3rd Mekong Forum on Water, Food & Energy. Presentation from Sessions 3&5: Extending the benefits of hydropower: Clever suggestion or realistic goal?

1. THE FIVE MILLION HECTARE
REFORESTATION PROGRAM IN VIETNAM:
AN ANALYSIS OF ITS IMPLEMENTATION
AND ITS TRANSACTION COSTS
Huong Tran Thi Thu, Manfred Zeller, Hoanh
Chu Thai

2. Introduction
2



Forest tenure has been changing in Vietnam
Forestry programs:
 PAM (the United Nations' Food Program)
 Program 327 (a nationwide reforestation
program)
 Regional reforestation programs
1998: the Five Million Hectare Reforestation
Program (5MHRP)

3. Research questions
3

What are objectives of the 5MHRP? How has the
program been implemented? What are the roles of the
different stakeholders in the implementation process?

What are the incentives and disincentives for farmers
in the program?

How much are the transaction costs and benefits to
the farmers when they participate in the program?

How to reduce transaction costs in implementation in
forestry program?

4. Map of study site
4

5. Methodology (con’t)
5

Sample size: 39 interviews and 15 focus group
discussions




Province level: 2 interviews
District level: 7 interviews
Commune level: 5 interviews + 5 focus group discussions
Village level: 25 interviews + 10 focus group discussions
 Village headman: 5 interviews
 Community: 10 focus group discussions
 Household : 20 interviews

6. Methodology(con’t)
6

Data collection






Participatory Rural Appraisal
Focus group discussions (guidance of semi-structure
questionnaire and the support of Net-Map tool)
Individual in-depth interviews (guidance of semi-structure
questionnaire and the support of Net-Map tool)
Informal communications
Observations
Data analysis

Data from focus group discussions and individual in-depth interviews
was transcribed and coded by Nvivo in order to be grouped to
content and thematic analysis.

7. Typology of contracts in the 5MHRP
7
Contract
type
Name of contract
Duration
(year)
Contract target
Protection forest
Type 1
Plantation of new forest and protection of
planted forest
Zoning for protection of natural forest
9
Type 3* Zoning for regeneration and protection of
natural forest
6
Individual
household
1
Individual
household
Type 2
5
Individual
household
Village community
Production forest
Type 4
Plantation of new forest
(*): was not implemented in selected communes

8. Command and money flows in the 5MHRP
8
Provincial People’s Committee
Provincial Treasury
Provincial Executive Committee
District Treasury
Management Board of Da river
Protection Forest (MB2)
Provincial Projects Management Board
Management Board of Nature
Conservation Areas (MB3)
Seedling
company
District Agroforestry
Extension Department
Household/Community
Command flow
Money flow
District Management Board of
Protection Forest (MB1)

9. Transaction costs days for five communities
9
Village
Natural Total TCs TCs per ha Start-up Variable transaction costs (% of total TCs)
forest (labor day) (labor day)
costs
Regular
SelfConflict
Joining
area
(% of total
meetings monitoring resolution monitoring
(ha)
TCs)
and
verification
Co1
179
1.317
7.4
2.9
23.4
68.4
4.0
1.3
Co2
11
76
6.9
23.1
64.5
7.4
0.0
5.0
Da1
330
690
2.1
3.8
24.9
70.8
0.0
0.5
Da2
31
263
8.5
10.3
68.1
19.0
2.4
0.2
Da3
180
226
1.3
7.0
78.4
11.6
1.9
1.1
514
5.2
4.9
34.4
57.2
2.5
1.1
Average 146.2

10. Transaction costs days between individual and
community contracts
10
The share of transaction costs between
individual and community contracts
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0.2
2.5
57.2
Joining monitoring and
verification
Conflict resolution
Self-monitoring
97.6
Regular meetings
34.4
0.8 0.4
4.9
Individual
Community
Contract type
Start-up costs

11. Benefits per hectare per year of forest
management
11
Community contract
Individual contract
Benefit
Value (US$)
Government monetary subsidy
NTFPs
Auxiliary trees extraction
Total benefit
Share (%)
Value (US$)
Share (%)
6.85
17.9
66.7
16.1
31.48
82.1
260.5
62.7
-
-
88.2
21.2
38.3
100.0
415.4
100.0

12. Benefits and Costs of forest management for five
communities
12
Benefits and costs for five communities
1,905.2
Da3
12,309.6
2,993.1
Communities
Da2
7,280.3
9,915.2
Da1
32,047.5
1,372.2
Co2
4,141.5
22,006.8
Co1
32,500.2
-
5,000.0
10,000.0
15,000.0
20,000.0
Costs and benefits in US$
Costs
Benefits
25,000.0
30,000.0
35,000.0

13. NPV per hectare per year between individual
and community contracts (in US$)
13
Of which
Village
Community
contract
Individual
contract
Household planting Household planting
woody trees - acacia woody trees - bamboo
Co1
11.7
315.9
104.9
456.5
Co2
50.3
315.4
278.7
339.8
Da1
13.4
289.7
156.8
334.0
Da2
33.1
77.0
77.0
-
Da3
11.6
-
-
-
Average
24.0
267.4
144.4
376.8

14. Conclusions
14

The diversity of informal institutional arrangements resulted
in the big variation of transaction costs in our studied areas

The extent of transaction costs was relatively large for
households.




Community contract: regular meetings (34%) and self-monitoring
(57%) constituted a large proportion of the total transaction costs;
Individual contract: self-monitoring (98% of total TCs)
Costs for conflict resolutions and for participating in official
monitoring and verification are relatively small for households in
both types of contract
The NPV per hectare per year was higher for households
under individual contract than for those under the
community contract

15. Recommendations
15

High transaction costs incurred by households


can become a barrier to participate in an environmental
management program
might lower the real benefits obtained by households

A higher government subsidy would be needed to match the
amount given out under the individual contract;

To increase the payment under individual contract to
achieve a higher quality of planted forests with more woody
trees

16. 16
Thank you for your attention!