25 Forest tenure system and reform in China - Zhang Lei^[34] and Dai Guangcui^[35]

ABSTRACT

In 1981, the Chinese State Council issued its "Resolution on Issues Concerning Forest Protection and Development", also known as its "three fixes" policy, marking the beginning of forest tenure reform in China. Since then, the forestry sectors have begun to register forestlands and issued the tenure certificates which clarify the tenure of forest lands and timber. A special system and personnel for forest land register and management have been established from the central level to township level. Meanwhile, the forest tenure system has undergone reforms such as contractual agreements with farmer households, allowing forest land rights transfer and auctioning the use right of ‘four wastelands’, etc. Especially after 1998, the integrated national economic strength has been greatly enhanced and the support and help given to forestry have been strengthened. China has entered a historic transition period. The promulgation of the Law on Land Contract in Rural Areas will further lead to the decentralization of forest tenure system, farmers’ contracts with real rights, diversity of operations, resources allocation by market and will promote forestry development. This paper describes mainly the current situation of forest tenure management system in China; reviews the reform process of forest tenure and its impact; and analyses the security of tenure and prospects in the trend of policy and legislation.

THE REFORM OF THE FOREST TENURE SYSTEM

Before reform and opening to the outside world, the tenure system in China was of two kinds. One was the collective ownership operated by the people’s communes, the other was the state ownership managed by the Central Government directly and the respective local governments. Since 1978, the national economy has developed towards a market-oriented one and the tenure system reform has been taken as a core reform.

The reform of the tenure system of collective forest in rural areas

The reform of forest tenure system started in 1981 when the policy of forestry ‘three fixes’ was made. The main characteristics were that the ownership was not changed and use rights were contracted to operators.

Forestry "three fixes"-separation of ownership and use rights

The "three fixes" policy was to clarify rights to forests, with an emphasis on mountainous areas, to delimit private plots and to establish a forestry production responsibility system. It separated the ownership and use rights of forest land and trees. For clarifying rights to forests, the state-owned and collectively-owned forests or the trees owned and forest land used by individuals as well as the trees owned by other departments and units were to be recognized and assured their unchanged tenure if their tenure was clear. For delimiting private plots, the private hill plots (barren sandy land and beach land) allocated to the commune members to plant trees and grasses should be used for a long-term period. The trees planted by the commune members around their houses, on their private hill plots or in other places designated by the production brigade should be owned forever by the commune members and be inherited. For the establishment of the forestry production responsibility system, the specialized contract system, the contract system with remuneration linked to output, should be extended. The contracts should be made to household groups, households and individual workers. Based on the achievements of afforestation, reasonable payment should be carried out; extra profits from production overfulfillment should be rewarded or shared.

Private hill plots were allocated to and used by the farmer residents in forest areas for a long-term period. Farmers did not pay any fees for the land and they could, on the private hill plots, plant trees and grasses to meet their living requirements of fuelwood and forage. Farmer households could decide by themselves to plant crops on their private hill plots and could own all the products generated thereupon. The private hill plot was generally allocated per capita on average. Each household had less than 5 mu of private hill plots on average.

Responsibility hill land was the land with the contract signed between the household and the collective. Time-bound afforestation and management and tending as well were stipulated as the household obligation on the contracted land within a certain period. The "long-term" period that had not been clarified was written in the contract. For responsibility hill land, some farmer households had to pay the contract fees designated in the contracts. Most of the contracts stipulated that the households and collective could share a certain proportion of profits: for the collectively-owned forest trees and the forest trees that increased after the farmers’ contract, the proportion of profits shared by the collective and households was 2:8 or 3:7. The farmers could have large parts of the share. In some places, the households, after signing contracts, could deal with the trees by themselves. The purpose of responsibility hill land was to motivate the farmer households to raise production efficiency. The responsibility hill land was unevenly allocated and each person could have several mu, over 10 mu or even more.

By 1984, the forest property right certificates were renewed to 97 million ha of forest land by the people’s government of the county or higher administration, while more than 30 million ha of private hill plots were allocated to 56 million household farmers. The forestry responsibility system in various forms was set up for over 50 million ha of forest trees. The ownership of forests on hill land belonged to the collective and farmers signed the contracts to manage trees.

Beginning in 1984, in the southern collective forest areas, some of the private hill plots and responsibility hill lands were merged. The private hill plots were expanded, and the privately managed forest lands were formed through merging of the private hill plots and responsibility hill lands. The private hill plots, responsibility hill lands, and all or parts of the forested lands managed in a unified way by the collective were allocated to households (which was called the privately-managed forest land). According to the statistics of the China Forestry Yearbook and of the 16 sampled provinces (cities), 58.6 percent of the forested lands owned by the collective were allocated to households for management (1988, p. 536). The statistics of 8 central and southern provinces indicated that the households were managing 70.5 percent^[36] of the forest lands. Most of the forest lands were contracted to households for management (75-92 percent) in Jiangxi, Guangdong, Hubei, Zhejiang and Hunan while other provinces such as Fujian had much less forest lands contracted to households for management (32 percent) (Table 1).

