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 Liaoning Hebei Shandong Shanxi Shaanxi Henan Jiangsu Zhejiang Fujian Guangdong Guangxi Yunnan Guizhou Sichuan Hunan Hubei Anhui Jiangxi Hainan Qinghai Tibet Xinjiang Gansu Inner Mongolia Taiwan Ningxia Beijing Tianjin Shanghai

Tibet and Taiwan

South Collective Forests

State Forests

Provinces with Few Forests

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

• vince

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

• ning

ng 5 15 15 30 30 300 300 2007.5 07.5-6 Shand ndong

• ng

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

.05 .1 .15 1920 1940 1960 1980 2000 yrhhmngt

kernel = epanechnikov, bandwidth = 1.2146

Kernel density estimate

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, group tenure 0.171 0.013 0.279 0.014 0.136 0.036 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 years, 2=Yes, 1=Uncertain, 0=No 1.898 0.008 1.934 0.010 1.892 0.008 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

Bundle of perceived land rights

Fujian Jiang Xi Yunnan Type of land right Mean St.Err. Mean St.Err. Mean St.Err. Right to convert forest land to cropland 0.493 0.012 0.528 0.016 0.548 0.010 Right to change forest type 0.811 0.009 0.826 0.012 0.821 0.007 Right to decide tree species 0.845 0.008 0.856 0.011 0.845 0.007 Right to intercrop trees and agric. crops 0.960 0.004 0.914 0.009 0.945 0.004 Right to abandon forest 0.669 0.007 0.826 0.008 0.840 0.005 Right to transfer plot to other villagers 0.751 0.010 0.740 0.014 0.659 0.009 Right to transfer plot to outsiders 0.634 0.011 0.724 0.014 0.590 0.009 Property rights index (sum of rights scores) 5.177 0.041 5.438 0.061 5.255 0.036 Right=1 if yes, Right=0.5 if yes, but requires village approval, Right=0 if no.

Forest land allocation models

Variables Total area

• f forest

plots Total area

• f forest

plots Forest area after 2000 Forest area after 2000 Household size in 2000 5.554*** 5.435*** 1.158 1.226 (1.770) (1.770) (2.720) (2.710) Jiang Xi province 31.989** 28.338*

• 57.579**
• 44.641*

(14.900) (14.990) (24.630) (24.530) New Forest Tenure Reform started 169.622** 180.437** 87.267 102.308 Dummy (74.000) (72.770) (98.950) (95.660) Forest land per capita in village 1.949**** 1.839**** 0.628 0.558 (0.260) (0.260) (0.410) (0.400) Member of communist party or not 18.756** 18.944** 21.125* 21.309* Dummy (8.120) (8.100) (12.180) (12.150) Number of land adjustments in village

• 10.660**
• 2.096

(4.970) (7.900) Number of village leaders since 1990 3.852 20.375**** (3.900) (6.180) Prob > chi2 0.000 0.000 0.062 0.007 Number of observations 1795 1795 1795 1795 Left-censored observations 217 217 1262 1262

Standard errors in parentheses. * Significant at 10%; ** significant at 5%; *** significant at 1%, **** significant at 0.1%. Models with village random effects.

Factors correlated with tenure security: Household random effects and fixed effects models with rights index vs. disaggregated rights variables

Variables Dependent variable: Household still owns plot after 5 years RE FE RE FE Irrigation dummy 0.049 0.101* 0.051 0.107** (0.030) (0.050) (0.030) (0.050) Distance to home

• 0.010
• 0.013*
• 0.011
• 0.014**

(0.010) (0.010) (0.010) (0.010) Has certificate for plot 0.054*** 0.062*** 0.055*** 0.062*** (0.020) (0.020) (0.020) (0.020) Rights index 0.031**** 0.031**** (sum of rights score) (0.010) (0.010) Right to intercrop trees and agric. crops 0.122** 0.036 (0.060) (0.070) Right to transfer plot to other villagers 0.125** 0.168* (0.060) (0.100) Number of village leaders

• 0.010*
• 0.009

since 1990 (0.010) (0.010) Start year of current village

• 0.007****
• 0.007****

leader (0.000) (0.000) Yunnan province

• 0.034*
• 0.023

(0.020) (0.020) Constant 11.787****

• 3.564

12.314****

• 3.815

(3.390) (3.470) (3.290) (3.360) Prob > chi2 0.000 0.001 0.000 0.001 Number of observations 4706 4706 4706 4706

Conclusions

• Individual household property rights to forest

land are gradually being strengthened in China, also for forest land

• The equity principle no longer dominates forest

land allocation

• Democratic elections seem to enhance

privatization of forest land

• Provision of forest tenure ceritificates enhances

household tenure security beyond what the perceived land rights do (only 14% of the forest plots in the sample had such certificates)