A love of Chinese and English literature initially drew Dr. YuanYuan Yi to the halls of academia. But while in her first job at the Chinese Center for Agriculture and Policy and later at the China Center for Environmental and Energy Economics (C2E3) at Peking University she got a glimpse of the potential of environmental and resource economics to address the country’s poverty and development challenges. Today, Yi’s attention is focused on how China’s changing land tenure policies can improve forest conservation and tackle household energy poverty in rural villages.
‘If I’m a farmer, and don’t own the land where I grow my crops, it’s likely that I won’t see the land as a long-term asset,’ says YuanYuan Yi. ‘As a result, I may not invest in looking after that land and may exploit it to make the biggest gain in the short-term. But if I own the land for a long time, I will invest in it. If I can rent it out or sell it, I will invest to improve it for a good price. If I can pass that investment on to my children, it will ensure that the returns on that investment stay in the family.’
Yi is an environmental economist at the China Center for Energy and Development (CCED) at Peking University, the Chinese center of the EfD network, and her comment gets to the heart of one of the challenges resulting from the collective and household land ownership policy in her country.
Chinese law does not allow for private ownership of agricultural land. This means that rural households may not have an incentive to invest in the land on which they are dependent for their livelihoods. When land tenure is insecure, this can lead to over-exploitation of farms, loss of natural resources, and erosion of ecosystem services.
The large-scale floods which devastated villages and farmlands in lower-lying areas along the Yangtze River in 1998 following unseasonably high rainfall that year alerted the government to the threat posed by degraded landscapes to life and infrastructure. Well-vegetated landscapes help bind soils, slow rushing water during a storm event, and prevent erosion, all of which can offset potential flood damage.
‘After those floods, the government began considering how to encourage farmers to restore marginal agricultural land by growing forests, because these can protect soils better than crops can,’ explains Yi.
One of the ways to encourage farmers to invest in forest growth was to expand a model of agricultural land ownership that the government had begun testing in the late 1970s, which back then was intended to address the very problem of over-exploitation of farmlands. The policy involved a process of transferring control over forestland from the village-level collective, to private households. This was a voluntary scheme, which, if adopted by agreement by the community, allowed for households to have contracts with the local government that gave them land-tenure over plots of forestland for 30 or even 70 years. The rationale was that if people knew that they would the benefits of their investments on a piece of land in a long-term period, they would be more likely to take care of it.
This reform was initiated in Fujian province in south-eastern China at the beginning of the 2000s. The local success encouraged the central government to adopt it officially, and take it country-wide.
‘Under the Collective Forest Tenure Reform program, a village can now decide to transfer the power to manage its village-owned forests to individual households, if two-thirds of the village agrees to this,’ explains Yi.
Once a village collective votes to give long-term tenure to private households, in addition to getting the right to that piece of land up to a period of 70 years, the individual families get autonomy over how they choose to use the land, as long as they maintain the land as forestland. They also get full ownership of any returns on the production that happens on that land, she explains.
‘This policy allows a household to use the land for other purposes, such as change the forest type. For example, they are free to change a timber forest plot to a fruit orchard, or to transfer the use of the land to other people, or use it as collateral.’
Ultimately this should allow farmers to have access to a healthy stand of trees where they can harvest firewood and other forest products, and eventually have mature trees which they can fell and sell as timber. Under this tenure system, each household keeps the profits of this kind of sale, rather than giving it over to the village collective.
In less than two decades, it appears that this policy reform is working, through increased private investment in forested land and improved tree cover.
Yi has spent the past 11 years examining, amongst other things, what the additional benefits are of devolving property rights on forested land, how people are using the forests in their care, and how this is impacting household welfare.
Secure land ownership encourages greater investment in trees and village-level cooperation
The EfD-China Centre EEPCthe China Center for Environmental and Energy Economics (C2E3) — was started by Prof Jintao Xu in the Center for Chinese Agricultural Policy at the Chinese Academy of Sciences, focuses much of its research on land tenure and forests, bringing Prof Xu’s experience in the field which does back to the 1980s.
To contribute to this work, Yi works as a research scientist at the National School of Development at Peking University, where she has been based since August 2019. This position follows on from a two-year post-doctoral consultancy with the World Bank, which she was able to do after completing her doctoral studies in environmental economics at Gothenburg University, Sweden, which she did between 2012 and 2017 with the support of EfD.
Yi’s interest in property rights, tenure security, and their potential to encourage greater investment in forests date further back, though, and began during her Master's studies at Gothenburg in 2009.