Redistribution of forest land could realize two goals: welfare increase and creation of new forestry decision-makers-the individual farmer households who were very important to the sustainable forestry development. With power in the hands of farmers, the government would find it very difficult to have its policies executed if these polices were not prepared in line with the needs and interests of these farmers. With the use rights and management rights griped in hand, the farmer households had the opportunity of expressing their wishes to a certain proposed project (Xu et al. 2001).

Table 1. The contracted forest lands in the southern collective forest areas (1986)

Sources:Xu et al. (2001), China Forestry Yearbook (1986).
*1982 data.
** Private hill plot and responsibility hill land included.

Transfer of the young and middle-aged plantations-forest tree ownership

After the forest trees on hill land were allocated to the households, some forest farmers wanted to transfer the young and middle-aged plantations in their hands to others due to uncertainty of stable income in the future, urgent need of funds, or anxiousness of changes in forestry policy. In the mean time, some investors or other people who became rich earlier needed to seek market or enlarged investments, and some enterprises wanted to purchase forest land to build new raw material production bases. Therefore, in the middle of 1980s, the transfer of the young and middle-aged plantations occurred. With further reform and opening to the outside world and the establishment of socialist market economy system, the transfer of standing trees became very active and the market of forest tenure rights was gradually formed.

The transactions of the standing trees included mainly the felling rights auction of mature and overmature forests, the management of bamboo forests and economic forests on lease and the transfer of the young and middle-aged plantations, etc. The transfer of tenure of the young and middle-aged plantations was in two forms: the transfer of forest tree ownership (auction) and transfer of the occupation and use rights (being converted into shares) of the young and middle-aged plantations.

When the young and middle-aged plantations entered the market, the maximum result was to reduce the market risk of the forest tree owners. The available case studies indicated that half of the transferors were individual households who had very limited capabilities of resisting risks. The transfer of the young and middleaged plantations was very helpful for farmer households to reduce their losses from the market risks and could increase the expected income from their land. For local governments, the appearance of privately-owned forests could increase forest cover, forest standing stock volume and improve ecological environment.

Transfer of the forest land-use rights and auction of the ‘four wastelands’^[37]

The forest land used by farmers was allocated generally by the collective on per capita basis, which had caused the fragmentation of forest land, led to the phenomenon of "one mountainous forest site with numerous owners" or "one owner with many mountainous plots" and brought about the inconvenience for farmer households to manage forests. At the same time, due to the different production abilities of individual forest farmers, some farmers found themselves unable to manage their forest land while other capable units and individuals could not have forest lands, resulting in the waste of forest land resources. With the further reform of the forestry economics, this unreasonable forest land allocation method could not meet the requirements of forestry development. Therefore, the paid use and circulation of forest land in various forms appeared and forest land tenure rights as the special commodity began to enter the market for trade and competition.

The forms of transfer of forest land use rights included mainly the followings (Zhang et al. 2000):

• The transfer of forest land on lease denoted the transfer of forest land-use rights and management rights for a certain period of time by rent payment or profit sharing. This form was mostly adopted when the collective forest land was contracted to farmer households on lease in afforestation projects, or when the collective forest farms expanded their afforestation operations through renting the adjacent lands of farmers, or when private entrepreneurs rented the village collective land or the forest land of collective forest farms for development of economic forests or timber plantations, or when the forest land was rented to introduce foreign businessmen to establish plantations.

• Auction of ‘four wastelands’ suitable for afforestation denoted the form of once payment only for the development of four waste- or barren lands. The auction of four wastelands was restricted within the range of the barren lands suitable for afforestation that were owned by the collectives and were not contracted to households. The auction was made through agreements negotiated or public biding to units or individuals that had operational abilities of fund and labour input for forestry development. The collective for auction withdrew some responsibility hill lands and private hill plots allocated to farmers who had failed to fulfill their afforestation responsibilities by the agreed time. Private hill plots and responsibility hill lands allocated to farmer households by contract free of charge were auctioned for paid management.

  The auction of barren lands was an effective way to raise the overall efficiency of land use. In some places, the land use was very inefficient because there remained large areas of barren land after the decentralization of forest land management. The local government and collective organizations withdrew the barren lands for auction to reach the goals: one was to increase the income of the collectives, the other was to raise land productivity. This redistribution of land led to the development of one-third to one-half of barren lands. The auction brought about relevant income and at the same time raised the land-use efficiency (Ministry of Forestry 1994).

• Cooperative management denoted that the partners jointly processed the forest land-use rights. The forest land tenure remained unchanged and partners enjoyed the profit rights through joint management of the forests. The core was the joint management of forests. This form is now mainly adopted, in the shareholding cooperative forest farms in the southern collective forest area. The specific measures were that each cooperative partner’s input such as land, technology, labour and fund was converted into shares for dividend division. This form was adopted in Guangdong Province when many oversea funds were introduced for afforestation programmes. Other cases included the joint management for profit sharing between the state-owned forest farms and their neighbouring townships or villages. The forest farms invested funds and technology as their share and the townships and villages invested land and labour as their share. The management was conducted jointly and the profit was divided in proportion. Among the cooperative management forms, the profit of forest land, based on the quality of site condition, comprised generally 20-50 percent of the total profit.

