Peter Cronkleton – How do property rights regimes provide incentives for FLR?


Good morning. As Louise said my name is Peter Cronkleton. I am based in Lima, Peru working for the Center
for International Forestry Research but I am collaborating on this team with funding
from DFID to examine tendencies in reforestation in these three countries. I would like to point out that this is a multi-author
paper. There are teams working on each of the three
countries where we are doing this research in Nepal, China, and Ethiopia. I won’t name all of them, you can see them
on the screen. The title of my paper today is Dealing with
Property rights and so the reason for that is secure property rights are seen as a key
enabling condition for forest restoration. To change stakeholder behavior, either to
get them to invest in restoration or to limit extraction to allow restoration, they need
to have insurance of future benefit gains from forest restoration, and confidence that
mechanisms to enforce rules exist, and that others will comply with those rules. However secure property rights are more than
just land title. There are several characteristics of property
rights that I want to point out today. They are themes that run through the cases
that we are going to examine in this paper. First is the issue of the origin of rights
or the nature of those rights, whether they are formal or customary. And in most systems you find a mixture of
both statutory legal rights and rules, and customary practices and beliefs. Also it’s important to understand that there
are often different types of property. There’s state or public lands, private that
can be both individual or collective, meaning that there is some entity that is able to
exclude others. But there are also open-access situations
that often result from either an overlap of these different types of property, where people
are able to venue-shop, or a breakdown in governance where there is actually no established
property system functioning. And in most of these cases you have nested
systems, so you have sometimes collective systems where there are customary individual
rights within them, and individual property rights systems where customary collective
rights allow the establishment of security. Also it’s important to understand that property
is usually seen as a bundle of rights. So you have access rights, whether you are
able to enter and benefit somehow from property, whether you have the right to withdraw from
that property, basically to extract but without influencing the behavior of other individuals
or having the ability to plan long-term. Management rights that actually allow you
to make decisions on how a property or resource should be used, and make long-term planning
decisions. Exclusion rights, which is the ability to
keep others from using the right, and alienation, which is basically the idea that you can transfer
or sell your rights to another individual or entity. When we are discussing forest property, it’s
important to understand that usually states embark on a partial devolution of rights. It’s rare that forest resources are transferred
with the entire set of rights transferred to the local communities. And this creates a co-management system where
basically there are shared rights and benefits. The local entity that receives the rights
has the ability to benefit, but they also have responsibilities to comply with regulations
established by the state. But also the state has obligations to provide
basic conditions to allow them to manage. So I am going to go through the three examples
relatively quickly since I don’t have much time. And I want to just go through first the tendencies
in the policy changes as the affect property rights, and then look at local examples to
see how those played out. So in Nepal, the transaction occurred over
several decades, and in 1957 there was a nationalization act that placed all forests under state control,
with the intention of protecting and conserving forests. But instead, it increased degradation by creating
open-access situations. In 1976 there was a national forestry plan
that devolved rights to local government, and attempted to promote restoration programs,
but these were done in a way that there was very little local participation in the plantations
that were being established on public lands, so these had limited levels of success. In 1988, there was a master-plan in the forestry
sector where policy-makers in Nepal began to recognize that communities needed to play
a role in the management and restoration of these forests, but it was not immediately
established as the national policy. This took place with the 1993 forestry act,
which recognized community forestry user groups that were able to gain control over forests
near their residence. It required these groups to formalize by adopting
a constitution using a template established by the government, and to develop operational
plans for the management of the restoration area that they were going to be working with. It also reduced the quasi-judicial powers
of local forestry officials who had had a great deal of control over forest access,
but also were channels of corruption. Very quickly, this system was recognized as
successful, and over the following decade was expanded to over 19,000 community forest
