Alternative Forestland Use
Attributes
Medium: Land
Country: China
Analytical Framework(s): Other
Study Date: 2001
Publication Date: 2001
Major Result(s)
Study Note: This study has demonstrated that natural forestland area and plantation forests react differently to economic and institutional factors explaining their development over time. Therefore, studies explaining the development of aggregated forestland area may give misleading results and also their policy implications could be questioned. According to our results, higher timber prices have promoted clearing of rainforests in Hainan. In contrast, higher timber prices seem to have been an incentive to investment into forestry and have had a positive effect on the expansion of plantations in Hainan. The conflict between agricultural and forestry land seems to be less serious than the conflict between tropical crops and forest plantations.
Study Details
Summary: This paper addresses the effects of economic, demographic and institutional factors on land allocation between forestry and other uses. A panel data set from Hainan Island in China and a generalized least squares estimation method, allowing individual effects for counties, are applied. The results indicate that higher timber prices have led to acceleration in rainforest exploitation, but encouraged forest investment in plantation forests. Population growth is the driving force behind the loss of natural forests, but is positively related to plantation forests. De-collectivization seems to have promoted plantation forests, but have not saved the rainforest. A higher share of forestry land owned by state- owned enterprises also fosters afforestation on wasteland, but seems to lead to faster exploitation of natural forest, at least initially. The uncertainty that existed in the early period of economic reform quickened the pace of resource extraction and deterred investment.
Site Characteristics: In Hainan, there is much land that has a defined owner, but the owner is unable or unwilling to enforce property rights making these areas in effect open access. Due to, e.g., poor land quality and low output prices revenues may not have been sufficient to cover the costs of protecting the property. Consequently, the property rights are not enforced and inactive management is a rational choice. In spite of this, land tenure reforms play an important role in forest investments in China. Empirical results of this study suggest that de-collectivization in the form of the household responsibility system is an incentive to forest investment into plantations, but may have initially increased rainforest exploitation.
Comments: Note from the proponents: Our data were collected mainly from official sources. Changes in conceptual definitions and statistical data collection methods occurred during the observation period. Also, land reforms affecting other land categories (such as real estate business and agricultural sectors) that clearly have direct or indirect influences on the relative value for forest management could not be studied. However, the results indicate that when studying land allocation between forestry and other land uses, it is important to disaggregate forest land into managed and natural forest in order to derive relevant policy implications.