The Impact of Forestry Industry Integration on the Forest Farmers' Income in China: A Theoretical and Empirical Study

Abstract

Transforming the forestry development model and promoting the integrated development of the forestry industry has become an important way for forestry to break through development bottlenecks and achieve efficiency enhancement, prosperity of forest areas, and income increase for forest farmers. In this study, we have theoretically elaborated on the mechanism by which the integrated development of the forestry industry affects the income level of forest farmers. In terms of empirical research, we use the inter provincial panel data from 2005 to 2019 to empirically test the individual heterogeneity, regional heterogeneity, and spatial spillover effects of forestry industry integration on forest farmer income with the help of fixed effect model, quantile regression model and spatial panel model. Results showed that, firstly, the level of integration in the forestry industry is on the rise, with most provinces in the middle or high integration stage. Among them, the Northeast region has the highest level of integration. Secondly, there is a positive spatial correlation in the income of Chinese forest farmers, and the spatial correlation is gradually increasing. The income of forest farmers in coastal provinces is relatively high, as indicated by the presence of HH clusters. Thirdly, the integration of the forestry industry has significantly improved the income level of forest farmers, and there are group heterogeneity and regional differences. The heterogeneity of income is reflected in the increasing income effect of forestry industry integration, which continuously strengthens with the improvement of the income level of forest farmers. Regional heterogeneity is mainly manifested in the Northeastern, Eastern, and Central regions. The integration of forestry industries can significantly promote the growth of forest farmers’ income, while in the Western regions, the income increase effect of forestry industry integration has an inhibitory effect, but is not significant. Finally, the integration of the forestry industry has significant spatial spillover effect and the indirect effect is greater than the direct effect. However, the spillover effect coefficient is 0.007, which is still at a relatively low level, and the diffusion effect generated by factor flow still needs to be strengthened. Efforts to boost integrated forestry industry development will broaden the income channels of forest farmers by leveraging high productivity of the agglomeration effects, diffusion effect and demonstration effect, strengthening regional communication and cooperation, and promoting integrated forestry industry development with adjacent regions. This study helps to correctly grasp the relationship between forestry industry integration and farmers’ income, and provides decision-making reference for local governments to formulate policies for increasing farmers’ income in the development of forestry industry integration based on actual situations.