user groups in the country covering 1.7 million hectares, basically 33% of the forests in
Nepal. And almost 40% of the households, which is
quite impressive. We are going to look at a specific watershed,
the Phewa watershed, near Pokhara, and a community that I am going to refer to as SRD, not wanting
to massacre the Nepali. This is a watershed that has been quite successful. There are 77 community forest user groups
managing over 2,000 hectares of forest, and it includes almost 8000 households participating
in these restoration efforts. This specific community, SRD, has 219 households
managing an area of only 22 hectares. But this is a significant area of land for
this household. Prior to 1993, they had no rights over forest
restoration and no stake in decision-making over this area. Conservation activities were designed by external
experts and implemented with minimal local investment or involvement. And residents lacked interest in participation
and did not collaborate with conservation measures. So they typically extracted fuel wood or fodder
from this area, allowed their animals to graze, activities that were against the official
rules. After the 1993 forest act the community began
organizing to implement their own restoration plan. And this was in collaboration with local officials. And after 1995, they were given official recognition
for management of this area. They managed this area for fuel wood, fodder,
and bedding material. So to a certain extent it’s mainly for subsistence
purposes, but they also sell many of these products to surrounding communities. The regulations established by this user group
require members to invest labor in tree planting and to guard the forest to control grazing
and to monitor for forest fires. There are designated collection periods for
fuel wood and leaf litter that facilitate regeneration. And then the rights that each member have
include access, withdrawal, management, exclusion, and these rights are held perpetually, although
they are required to update their management plan every 5 years and if they don’t do
that they aren’t allowed to commercialize products from this forest but they are allowed
to continue to use it. And this has significantly increased the forest
quality and the community looks forward to possible benefits from Payments for Environmental
Services or Ecotourism, process that are currently being negotiated. Now I am going to switch to the example in
China, and quickly go over a few of the policy trends. In 1981, one policy was the household responsibility
system, which allocated agricultural land to increase productivity. Basically, households were given tenure certificates
as long-term lease contracts, and this was subsequently applied to forest land, although
with mixed results in different regions. A new tenure form between 2003-2008 transferred
99% of China’s collective forest lands to individual households, groups, investors,
and village collectives. And they were given long-term tenure security
in the form of 70-year renewable contracts. And they also had the potential, once they
had these contracts, to receive other types of subsidies for forest restoration, and this
reversed the trend of forest loss in southern China. We are going to look specifically at the Changing
County in the Fujian Province. This is an area of over 300,000 hectares with
a population of over 500,000 people, and it was once one of the most degraded counties
in China. 60% of the territory suffered from soil erosion. Forest landscape restoration programs began
in 1981, and focused on 970,000 hectares of eroded lands. And the program focus included exclosure efforts,
afforestation and orchard plantations. By 2015, eroded lands were reduced from just
over 30% of the area to less than 10%. The forest coverage increased from about 60%
in 1986 to over 80%, and the annual income increased from $60 in 1978 to over $1000 in
2015. But there were separate policy processes at
work in this context that involved different levels of government and different mandates. The three forest fixed reform from the early
1980s was intended to stabilize forest ownership. It delimitated the boundaries of mountain
exclosures that were then devolved through the system of forest responsibility. So 16% of the mountainous forested land were
distributed to 94% of the households, but in very small parcels of less than one hectare
per household. Most of the forests remained collectively
managed by the government and village collectives. Later, the Who Plant Who Own and the Wasteland
auction policy in the 1990s allowed villagers to invest in afforestation and plantations
to receive certificates of forest rights. It increased participation, forest cover,
and income. This was a very significant process. And then the reform of collective forest rights
after 2002. This was a decentralization of forest rights
from collectives to individuals. The state maintained forest land ownership,
but granted access, use, and management rights to forest lands to households. Additional incentives were reduced taxes and
fees, and the ability to participate in other restoration programs. It also allowed forest land mortgages, which
increased enthusiasm for investment in afforestation, and diversified participation in forest landscape
restoration. So the trends in these incentives were that
generally you saw a process of collective and public-owned property rights arrangements
