Farm­ers find new sources of in­come

Changes to the long-stand­ing for­est own­er­ship sys­tem are pro­vid­ing new sources of rev­enue for im­pov­er­ished ru­ral res­i­dents, as Hou Liqiang and Hu Mei­dong re­port from Wup­ing, Fu­jian prov­ince.

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Ac­cord­ing to an old Chi­nese say­ing, “If you live on a moun­tain, you live off the moun­tain”. The peo­ple of Wup­ing county, Fu­jian prov­ince, are liv­ing proof of that adage.

In the 1990s, when­ever the lo­cals needed money they sim­ply cut down trees and sold the wood. The re­sul­tant ex­ces­sive de­for­esta­tion prompted the lo­cal gov­ern­ment to re­form the col­lec­tive forestry own­er­ship sys­tem in 2001 and distribute re­sources to in­di­vid­u­als, a move en­dorsed by Pres­i­dent Xi Jin­ping, who was gover­nor of Fu­jian at the time.

The re­forms were so suc­cess­ful they were pro­moted na­tion­wide, and changes are con­tin­u­ing in the forestry sec­tor.

Hav­ing es­tab­lished a gov­ern­ment-backed credit guar­an­tee com­pany, which spe­cial­izes in forestry eval­u­a­tion, man­age­ment and dis­posal, Wup­ing has set an ex­am­ple by help­ing res­i­dents to ob­tain bank loans us­ing their forestry as­sets as col­lat­eral, so they can start busi­nesses re­lated to the sec­tor.

So far, the move has been suc­cess­ful both in rais­ing liv­ing stan­dards for peo­ple in moun­tain vil­lages and in main­tain­ing wood­land.

In 1998, when Li Yongx­ing re­turned to Jiewen vil­lage in Wup­ing, af­ter be­ing made re­dun­dant by a State-owned com­pany in the county seat, the vil­lagers and of­fi­cials asked him to be­come vil­lage head. While he was keen to take on the role, the dif­fi­cul­ties the vil­lagers faced in pro­tect­ing the col­lec­tively-owned forests made him hes­i­tate be­fore ac­cept­ing.

“All the large trees had been felled, and the vil­lagers of­ten fought when scram­bling for trees to cut down,” Li, 68, re­called.

The sit­u­a­tion in the county, which bor­ders Guang­dong prov­ince, was so bad and the peo­ple were so poor that in the 1990s more than 100 farm­ers driv­ing trac­tors loaded with lum­ber forced their way through a pass, and headed for Guang­dong, where they could sell the wood at a high price, ac­cord­ing to Deng Suimin, for­mer deputy head of the Wup­ing county gov­ern­ment.

Li at­tempted to rec­tify the sit­u­a­tion by hir­ing rangers and or­ga­niz­ing pa­trols, but his ef­forts failed. In 2001, he was con­sid­er­ing quit­ting when he heard that the county gov­ern­ment was launch­ing a pi­lot project to distribute for­est re­sources to in­di­vid­u­als. Li ap­plied for the project to be car­ried out in Jiewen be­cause he had been think­ing about us­ing the same ap­proach to pro­tect lo­cal wood­land.

Li’s ap­pli­ca­tion was ap­proved, but trou­bles lay ahead be­cause at the time China’s forests were ei­ther held col­lec­tively or owned by the State.

“There was al­most no ex­pe­ri­ence or le­gal sup­port for the pi­lot project,” he said.

Lo­cal op­po­si­tion

About 20 per­cent of the vil­lagers op­posed the re­dis­tri­bu­tion of re­sources, and some even lodged com­plaints against Li with the county gov­ern­ment be­cause they thought the move would re­sult in the ero­sion of col­lec­tively-owned as­sets.

