Key Issues
One of the key issues, in the context of forestry sector reforms and its implication on contribution to rural income through timber has been the effect of security of land tenure and market setting. Hyde et al (2003), argue that the Chinese experience demonstrates that the farmers and other small land-owners will plant and manage forests, once they obtain the rights to the land and its forest resources and if trees and forests are the highest valued users of their land. Yin et al (2002), taking the case of difference in performance of northern and southern part of China argue that if farmers are granted not only land use rights but also liberalized market access, the incentive structure for forest production can be greatly improved. However, the harvesting regulations and compulsory timber delivery to the state procurement agency at low prices as prevalent in southern part of China has been argued by many as major impediment to the engagement of farmers in timber production. As Liu (2001), puts it, ‘the regulation of harvesting and marketing trees in [southern] China has prevented farmers from the full benefits of the shifts from collective to household-based management and discouraged them from investing in afforestation and regeneration. Liu et al (2003) based on the study conducted in Gunagxi, show that due to adverse government policies for timber harvesting and taxation on timber, the local farmers sell all their wood as fuelwood in the free market rather than directing their small-diameter wood to wood processing factories. This is despite the fact that there is high demand and prices for small-diameter wood than fuelwood.
The frequent changes in the administration of China’s forestry sector (policies and procedures) have had a substantial negative effect on investments in forestry and also on the forest cover. Many of these changes have not been able to bring in the desired change due to a number of factors even in the state-owned forests. As Xu et al. (2003), point out that economic factors have dominated forest manager decisions and hence the recent ban of logging in state-owned forests may not be effective either in increasing forest growth over time or moving China’s national forests to more regulated conditions.
Hyde et al (2003), taking the case of income generation from bamboo also argue for liberalizing of forestry markets by the government. As a result of which, the farm households will not only be able to supplement their income and diversify their production but also some will eventually specialize in particular forest products. Overall, China’s case in forestry sector reform and its implication on poverty alleviation is also broadly relevant to many other Asian countries. The lesson that devolution of management requires both a stable policy environment and a freely accessible market is critical in the context of other countries like Indonesia and Philippines, whose experience is also envisaged to contribute to broader understanding of the study.