provided relatively low incentives early on. The Forest Three Fixed program provided insufficient
incentives for management and protection, and theft in forest products continued. However, the collective forestry reform decreased
thefts and illegal harvests, however no afforestation activities either, because land was managed
through exclosure, so it was limited. And villagers were unwilling to invest in
forest landscape restoration on small, remote areas with limited rights. However, later the individualization of forest
rights arrangements provided relatively high economic incentives to large households, enterprises,
and cooperatives. Individual stakeholders willing to invest
in afforestation were able to attain economic benefits, and individualized property rights
arrangements encouraged public participation and diversified participation in the restoration
of landscapes. Now I am going to move on quickly to the Ethiopia
example. The policy trends that we have heard a little
bit about in Ethiopia started, I want to start primarily after the 1975 coup that replaced
a quasi-feudal system with the nationalization of forest properties throughout the country,
which created an open-access problem, because the nationalization did not take into account
local customary practices, and state agencies lacked to capacity to actually control the
forest areas that were nationalized. It corresponded with an increased national
research in degradation due to droughts, and so you had large-scale government programs
to conserve soil and water on sloping and degraded lands, massive tree-planting programs
on state lands, and major investments but with limited success. After 1991 there was another violent transition
in government, which maintained the tenure policy but introduced other reforms, but also
weakened governance in many rural areas. The national conservation strategy of 1994
stressed that local participation in development should be prioritized and used decentralized
approach to implement forest restoration programs, and it created space for NGOs to experiment
with Participatory Forest Management, which was one of these strategies that was promoted. NGOs helped to negotiate agreements between
communities and regional government agencies, although no formal rights to property were
transferred, it designated withdrawal rights, and some management and exclusion rights to
communities surrounding forests. We are going to focus specifically on the
Chilimo forest in the Oromia state, and while it had been designated as a national forest
priority area, much deforestation during the period of weak governance following violent
change in government in 1991. So from 1982-1995, forests in this area shrank
from over 22,000 hectares to just over 6,000 hectares. And in 1996, the NGO Farm Africa and SOS International
began promoting PMF as brokers between communities around this forest and the district government. They were able to gain some official access
and gain withdrawal, management, and exclusion rights, and in 2004 the district officials
legalized the bylaws of the forest user group, officially transferring the management and
use rights. The Chilimo FUG, which is one of these groups,
included natural forest and devolved rights over plantations that had been planted as
a buffer. They were only allowed to harvest NTFPs from
the natural forest. This included grasses, medicinal plants and
fuel wood. But they were allowed the collective sale
of timber from the plantations, which was less restricted, there were less restrictions
on use. And this allowed this user group to have considerable
income from timber sold from these plantations. And as a result, deforestation was reduced
and regeneration was enhanced in this particular community. However, there are concerns about marginalization. The government had decided on the composition
of the forest user groups, and so there was a lack of transparency in the distribution
of responsibilities and benefit sharing mechanisms. State agencies still lack the capacity to
assist with enforcement of exclusions, so there is illegal harvesting of small-diameter
trees, and leakage into non-participatory forest management forests near the user-group. Compared to forest user groups without plantations,
the timber economic returns were lower than expected in neighboring groups. However, communities expect that being granted
the PFM status is an incremental step to gaining recognition to stronger property rights in
the future, so just the opportunity to potentially get rights in the future continues to provide
incentives for people to participate. So finally, in conclusion, I just want to
draw what I think are four main points out of these cases. First of all, secured property rights are
an important enabling factor in forest restoration. I think that’s seen in all of these cases. However, secure property rights are more than
just land titles and involve multiple governance scales, relationships, and behavior. Generally, partial devolution of rights produces
co-management situations, and I think that’s what you see in all three of these cases. And finally, efficient and effective solutions
result from adaptive multi-stakeholder processes involving negotiations, and balance of trade-offs. Thank you.

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