• The transfer of the young and middle-aged plantations denoted that most of the transferors were the village collectives and a very few individual forest farmers while the transferees were the state-owned forest farms or forestry departments that would purchase the plantations for management or for establishing forest farms. During the transfer, the forest land-use rights were transferred together with the transfer of forest trees within the agreed management period specified in the contract. Other specifications such as the duration of forest land use and the ways of returning land were also written in the contract.

• Others included the biding on harvesting mature forests, transfer of economic forests and fruit orchards, loan on mortgage and guarantee of forest land, debt repayment with forest land-use rights, intercropping of forest land on lease, etc. The forms relating to the paid use of forest land occurred continuously.

At the early stage of the collective reform in rural areas, since the relevant management instruments of the government did not keep pace with it, the forest land and forest trees were just contracted to farmer households. And when the government opened the timber market, the price of timber increased ten times of that before so that large areas of forests were harvested. With the official implementation of the Forest Law in 1985, the government in 1987 took some guided measures, enhanced the strength of afforestation, insisted on the stabilization and unchanged policy of forestry contract and responsibility system. The situation of forestry turned to be better and the steps of forestry development became very fast (see Figures 1 and 2).

Figure 1. Changes in forest area by regions, 1983-1998

Figure 2. Changes in forest volume by regions, 1983-1998

THE REFORM OF TENURE RIGHTS OF THE STATE-OWNED FORESTS

There were two components of the state-owned forests: one part of the forests was in the state-owned natural forest areas and was concentrated in large areas mainly in the northeast (Heilongjiang and Jilin Provinces, and Inner Mongolia Autonomous Region), southwest (Sichuan and Yunnan Provinces) and northwest (Shaanxi Province and Xinjiang Autonomous Region, Gansu and Qinghai Provinces); the other part of the forests was the state-owned forest farms and nurseries set up with the investment of the government in the large, concentrated and barren mountainous areas or in sparse forest areas in all provinces. Since the founding of new China, the state-owned forests with very good resources have been the major suppliers of logs in large diameters. At the same time, the state-owned forests had very important ecological positions since they were mainly located at the source of rivers. However, during the last 20 years, the state-owned forest resources decreased sharply. The timber production, accounting for 63 percent of the national timber production at the early stage of the founding of new China, decreased to nearly 30 percent at present. According to the results obtained from the fourth national forest resource inventory (1989-1993), in the northeast state-owned forest areas, 277 000 ha of the forest area and 17.79 million ha of standing stock volume decreased annually, and half of the forest resources that could be harvested decreased. Among 82 forestry bureaus, 31 had no forests to be harvested (Liu 1996). The direct reason of exhausted resources was overcutting of forests. In the state-owned forest areas, the overcutting of forests was annually 20 million cubic meters (Liu 1999). By the year 2000, the resources in 90 forestry bureaus among 135 state-owned forestry bureaus were exhausted (Zhang 1998).

At the same time, the economy in the state-owned forest areas relied on the timber production. The reduction of forest resources led to an economic crisis. Taking Yichun City, which was a major timber production area in the past, as an example, the timber harvest was 7.5 million cubic meters in 1959 and it had 160 000 working staff. In 1996, the total number of working staff reached 544 000 people and timber harvest was reduced to 2.4 million cubic meters. The direct results was an economic crisis involving the forest enterprises. The Tongbei Forestry Bureau directly under the leadership of the Song Huajiang Forestry Management Bureau was in arrears with wage payment of the working staff for 48 months by the end of 1998 (Chinese Society of Forest Economists Survey Team 1998). The economic crisis had caused negative impacts on education. In the Tongbei Forestry Bureau, 60-70 percent of students dropped out of junior and high schools. In Daxing’anling forest area which was a former major timber production area, since 1994 75 percent of the working staff (about 146 000 people) could not get their wages on time (Dai and Zheng 1998). The crises of forest resources and economy in the state-owned forest areas were the motivating power for the reform of tenure rights of the state-owned forests.

The management and attending responsibility system

The first state forest bureau to explore tenure reform was the Shanghulai Division of Taoshan Forestry Bureau in Heilongjiang Province. In 1983, the Shanghulai Division sought to contract out forest use rights to promote forest investment by forest workers. Every worker was awarded an area of land to grow trees. In additional to the regular salary, workers received an annual bonus for each tree alive beyond the 80 percent survival rate. This simple reform transformed the stagnant afforestation work in the Division. Survival rates of planted trees reached 90 percent in the following five years. Since then, this reform has been repeated successively in other forest areas of Heilongjiang Province. For example, the Sandaotong Division of Fangzheng Forestry Bureau (also in Heilongjiang Province) in 1985 adopted similar schemes. It insisted on the reform for 15 years and has achieved remarkable results.

