Forestry Sector
Forestry being integral component of rural economies and land use systems in mountainous areas of China, along with the agricultural reforms, parallel reforms were also triggered in the forestry sector (Ruiz-Perez et al, 1998). The forestry sector in the last thirty years has undergone significant policy and administrative changes. It was mainly initiated from 1978 onwards when as part of the ‘household responsibility system (HRS)’ the responsibility of production systems including forestlands was passed over to the farmers. The basis of the HRS is a transfer of land use rights by the commune or natural village to farmers from that village to manage the land for their own benefit. Households were made responsible for their contractually assigned output quotas and were given the rights to sell the excess at market prices. Several assessments have shown this transition to be the main reason for agricultural growth. With the demonstration of increased income from agriculture, as Liu (2003) note, farmers also became interested in timber production particularly in the southern part of China.
However, as forestry sub-sector contributes relatively little to the national economy, unlike the unprecedented high-rate growth in agriculture the progress in development of rural forest sector have been mixed (Liu, 2001; Yin and Newman, 1997). In addition, the impacts of the reforms have been different in different regions. For instance, initially in the southern part of China, which was the major timber area, similar production responsibility as under HRS for agriculture activities were earlier denied to the households for forestry. This was however, not the case in northern part of China, which has mainly agricultural farms. As Yin and Newman (1997) point out that though the reforms in both north and south experienced increases in the share of private tenure for their forest lands and both witnessed market incentives, but the government authorities were slower to liberalize and quick to rescind some of the reforms in the south. Hence, uncertain policy environments lead to different performance in terms of afforestation and regeneration efforts in different regions. Overall, as Shi and Xu (2000) note that despite substantial potential of timber resources in various regions of China, due to uncertainty of land tenure and market distortions associated with it, the forestry sector lags behind other sectors.
Meanwhile, there has been tremendous growth of ‘economic forests’ and bamboo forests allover the country, including the south, since the late 1980s (Yin et al, 2003). These increases have been primarily driven by private initiatives; and as a result, the production of NTFPs has come of age and become the backbone of the local economies in many areas (Ruiz-Perez et al., 2001). In particular, empirical evidences have shown that bamboo contributions have benefited poor as well as rich groups, and these contributions have moved many households from the poorer to the richer classes (Ruiz-Perez, 1998). However, though the bamboo sector reforms have reduced the inequality in bamboo land and bamboo income but the share of bamboo income in the total income inequality has increased (Kant and Chiu, 2000). Hence, there is still need of further empirical evidences to establish this linkage and make conclusive recommendations for development strategies to promote income from NTFPs in poverty alleviation in various regions of China.