Examining the impact of forestry policy on poor and non-poor farmers’ income and production input in collective forest areas in China

Abstract

Forestry policy plays an important role in China's collective forest areas in improving the management efficiency of forest land and promoting poverty alleviation amongst farmers. The data used in this study comes from the follow-up monitoring survey data for 454 households in the 10 counties of Liaoning Province from 2012 to 2016. We use a two-way fixed effect model to analyse the policy factors that affect the income and investment of non-poor and poor farmers. Besides, from the perspective of factors output elasticity, the impact mechanism of policies on forestry income is explored. Our results indicate that: i) in terms of forest land contracting policies, we verified that the clarification of forest land contract rights provides important guarantees for households to invest in productive inputs (especially for poor families). ii) Of the forestry fiscal subsidy policies analysed, the ecological benefits subsidies were found to promote forestry income and stimulate input. In particular, it has an incentive effect on the output elasticity of labour factors of poor farmers. Moreover, the under-forest economic subsidies can promote the increase in forestry income through improving the output elasticity of capital factors for non-poor farmers. iii) In the aspect of forestry financial insurance policies, the forest tenure mortgage loans can only increase the factor input of non-poor farmers, and the impact on farmers' forestry income was not significant. The forest insurance policy has a significant effect on the forestry income of all farmers because it can increase the output elasticity of capital factors of non-poor farmers and the output elasticity of capital and labour factors of poor farmers.