In 1998, the start of the Natural Forest Protection Programme became a turning point in the management of forests in the state-owned forest areas. In many places, the timber production was greatly reduced. Large areas of natural forests became public welfare forests that provided the environmental services, which made many forestry bureaus search for new ways of forest management. The management and attending responsibility system had become the efficient ways of ensuring the smooth implementation of the Natural Forest Protection Programme in the General Bureau Forest Industry of Heilongjiang Province. The measures taken were that the state-owned forests were contracted out to individual working staff (small parts of the forests were contracted to other local residents) based on the unchanged nature of the state-owned forests and the final use of forest land. Besides the afforestation, maintenance and management, and contracting out the afforestation tasks given by the government, the working staff could, within their contracted areas, manage and harvest the resources under forests, develop livestock breeding and plant economic crops. During their leisure time, they could arrange to do something else such as to work in cities or engage in other business activities.

The management and attending responsibility system has played the following roles:

• It has increased forest cover and standing stock volume and motivated the initiatives of forestry workers to participate in the management of forest resources. The Sangdaotong Forest Farm of Fangzheng Forest Bureau, starting from 1984, insisted on, for 15 years, the implementation of the management and attending responsibility system of forest resources. The survival rate of plantations was from nearly zero to the present 97 percent and forest cover increased from 18 to 80 percent.

• It has opened up the income channels for local forest workers and increased their incomes. The incomes of local forest workers from the non-wood products sector have increased six times compared with those before.

• It has promoted the participation of local communities and ensured the security of resources. The farmers who lived around forests have the rights of contracting out forests. The local residents can participate in the management of forest resources, which has greatly reduced the illegal harvesting of forests and is beneficial to negotiating and resolving the benefit conflicts between the local communities and the government.

STATUS QUO OF MANAGEMENT SYSTEM OF FOREST TENURE RIGHTS IN CHINA

Status quo of forest resources

According to the statistics of the fifth national forest resource inventory in China (1994-1998) (the data were from the fifth national forest resource inventory), the land areas for forestry use is 263.29 million ha, of which, the forest area is 158.94 million ha. The forest cover in the whole country is 16.55 percent, the total standing stock volume is 12 487.86 million m³ and forest stock volume is 11 266.59 million m³.

The forest resources in China, according to the tenure, are either the state-owned forests or collectivelyowned forests (forestry in rural areas). The collectively-owned forests take up half of the forests in China (see Table 2). The state-owned forest area is 63.89 million ha and the collectively owned forest area is 89.75 million ha, taking up respectively 41.6 percent and 58.4 percent of the total forested area of the country. The stateowned standing stock volume is 7641.00 million m³ and the collectively-owned standing stock volume is 3 665.38 million m³, accounting for respectively 67.6 percent and 32.4 percent of the total standing stock volume of the country. Among 20.22 million ha of economic forests of the country, the state-owned and collectivelyowned economic forests take up 7.9 percent and 92.1 percent respectively. Among 4.21 million ha of bamboo forests of the country, the state-owned and collectively-owned bamboo forests take up 6.8 percent and 93.2 percent respectively. Among 29.14 million ha of plantations of the country, the state-owned and collectively owned account for 26.4 percent and 73.6 percent respectively. Of course, 70 percent of the collective-owned forests have been contracted out to households. The tenure of forest land belongs to the collective, but most of the forest resources are owned by farmer households.

Table 2. Forest resources according to tenure (1994-1998)

Note: The data in the table do not include Taiwan and the parts beyond the control lines of Tibet.

The protection of tenure of forests, forest trees and forest land

In practice, the management of tenure relies on the forest land. It is very difficult to separate the management of tenure of forest trees and forest land. The tenure management is a very important system of China’s forestry. The core of the tenure management is that the government works out the tenure policy, identifies registration and announces it. The law stipulates the relevant legal procedures. The form of forest tenure certificate has been legalized and worked out by the forestry competent authority of the State Council and those made by other sectors are illegal.

Stipulation of tenure of forests, forest trees and forest land

In accordance with the stipulations of the Constitution and the Forest Law, the ownership of forests, forest trees and forest land is in three forms:

• The state ownership. It is stipulated in the Constitution that "the natural resources including mines, rivers, forests, mountains, grasslands, barren lands, beach and shoal lands, etc. are owned by the state, namely they are owned by the whole people, except the collectively-owned forests, mountains, grasslands, barren lands, beach and shoal lands that are stipulated by the law". The Forest Law stipulates that "the forest resources are owned by the state except the collectively-owned forest resources stipulated by the law".

