Yichun, a city in the eastern region of Heilongjiang Province, was labeled "the last stronghold of the planned economy in China." Since the early 1980's, Yichun faced the dual pressures of a resource crisis coupled with economic stagnation. It is a forestry city where resources were almost exhausted; forest volume had been reduced by 55 percent. The income of forest workers was very low and the social security system was on the verge of bankruptcy.
In April 2006, Yichun launched a pilot reform that allowed forest workers to rent 10 hectares (roughly 25 acres) of the state-owned forest land for 50 years. By December 2006, the program's preliminary goals had been achieved; roughly 80,000 hectares (almost 198,000 acres) had been leased by 6,623 families. Since 451 families couldn't afford the rental fees, the government spared 2,872 hectares so that these families could rent land in the future.
The reform adheres to the principle of "ecological efficiency first." It helps preserve the more than 3 million hectares of ecological forests that currently exists by allowing forest workers to rent only the low-quality commercial forests. It also is "open and fair" to all forest workers who live and work in the forest below the rank of division-level officer. Additionally, it encourages people to make suggestions for improving the program. Finally, to encourage participation, the government offers low-interest loans and provides free assistance to forest workers including free training, free tree seedlings, and free equipment.
The reform has been successful in the following ways. First, it clarified ownership of forest land and confirmed the rights, responsibilities, and interests of forest workers. Second, with implementation of the reform, forest workers were motivated to re-forest the land, bringing ecological and economic benefits to society. Third, the reform generated an effective mechanism for preserving forest resources. Compared to the pre-reform era, forest workers are now more enthusiastic about caring for the land, which secures the value of the forest as a resource. Finally, the reform stimulated new forms of businesses such as family-owned, jointly managed and owned companies.
The following problems are still to be addressed:
- So far, only 6,623 families participate in this program. As the benefits of the reform become obvious, more and more forest workers will aspire to become involved.
- There is currently a 10-hectare-per-family limit. Some forest workers would like to rent more land because more than one member of their family is a forest worker.
- Under the current legal system individuals cannot obtain a "forest ownership license" when they rent state-owned forest land, which hampers their ability to obtain loans.
- If the government opened the market for forest property rights transactions, forest resources could be capitalized as independent transactions.