Forest tenure reform may take a substantive step forward in the No. 1 Central Document

One of the contents most likely to be focused on in the 2015 Central “No. 1 Document” is the advancement of reform of the rural collective property rights system. As an important part of this, forestry reform is about to take a substantive step forward. An Economic Information Daily reporter recently learned from authoritative sources that China will issue a series of documents in 2015 for comprehensively deepening forestry reform, and will amend and revise a series of laws and regulations. It is reported that this round of reform includes two major aspects: reform of the institutional mechanisms of state-owned forest regions and state-owned forest farms, and reform of the collective forest tenure system. Specifically, it includes important measures such as forming a preliminary solution to the debts of financial institutions in state-owned forest regions and state-owned forest farms, and launching pilot reforms of the equity rights and functions of forestry collective assets.

Authoritative sources disclosed that the 2015 work plan for comprehensively deepening forestry reform has two major priorities: first, building comprehensive collective forestry reform pilot demonstration zones and launching pilot reforms of the equity rights and functions of forestry collective assets. This will be an important part of the reform of the rural collective property rights system that the central government is about to launch. This work is currently being advanced intensively. It is reported that in order to guide and standardize the rural property rights trading market and effectively safeguard the lawful rights and interests of parties to forest tenure transactions, the State Forestry Administration and the State Administration for Industry and Commerce recently jointly issued model texts for the Collective Forestland Contract and the Collective Forest Tenure Transfer Contract. Experts expect that, given this development trend, the State Council's opinions on comprehensively deepening reform of the collective forest tenure system can be expected to be issued soon.

⟦NL> According to earlier remarks by Vice Minister of Agriculture Chen Xiaohua, an important purpose of reform of the rural collective property rights system is to actively develop farmers' shareholding cooperatives and grant farmers six rights and functions over collective asset shares, including possession, income, paid exit, mortgage, guarantee, and inheritance. Li Guoxiang, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences, said that collective forest tenure reform will also follow this line of thinking. Compared with reform of the rights system related to rural collective land, forest tenure reform started relatively late, but its direction is very similar. It also involves confirming rights and shares and contracting collective forestland to individual farmer households, then transferring and concentrating it through the trading market, and, through appropriately scaled management, protection, and construction, giving play to its function of increasing farmers' property income. Regarding collective forest tenure reform, there is likewise emphasis on improving the work of rights confirmation, registration, and certification, advancing the transfer of management rights in an orderly manner, and standardizing the property rights transfer trading market. It may also be necessary, as with agricultural land, to carry out the “separation of three rights” with respect to forestland rights.

Second, reform will target state-owned forest farms and forest regions. Li Guoxiang told an Economic Information Daily reporter that in the past there were many cases in state-owned forest farms and forest regions where government and enterprise functions were not separated, so reform must first straighten out the institutional mechanisms. It is reported that the reform plan proposed by the government includes: clarifying the ecological public welfare function positioning of state-owned forest farms, implementing the separation of government from enterprise and of affairs from enterprises, clarifying the forest resource property rights system of state-owned forest regions, orderly halting commercial logging of natural forests, establishing a new state-owned forest farm management system in which the state owns the forests, the central government entrusts provincial governments with primary responsibility, and local governments implement tiered management, and establishing and improving a forest resource supervision system with clear responsibilities and tiered management.

In addition, in 2015 efforts will also be increased to break through the bottleneck constraints on forestry investment. Forestry is currently the largest investment depression. Experts analyze that there are three major constraining factors: first, for a long time China's forestry development has emphasized production while neglecting the market; second, forestry production has a long cycle and requires large capital investment, and traditional financing methods do not match the production cycle of forest products; third, some policy restrictions affect the development of the forestry market, and problems such as difficulty in logging, difficulty in evaluation, difficulty in mortgage, and difficulty in financing have kept some market entities out of forestry. In addition, based on the central government's fiscal investment in forestry in 2014, the average investment per mu of forestland was only 38.5 yuan, and infrastructure in forest regions is extremely weak, urgently requiring further expansion of investment.

According to a person familiar with the matter, in terms of reform measures, on the one hand greater fiscal investment will be actively sought, and on the other hand the investment potential of financial capital will be brought into play to attract various funds to flow into the forestry industry on a large scale, for example by clearly providing long-term low-interest loans for forestry at the policy level.