• The collective ownership. It includes: (i) the forests, forest trees and forest land that were allocated to farmers according to the Land Reform Law of the People’s Republic of China (1951), then transformed to the collectively-owned property during the period of the agriculture cooperative movement; (ii) the forest trees planted and cultivated on the collective-owned land by the farmers who were organized by the rural collective economic organizations; (iii) the forest trees including the protection forests along highways, railways and river-sides that were established on the state-owned land with the cooperative efforts made between the collective and other state-owned units such as the state-owned forest farms and logging and silvicultural farms and other collective-owned forest trees specified in the contracts; (iv) the forests, forest trees and forest land defined as the property of the collective economic organizations during the period of the "four fixes"^[38] in 1960; (v) during the period of the "three fixes" in 1981 and in some areas, the forests, forest trees and forest lands that were formerly owned by the state, then transferred to the rural collective economic organizations that had the forest tenure certificate issued by the local people’s governments.

• The ownership of individual forest trees. It includes (i) the forest trees planted around the houses of rural residents, on their private plots, on their private hill plots and on the other land areas identified by the rural collective economic organizations; (ii) the trees planted on the forest land and on barren hill, barren land and beach land with the use rights obtained through contract or other legal ways, the trees owned by individuals according to contract and the trees planted in the courtyard owned by city residents.

• The forest trees and the forests land-use rights owned by farmer individuals, enterprises, legal persons and other individuals and organizations.

PROTECTION MEASURES OF TENURE RIGHTS

Registration and issuance of certification

The Land Law stipulates that "the determination of the ownership and use rights of the forest land and grassland will follow the relevant rules and regulations of the Forest Law, the Grassland Law and the Fishery Law". The Forest Law stipulates that the state-owned and collective-owned forests, forest trees and forest land, the forest trees owned and the forest lands used by individuals should be registered and the certificate should be issued by the local people’s government at the county level or above to confirm the ownership and use rights. The registration procedures were stipulated as follows:

• The units that use the forests, forest trees and forest lands of the state-owned key forest areas (hereinafter called key forest areas in abbreviation) that are determined by the State Council should be registered and the forest tenure certificate should be issued by the forestry competent authority of the State Council. The units and individuals that use the state-owned forests, forest trees and forest lands in transadministrative areas should be registered and the forest tenure certificate should be issued by the people’s government in common at the higher level. The units and individuals that use the other state-owned forests, forest trees and forest lands should be registered and the forest tenure certificate should be issued by the local people’s government at the county level or above. The state-owned forests, forest trees and forest lands with the undetermined use rights should be registered, protected and managed by the people’s government at the county level or above.

• The collective-owned forests, forest trees and forest lands should be registered and the forest tenure certificate should be issued by the people’s government of the county.

• The forest trees owned by the units and individuals should be registered and the forest property right certificate should be issued by the people’s government of the county.

• The units and individuals that use the collective-owned forests, forest trees and forest lands should be registered and the forest tenure certificate should be issued by the people’s government of the county.

Registration procedures should be undertaken according to the stipulations of laws if the ownership and the use rights of forests, forest trees and forest lands are changed. In 2000, the State Forestry Administration issued officially "the Administration Measures of Tenure Rights Registration of Forest Trees and Forest Land" and it indicated that forest tenure certificate in a unified form was issued in the whole country. In the same year, the issuance of forest tenure certificate was basically completed in the forest industrial enterprises of the key state-owned forest areas. At the same time, the pilot work on the forest tenure registration was carried out in each province (autonomous region and municipality). Based on the pilot work done in some provinces and municipalities including Liaoning and Beijing, the forest tenure certificate in a unified form was issued overall. By the end of 2000, the forest tenure certificates were issued for 221 million hectares of forest land in the whole country, taking up 86 percent of the total forest land areas. At present, the work of registration and issuance of the forest tenure certificate based on the pilot work is being undertaken gradually in all provinces. Due to the complicated and different situations in different areas, it is very difficult to conduct the statistical work but people are conducting some statistical work on its latest progress. With the implementation of the six major forestry development programmes such as the Conversion of Cropland into Forest Programme, the governments at various levels are making efforts to register and issue forest tenure certificate at the same time.

Mediating and dealing with the disputes in forest tenure rights

The forest tenure certificate acquired through the above-mentioned legal procedures is the only legal tenure certificate of forests, forest trees and forest land. The person who owns the forest tenure certificate can fight against the infringement act of other persons and can be protected by the law through administrative and judicial procedures. The Forest Law stipulates that the disputes occurring between units regarding the ownership and use rights of forest trees and forest land should be dealt with according to the law by the people’s government at the county level or above; the disputes occurring between individuals and between individuals and units regarding the ownership of forest trees and use rights of forest land should be dealt with according to the law by the people’s government at the county or township levels.

