Impact of Land Tenure Security Perception on Tree Planting Investment in Vietnam

TitleImpact of Land Tenure Security Perception on Tree Planting Investment in Vietnam
Annotated RecordAnnotated
Year of Publication2023
AuthorsHoang_Huu_Dinh _, Basnet S, Wesseler J
Secondary TitleLand
Volume12
Issue2
Key themesDistribution, Formalisation-titling, MarginalisedPeople, Policy-law
Abstract

With over 14 million hectares allocated, Vietnam’s forest and forestland allocation has been one of the largest natural resource decentralization programs in the developing world over the last three decades. Given this remarkable achievement, critics are concerned about the low rates of household tree planting investment and question the roles and effects of land institutions on investment. Using nested logit and ordered probit models, this study examined the effects of household perceptions of forestland tenure security on tree investment and the causal effects among 239 households in 11 communes in the Central Highlands. The findings suggested that, given the land titling in hand, household perceptions of potential land expropriation in the next five years did not thwart investments in both short-term acacia and long-term cashew horizons. The number of laborers, cost of plantations, off-farm and agricultural incomes, migrant status, soil condition, plot location, government subsidies, and a positive market outlook all played a significant role in this investment. Interestingly, we found that short-term tree planting had the reverse impact on decreasing land users’ perceptions of land tenure security, possibly because each tree rotation shortens the 50-year land use period recorded in the Land Use Right Certificate. However, market prospects and government subsidies may significantly counteract the negative perception of LTS and encourage households to plant trees. The policy implication is that, in addition to strengthening LTS to ensure households’ current and future land use rights, tree investment-incentivized policies should be implemented.
URLhttps://doi.org/10.3390/land12020503
Availability

Available for download
Countries

Vietnam
Document Type

Journal Article

Annotations

Overall relevance: 

This study investigates the relationship between smallholder farmers’ perceptions of forestland tenure and capital investment in tree planting in Vietnam. The study suggests that in the context of limited law and policy implementation, besides continuing to strengthen forest land use rights and ensuring forestland tenure security, additional policies to incentivize households to invest more in long-term tree planting are needed in the Central Highlands. Moreover, weak land use rights protection mechanisms lead to low levels of trust in land use right certificates and a low level of investment in tree planting. However, there are many other factors identified that influence household investment decision-making. For example, many small households still invest in tree planting in their allocated land not because a perceived sense of tenure security afforded by the land use right certificate but rather for their livelihoods or to capitalize on economic opportunities. Market outlook, combined with government subsidies, can overcome land tenure insecurity and encourage tree planting, particularly for short-term acacia.

Key Themes: 
  • Land distribution: concentration/dispersion, landlessness - Under Vietnam’s the Forest Land Allocation (FLA) program, 14.3 million ha of forest and forestland was allocated to various entities, including 4.5 million ha of degraded and barren forestland allocated to households for the purposes of tree planting. At first glance the FLA policy appears to be a success in natural resource decentralization. However, critics have noted low rates of household investment in tree planting. This is due to various factors, including locally distorted implementation of FLA, which has resulted in unequal distribution of land among communities, as well as public land expropriation and land grabbing, which have increased farmer’s perception of insecure forestland tenure. Nevertheless, the study finds that despite farmer’s negative perceptions of land tenure security, many farmers still invest in tree planting. Moreover, smallholder investment in tree planting can also strengthen perceived tenure security of households.
  • Land rights recognition/formalization/titling/collective tenure - In Vietnam, transferable Land Use Rights Certificates (LURC) have been allocated to individuals and households to improve land ownership security. Under the 1993 Land Law, the forestland allocation period was increased to 50 years for perennial crops which paved the way for the FLA policy. However, the study shows that land titling does not necessary ensure the land ownership of households or increase land tenure security perception of poor and small-scale farmers participating in the FLA program. The authors identify a declining trust in formal land formalization processes and institutions, leading to lower levels of investment in tree planting. But there are also many other factors that contribute to households' decision to invest in plantations, namely labor availability, investment costs of plantations, off-farm and agricultural incomes, migrant status, soil condition, plot location, government subsidies, and market outlook.
  • Marginalized people's land rights and access: ethnic minorities, poor and women - Many smallholder households have used allocated land for tree plantations (including acacia and cashew species) in response to market prices and government support. However, the study notes that ethnic minority households are vulnerable to land expropriation and that the FLA process itself disrupts existing land use systems by redistributing existing cultivated land owned by ethnic minority for tree plantations.
  • Land policy and land law - No policy action has been taken to enhance forestland tenure security for smallholders since the 2013 land law amendment. Thus, the policy implication is that the government should take further steps toward strengthening land use rights and prioritize incentive-based policies to encourage smallholder farmers to invest in or plant more trees.
Research basis: 

The research was conducted in three districts in Lam Dong province in the Central Highlights, namely Bao Lam, Cat Tien, and Da The in Lam Dong. The province was selected because it has a large allocation of forest land for afforestation, ethnic and socioeconomic diversity, and different land-use strategies. The research method included a household survey conducted in 2012 which randomly selected 11 from a list of 37 communes in the three districts involved in the FLA program. Data was collected from a total of 239 households (172 planting and 68 non-planting households) using a structured questionnaire designed to survey the costs and benefits of tree-planting activities and the related variables. Methods used for econometric data analysis are Empirical Model of Land Use Choice and Estimation Strategy. (Provided by Phan Thanh Thanh).