Since then, Yi’s research has allowed her to analyze the impact of the forest devolution policy on environmental outcomes and household welfare.
In order to track how effective this policy has been in China, EfD researchers conducted surveys with nearly 3 000 households across 262 villages in eight provinces from 2000 to 2012. Some of the households interviewed in the process were those who had adopted the tenure reform process, and some were from communities that had not. This allowed researchers to compare the different groups to better understand the outcomes of the policy reform.
Researchers asked the households, amongst other things, what forestry practices they were using to manage their trees, and how they were using the forests as a resource.
Yi has used this data to get insights into how people were managing the trees on their land, as a consequence of having more secure ownership of the land, along with rights over how to use the land and forest resources on it.
‘The household surveys asked questions relating to how much families were investing in their forests on the plots that they now owned because of the devolution policy, as well as on the plots under other tenure forms, such as collective-owned or rented land agreements, if applicable,’ she explains.
‘We asked landowners what activities they were engaged with on their land, such as tree planting. They were asked how they were tending to these trees, such as if they were cutting branches to thin out the canopy to keep healthy and make room for other trees to grow,’ Yi says. ‘What other silviculture activities did they use, such as insect and disease treatment? How many days of labor did they invest in the plot? What were their inputs, and how much money did they spend on those?’
Yi also looked at satellite imagery of the forests around the surveyed households in order to track the changes in forest and vegetation cover since the policy reform was introduced. She compared the satellite images of the villages with the devolution reform with the ones that did not adopt the reform, to see if there was a difference in canopy cover and vegetation density.
The satellite images showed a definite increase in tree cover in the areas where individual households had tenure rights to their forests. The analysis showed that villagers had planted more trees, which increased forest cover and had also put more effort into protecting the trees.
‘It may need more time until we see a dense canopy of vegetation forming in the study areas, but what is clear from our findings is that when households were given forest rights, it results in greater communal collaboration over forest conservation in the village.’
‘Our study also showed that, in response to households voluntarily managing their forests when they have the tenure rights of the forest, the potential to increased forest cover by 12 percentage points,’ she says. ‘When households have guaranteed ownership of a forest and can expect returns on their efforts and investments, the entire village is incentivized to work together as a community to protect their forests.’
Studying the survey data also showed that village-level cooperation in forest management allows individuals to pursue work away from their farms, and saw an increase in household income as a result.
‘This suggests that households can benefit from the increased scale of village-level joint forest management, while forestland ownership guarantees that they still own the property. This can increase off-farm income, and more efficient forest management can improve household welfare,’ she says.
The implication for Chinese policymakers is that where villagers have this comparative advantage in forest management, the state should invest in silviculture training and improved access to forest-product markets which will benefit both forestry production and the environment.
‘Government should design labor market policy to help off-farm laborers get their preferred jobs through reducing the barriers for rural laborers to access labor markets so that they can devote more of their time to paid work.’
The team with which Yi is working goes on to recommend that in areas where the land tenure rights are still limited to 30-year contracts, these should be extended to 70 years. This will allow for more secure tenure and, in particular, for households to get a better return on their investment since trees take a long time to grow.
‘This will boost forest conversation as well as household welfare.’
Long-term forest tenure can address energy poverty in rural China
The Chinese government is making good headway on its goal of mass electrification across the country. And yet, solid fuels such as wood remain an important source of energy for many poor households in rural China, particularly for heating and cooking. This is unlikely to change in the near future and poses a threat to sustainable forest and land use.
Yi and her colleagues at the China Center for Energy and Development (CCED) and School of Public Policy and Administration of Xi'an Jiaotong University have also looked at how land tenure policy influences families’ choices of household fuel.
Once again looking at rural families in poorer and remote parts of the country, the team considered the energy needs and behavior of families who depend on forests as a source of firewood. Their analysis finds that when families have ownership of forests, they are more likely to have a secure source of fuel.
‘The implication for policymakers is that they should consider integrated forest planning along with secure land tenure rights, in order to encourage a more diverse and optimal use of forests as a source of firewood, timber, and other forest products, while also seeking appropriate opportunities to promote clean energy,’ says Yi.
This will allow village communities to use their forests efficiently and sustainably as a source of firewood to meet their household energy needs.
‘Understanding the fuel choices and consumption patterns of low-income rural families is critical to coming up with appropriate energy policies that are geared towards reducing poverty while also improving environmental conditions in developing countries,’ says Yi.