Transferability of forests

Transferability was introduced in an effort to ensure an efficient allocation of forest resources and low-cost production. After the "three fixes", 70 percent of forest lands were allocated administratively to households on a per capita basis. Transferability permits farmers to recontract their forest parcels to more productive entities and also encourages greater efficiency by reversing forest fragmentation associated with decollectivization. This has been particularly important where small plots have been uneconomic and where land is degraded or remote. For instance, in Xiuning County of Anhui Province, farmers have been allocated more than 10 plots of forest land, ranging from 0.03 to 0.2 ha. Unless plots can be consolidated, the cost of plantation, harvesting and management will exceed any likely revenue (Kong et al. 1998). However, the measures used before the reform cannot be used for promoting the management on a large scale because the withdrawal of the forest land by the collectives for management will cause the loss of reputation of the government and a negative impact on the long-term forestry development. In addition, China has 267 million ha of forest land, among which, nearly half are land without trees. It needs to vitalize the use rights of forest land, introduce the market mechanism and absorb the inputs of funds and other production elements from all walks of life and speed up the greening steps. The Forest Law newly promulgated in 1998 stipulates clearly that: the use rights of forest land include the timber forest, economic forest, fuelwood forest, logged area and fire slash area, which can be converted into shares, funds for joint venture, cooperative and management of forest trees and can be conditions for cooperation. The practice shows that this undertaking has achieved a remarkable result. For example, in Lushan County of Sichuan Province, before the implementation of forest land transfer, the investment made by the government was over RMB100 000 yuan to RMB200 000 yuan each year. After the transfer, Mr. Gao, a farmer, had an annual fund input of over RMB3 million yuan. In the year before the transfer, 660 ha of trees were planted in Lushan County. After the transfer, the plantation area had reached 2000 ha annually, an increase of several times of that before. The quality of plantations is also very high. The transfer of forests, forest trees and forest land is beneficial to making the silvicultural period short and decentralizing the management risks.

ANALYSIS ON THE SECURITY OF FOREST TENURE

The Chinese Government, with the reform of tenure as the linkage, has made efforts to promote the process of marketing and has achieved remarkable results. However, during the reform, some unavoidable problems and shortcomings have occurred. For the forest tenure system, the major insecurities are as follows:

Insecurity factors of the registration of forest tenure

The legal demarcation of the forest tenure conception in China is clear, i.e. the state and collective have the ownership of forest land, the individuals can have the use rights of forest land according to legal stipulations, and the state, collective and individuals can have the ownership of forest trees. However, in practice, many problems do exist relating to the security of forest tenure. The registration of forest tenure is one of the insecurity factors.

Since the implementation of forestry’s "three fixes" policy in 1981, especially after the official promulgation and implementation of the Forest Law in 1984, the registration of forest land and issuance of forest tenure certificate have been carried out in most areas of China. After 20 years, at present, the one-fifth to one-fourth contracted-out forest land and trees are not registered and the forest tenure certificates are not issued, which have caused the unclear tenure of land. Farmers have no initiatives of management.

Though the forest tenure certificates were given to households, due to the careless work done in the "three fixes" period, the specific and detailed items in the certificate were not clearly written and in some certificates, the four boundaries (including east, west, south and north) were indefinite. The real and recorded land areas were not matched and there were no legal documents. For example, there was no official seal of the government affixed on the certificate and no registration date put on the certificate. When an infringement act occurred, the court of justice had difficulties to adjudicate the case. The land disputes occurred frequently.

The registration of land was not standardized. The complete registration of land included the general registration of land, regular registration, registration of other rights, transfer registration, registration of changes, etc. However, in China, the registration of forest land which was conducted only once (1981-1983), was not standardized and had no other relevant registrations. Some certificates were not stored as important legal documents and not put into files. When disputes occurred or some changes needed to be done, people could not find the files. At the same time, the registration of changes was not made in time according to the practical conditions.

Incomplete forest tenure

After the collective forest was contracted out to households in China, farmers obtained the forest tenure certificates. However, in practice, the rights owned by farmers are incomplete, which shows the uncertainty of their rights.

Lack of real rights protection

In some places, the responsible hill lands allocated to households were not generally contracted, or the specifications on the contracting duration and payment conditions were not written in the contract. The contracts may only contain partial profit rights but do not contain the transfer rights and management decision-making rights. The forest land contracted out to farmers has no real rights protection. At present, the collective forest land contract protects the creditor’s rights but there is no assured protection for the real rights; thereby it is not viable to fight against the third party. The farmers’ rights and benefits including inheritance and mortgage after the afforestation according to the contract are left unprotected and farmers cannot feel secure. The private hill plots can contain the management rights of farmers and can be used for a long period of time, be inherited but not be transferred, which means that the farmers have no rights of disposition. The incomplete, unclear and weak legal protection and some artificial factors have caused the frequent occurrences of forest tenure disputes. The Forest Policy and Legislation Department investigates and deals with plenty of forest tenure disputes each year, which means a high transaction cost for the responsible departments to maintain the current tenure system (for example, a lot of human and financial resource inputs are annually needed to deal with the illegal occupancy of forest land and forest tenure disputes). The situation of the tenure of forest trees and lands in the southern collective forest areas from 1993 to 1996 is shown in Table 3.

Table 3. Forest tenure disputes in the southern collective forest areas (1993-1996)

Source: Chinese Forestry Yearbook, China Forestry Press, 1993-1996.