One per­son who stood by Li was Yan Jin­jing, deputy di­rec­tor of the Fu­jian Forestry Ad­min­is­tra­tion who was the lo­cal Party chief at the time. “As there was no ex­pe­ri­ence of, or pol­icy for, the re­form of for­est own­er­ship we could have cho­sen to do noth­ing. But the re­forms were re­lated to peo­ple’s in­ter­ests, and it was our re­spon­si­bil­ity to pro­tect those in­ter­ests,” said Yan, who found him­self un­der great pres­sure be­cause fail­ure could re­sult in even greater de­for­esta­tion.

When vil­lagers dis­cussed how to distribute the as­sets, a num­ber of wealthy out­siders con­tacted Li and promised to re­ward him if he sold some of

the for­est to them. Li re­fused.

“The vil­lagers had lived off the moun­tains for gen­er­a­tions. If they didn’t even own a small area of the moun­tain, it would be hard for them to make a liv­ing,” he said.

With the help of about 10 of­fi­cials from the county gov­ern­ment, a plan was even­tu­ally drafted that sat­is­fied the vil­lagers. At the end of 2001, the vil­lagers re­ceived own­er­ship cer­tifi­cates for the sec­tions of for­est they had been al­lo­cated.

In April 2002, the county gov­ern­ment be­gan to roll out the re­form, known as the Col­lec­tive Forestry Own­er­ship Sys­tem, across the county, de­spite the fact that the higher level of gov­ern­ment had not au­tho­rized the move.

The re­form won sup­port from Xi when he vis­ited Wup­ing in June that year. Dur­ing his visit, the then-gover­nor said: “The re­form of the forestry sys­tem is on the right track. It should be put for­ward in a down-to-earth way, so the peo­ple will ben­e­fit.”

He also said the re­forms should fol­low the ex­am­ple of the House­hold Re­spon­si­bil­ity Sys­tem, which was in­tro­duced in the 1980s and al­lo­cated land to in­di­vid­ual farm­ers via con­tracts. They were al­lowed to ei­ther sell sur­plus pro­duce at mar­ket rates or keep it for their own use.

The re­form also pro­tected Wup­ing’s ecosys­tem. Ac­cord­ing to Li, be­fore the re­dis­tri­bu­tion of re­sources, for­est fires were com­mon be­cause the vil­lagers had no vested in­ter­est in the wood­land and few helped to put out fires. Once the re­form had been im­ple­mented, how­ever, they be­gan to take bet­ter care of their as­sets.

“Af­ter the re­forms, there were no more for­est fires be­cause the vil­lagers be­came more cau­tious about where they lit fires to en­sure their as­sets weren’t dam­aged,” he said.

Ac­cord­ing to the county gov­ern­ment, al­most 47,667 hectares of trees have been planted since 2002, equal to the to­tal area planted be­tween 1977 and 2002. Now, the county’s forestry cov­er­age rate is al­most 80 per­cent, up from 76.8 per­cent in 2001.

Yan said Xi’s sup­port at the most chal­leng­ing time in the re­form process was “de­ci­sively sig­nif­i­cant” for its suc­cess.

Quota sys­tem

How­ever, new prob­lems arose. For ex­am­ple, China em­ploys a quota sys­tem for tree felling, which states that farm­ers can only cut a cer­tain num­ber of trees 10 years af­ter they have been planted, and are only al­lowed to fell their en­tire stock af­ter 26 years, which means it takes a long time to make a profit.

“Last year, the value of Fu­jian’s forestry re­sources was es­ti­mated at 1 tril­lion yuan ($147 bil­lion). Ex­plor­ing and un­der­stand­ing how to trans­form these re­sources into cap­i­tal is the key for build­ing a mod­er­ately pros­per­ous so­ci­ety in Fu­jian,” Yan said. He added that the most chal­leng­ing work the gov­ern­ment faces is en­sur­ing that the lo­cal ecosys­tem is well pro­tected, while si­mul­ta­ne­ously de­vel­op­ing the lo­cal econ­omy and rais­ing liv­ing stan­dards.

