure
      • Efficiency issue: failure of collective management
        • Ineffectiveness of Income generation and forest conservation
      • Political-economic factors: declining share of forestry in regional economy
    • Tenure Change: Impacts of Driving Factors (2 Provs)(SUR)
    • Motivating Empirical Analysis
      • Strong disbelief still exists toward promises of forest tenure reform
      • (foresters, social elites, etc.)
      • In literature, “community forestry” seems to be the solution for developing countries
      • Outstanding examples: Mexico, India, Africa
      • China is moving toward individualized tenure system in all land. (ag, forest, grassland, even sea shore). Can this be successful?
      • And Why?
    • Forest Area by tenure type (ha. Household average)