Limitation of the restrictive harvesting quota scheme

Timber harvesting in China has been licensed first and conducted according to the annual allowable cutting quota. However, there have been many unreasonable aspects regarding the current harvesting quota scheme concerning various conditions. During the implementation of the scheme, the government, according to the macro-calculation and measuring, approves the annual allowable cutting quota. The manager is allowed to fell the forests according to the approved felling quota. With this, the fundamental problem is to let the farmers managing the forests or other legal persons receive passively the multi-layers of management. The forestry managers, with the aim of obtaining the maximum profits, according to the requirements of the government, cannot make the prediction and calculation on the reasonable arrangement for forestry production, investment into production and profit output. They cannot even take the relevant measures according to market changes. In addition, the stipulation of felling rotation is not reasonable. For example, in Hainan Province, the rotation of Eucalyptus is 6 years but the official rotation stipulation is 15-20 years, which not only prolongs the investment recovery but also increases the cost of forest tending and maintenance (Zhang et al. 2002). Besides, if the plantation established is shelterbelt protection forest or special purpose forest that cannot be felled, it means that the farmer has "no" profit rights and there is no subsidy given to the farmer by the government. For example, the government has invested a large amount of funds to establish plantations in large areas on the collective forest land and has not defined the property rights of forest trees. In the implementation of the Shelterbelt Development Programme along the middle and upper reaches of the Yangtze River, the collectively owned land in large areas has been used for afforestation. Now some timber plantations need thinning while some economic trees are producing products, but there have been no definite stipulations regarding who and how to get benefits (Zhao 2000).

The unreasonable profit distribution mechanism

Currently, the timber production taxation and fees are very heavy for the forest farmers. Apart from the various national taxes and fees, numerous local taxation payments are levied on farmers according to the local needs. It was found in Zhang’s survey in Qiongshan City of Hainan Province that the selling price of horsetail beefwood (Casuarinas equisetifolia) as a plantation timber by the local farmers was RMB230 yuan per tonne while the required nine kinds of taxation amounted to RMB110.66 yuan per tonne. With the deduction of felling and vehicle loading cost of RMB50 yuan and transportation cost RMB50 yuan, the actual income of the farmer was only RMB19.34 yuan per tonne, or 8.4 percent of the timber selling price. In other places, the recovered fund of the farmer comprised only about 5 percent of the timber selling price, making even the simple reproduction difficult (Su 2001).

The monopoly market of timber

At present, in the collective forest areas, the forestry sector remains the only site purchaser of timber. This administrative intervention is helpful to maintain timber trade order but obstructs the direct connection between the producer and market, and affects the profit rights and disposition rights of the owner.

The duration of the use rights of the contracted-out forest land

The duration of the tenure refers to the validity period of given rights that must ensure the owners’ rights of the collective forest to recover the full investment made from the generated revenue of the forest. The rotation of forestry production is very long with slow profit output. For example, one rotation of a fast-growing and high-yielding forest is 10-20 years and normally timber production needs tens of years or a hundred years before the final harvesting. Therefore, the duration of contract needs to be longer especially in areas with poor site conditions or in remote areas that require relevant higher inputs and in areas far away from the market that need high transportation costs. It requires a longer use-rights period in order to ensure the manager’s profits. At present, the duration of the collective forest tenure varies from place to place, ranging from 10 to 100 years and it is not standardized. The duration of the contract is very short, or no legal stipulations are made for it, which is not beneficial to the forestry management.

Instability of the forest tenure policy

The policy of forest tenure is changeable, which has brought about many insecure factors to the forest tenure. Firstly, in 1987, the local government, in some places, withdrew the use rights of contracted-out forest land to stop illegal felling. For example, in Jiangshan City of Zhejiang Province, in 1988, after readjustment of the tenure rights of land, the area of responsibility hill lands dropped to 20 percent (Forestry Department of Zhejiang Province 1988). In Hubei Province, the area of private hill plots decreased from 5.7 million to 4.7 million ha, a decrease of 18 percent. These practices have caused the instability of the tenure. Secondly, the population has increased greatly (a crucial factor). The forest lands allocated to households are calculated and based on the number of family members, which is a common method adopted for the rural resource distribution. Because of the changes of family size and number of households, the local government has decided to withdraw the forest land for redistribution. Thirdly, the different government departments have taken different land-use policies, which has led to a confusion of tenure. Some relevant departments propel the auction of "four barren lands", force farmers to buy the use rights for which tenure certificates have been already issued and to be issued again the land-use certificates. Some departments encourage farmers to plant economic crops on the land and then they issue the management rights certificates, which have caused a mountain-load of certificates. In some places, the local government, in the name of development or greening barren mountainous lands, carries out the auction of parts of the collective barren lands that are already contracted out to households in order to speed up the afforestation. The barren land, in the concept of silviculture, is grassland and has the functions of producing fuelwood and grazing. The use rights of barren land have been changed after the establishment of plantations, which has caused the loss of important living resources to the farmers in the local communities. The farmers’ traditional rights have been infringed upon (Liang 1999), which has become a new blasting fuse of social conflicts. Fourthly, the natural forest resource protection policies of the government adopted in 1998 in the provinces (autonomous regions) along the upper reaches of the Yangtze River have jeopardized the collective forest tenure. The Natural Forest Protection Programme along the middle and upper reaches of the Yangtze River and Yellow River has covered some collective forests. However, currently the government is only giving compensations to the state-owned forest industrial enterprises which suffered from the natural forest logging ban and it does not give compensations for the economic losses caused by the collective forest logging ban.