In June 2006, Wup­ing at­tempted to help farm­ers ob­tain loans by of­fer­ing lo­cal banks 2.4 mil­lion yuan as se­cu­rity. The banks would then be able to is­sue loans to­tal­ing five times that amount.

The idea was tri­aled, but failed to achieve the de­sired ef­fect. The lack of eval­u­a­tion and man­age­ment ex­per­tise of forests, which were prone to dam­age by the weather or dis­ease, meant the banks were re­luc­tant to pro­vide loans, ac­cord­ing to Huang Jianzhong, di­rec­tor of the Wup­ing Hengx­ing Ru­ral Bank.

As a re­sult, the county gov­ern­ment es­tab­lished a forestry own­er­ship col­lec­tion and bonding com­pany in May 2013, which helps bridge the gap be­tween farm­ers and banks.

The col­lec­tive not only helps to eval­u­ate farm­ers’ as­sets, but also as­sumes man­age­ment du­ties if the own­ers are un­able to main­tain loan re­pay­ments, said Chen Jian­min, di­rec­tor of the Wup­ing forestry own­er­ship ser­vice cen­ter.


With 15 mil­lion yuan pro­vided as se­cu­rity by the county gov­ern­ment and us­ing the re­sources as col­lat­eral, three lo­cal banks had is­sued loans to­tal­ing 310 mil­lion yuan by the end of May, he added.

Jiewen res­i­dent Li Guilin, who was granted China’s firstever forestry own­er­ship cer­tifi­cate, was one of the ear­li­est ben­e­fi­cia­ries.

In 2014, the 69-year-old farmer and two part­ners be­gan rais­ing chick­ens. How­ever, a lack of funds meant they could only raise about 1,000 birds ini­tially, but af­ter Li Guilin ob­tained a bank loan of 20,000 yuan in 2015, they in­creased the num­ber to 8,000. Hav­ing re­paid his orig­i­nal loan, Li Guilin has bor­rowed another 100,000 yuan to ex­pand his farm.

“At 15 yuan per kilo­gram, the price of chicken is good. I can make at least 20,000 yuan a year from the farm now,” he said, adding that with­out the loan his in­come would be much lower.

Last year, Wup­ing’s forestry in­dus­try gen­er­ated rev­enue of 5.47 bil­lion yuan, and the scale of re­lated busi­nesses was 2.4 bil­lion yuan, a rise of nearly 23 per­cent from 2015. The area un­der cul­ti­va­tion and used for flower nurs­eries was more than 1,926 hectares and worth more than 1 bil­lion yuan.

At least 38 forestry own­er­ship col­lec­tives and bonding com­pa­nies have been es­tab­lished in the prov­ince. They have helped farm­ers to ob­tain loans to­tal­ing more than 2 bil­lion yuan, by us­ing their as­sets as col­lat­eral, ac­cord­ing to Xu Ruhui, di­rec­tor of the forestry own­er­ship re­form of­fice at the Fu­jian Forestry Ad­min­is­tra­tion.

In 2015, Wup­ing also started a pi­lot project to es­tab­lish co­op­er­a­tives to help farm­ers ob­tain loans. The one in Yuand­ing vil­lage has helped 280 farm­ers to se­cure about 40 mil­lion yuan to de­velop forestry-re­lated busi­nesses.

The re­form will con­tinue and will build on pre­vi­ous suc­cesses, Yan said: “Once the ben­e­fits from ear­lier re­forms are ex­hausted, other prob­lems will arise, so we must con­tinue to in­no­vate and un­der­take even more re­forms. We are ‘cross­ing the river by feel­ing the stones’, and we have yet to reach the river­bank. Re­form is the key to solv­ing the farm­ers’ prob­lems.”


A res­i­dent of Wup­ing county, Fu­jian prov­ince, checks the bee­hives he tends on land al­lo­cated by re­form of the for­est own­er­ship sys­tem.



Li Guilin dis­plays his cer­tifi­cate of land own­er­ship in Jiewen vil­lage, Wup­ing.

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