| The potential contributions to forestry development from decollectivization and price liberalization, two major components of Chinese rural reforms, were first examined using a supply-response model. It is found that farmers' production behavior in different regions vary substantially. Changes in stocking volume and acreage in the north are both positively and significantly related to the adoption of the household responsibility system (HRS) and price increases, while coefficients in the south are all insignificantly negative.A growth accounting further revealed that during the period of 1978-1989, the combined effects of institutional and price changes in the north accounted for 29.6% of the 184% harvest growth, 46.3% of the 94.8% inventory growth, and 46.6% of the 115.9% acreage growth. In contrast, the only 10.4% harvest growth in the south came exclusively from the shift to the HRS, which has done little to overcome the decline trend in inventory, while 38.4% of more acreage expansion was offset by both price and land tenure reforms.Translating these production changes into welfare measures, we also found that the annual timber inventory increment of over 3.49% in the north, benefitted both consumers and producers by increasing the stumpage supply, with more having been gained by the former group. The timber production response in the south was so weak that only 0.16% of the 0.6% annual decline in stocking volume was offset, which was unable to result in welfare improvement given the market structure there.These differences indicate that the reform policies have been implemented differently in different regions. Compared to the north, our analysis suggests that the reforms in the south have caused more land tenure insecurity and timber market distortions. As a result of these differences in policy implementation, different incentive structures have induced farmers to respond in very different ways. Therefore, it is argued that attention must given to the implementation process of reform policies so that a favorable incentive structure can be assured for forestry development. |