Reform of forest tenure rights system in China

The Law of Land Contracting in Rural Areas that is newly promulgated and the Decision to Expedite Forestry Development (the Decision in short) that will be promulgated will resolve the real rights problem for the land-use rights and consummate the forestry tenure system. Farmers can obtain the contracted land by way of creditor’s rights and be endowed with relevant powers and functions of the real rights. The land ownership system will not be changed and the tenure will be managed and transferred by the farmers themselves in order to reach the goals of optimizing the resource allocation and raising the management efficiency. In the mean time, favoured policies should be strengthened to support and ensure the forestry development.

Improving the forest tenure scheme

The Decision definitely stipulates: The property of the tenure owners needs to be protected absolutely in accordance with the law; if the ownership is explicit and tenure certificates of forest have been released, the legal force of the tenure certificates needs to be maintained; if the ownership is explicit but tenure certificates of forest have not been released, the tenure certificates need to be released as soon as possible; if the ownership is not explicit or causing some controversy, the ownership needs to be clarified, the controversy needs to be mediated and the tenure certificates of forest need to be released as soon as possible. After converting the cropland to forest, relative procedures need to be transacted as soon as possible, according to the law. The farmer households can use freely the private hill plots which have been designated, and the private hill plots cannot be taken back compulsively. All forest in the private hill plots belongs to the farmer households. For responsibility hill plots, which have been contracted, their contract relationship needs to be kept stable.

Setting up and perfecting the registration system of forest tenure

According to the requirements of real rights, the registration of contracted management rights and the use rights of forest land must be improved and perfected. In the light of the practical situation in China, the registration system with the combination of the registration of use rights and contract management must be carried out. The system of the general registration of land, day-to-day registration, registration of other rights, designated registration, transfer registration, registration of changes, registration of dying out, registration of altering and elimination, registration of entrusting, registration of prediction, registration of objection and temporary registration must be improved and perfected. The system of relevant judicial protection must be set up. At the same time, the enforcement of laws and legislations must be strengthened, the forest tenure certificate must be reissued according to the law in order to ensure the security of the tenure of forest land.

Prolonging the forest land contract period to pacify the forest managers

Based on the stabilization of the forest land ownership, the duration of forest land use in combination with the improvement of the forestry production responsibility system must be extended so that the managers have a longer contracting period compared with that of agriculture.

Reforming and perfecting the timber harvesting quota scheme

The Decision proposes that public beneficial forests and commercial forests will take different modes for resource management. On the premise of the total volume control, the timber harvesting quota must be flexibly managed and the annual plan adjustment be improved continuously. The reasonable felling and regeneration methods need to be strengthened. Under the strict control of forest resource consumption, the forest producers and managers must be allowed to have relevant autonomy so that they can contribute to the balance of forest resource increment and consumption by caring for their own long-term benefits with higher motivation and vigour in their forest production. People can see that the timber harvesting quota scheme is one important manifestation of incomplete forest tenure, which has caused serious constraints to forestry development. It is also an important factor affecting the initiatives of the forest farmers in forest areas and other private forestry investment and management, resulting in the degradation of forest stand quality and the severe loss of the forest land.

Reducing the taxation burden of the forest managers

The Decision proposes that the special agricultural tax on logging and bamboo harvesting will be cancelled gradually as the rural taxation reform proceeds. And the other unreasonable charges to farmers and forest producers will also be cancelled in order to guarantee the profit rights of the stakeholders and arouse the enthusiasm of the managers.

Accelerating the implementation of the forest ecological benefit compensation fund scheme

The Decision prescribes that the government should give reasonable compensations to the investors on the forests that are converted into public beneficial forests in order to ensure relevant profit rights and disposition rights of the managers of the forests for public welfare. The forests on the private hill plots, responsibility hill lands and the contracted-out lands that are classified as ecological forests should be compensated by the forest ecological benefit compensation fund. The policy of the classified forestry management must be continuously studied and carried out. The government is only responsible for the management of the forests and forest areas that are very important for national ecological security (for example, the sources of rivers, the important areas for the protection of biodiversities and important landscape areas). For the commercial forests, when the funds invested into the collective forests by the government are taken back and other rights have been compensated, the timber production and management must be opened up. The market must be afforded to play its role so that the forestry investors can obtain higher and comparative profits, which will lay a better foundation for sustainable forestry management.

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