Property rights integrity, tenure security and forestland rental market participation: Evidence from Jiangxi Province, China

Abstract

The decentralization of property rights is the focus of the forest tenure reforms in several developing countries. In China, it was achieved by the launch of a new round of collective forest tenure reform beginning in 2003, which provided farmers with more integrated and secure forestland rights. Drawing on household data collected in Jiangxi province in 2011 and 2013, this paper examines the impacts of households’ recognition of property rights and improved tenure security on forestland rental activities. Our empirical results show that households with higher perceptions of more complete use rights and mortgage rights have a lower probability and intensity of renting‐in land, while households with lower expectations of future forestland redistribution or expropriation are more likely to rent in forestland and more of it. These results imply that the development of a forestland rental market leading to better forest management requires an integrated forestland management approach consisting of decentralization of property rights and village governance. In particular, the central government may further clarify the rights and obligations affiliated to forestland ownership, contractual rights, and management rights; while the village collective may shift from direct intervention in the integrity and security of forestland rights to the supervision and protection of decentralized forestland rights to increase efficiency from the decentralization of property rights.