Forestland Use Policy in Vietnam: An Economic Analysis

The thesis provides an in-depth examination of Vietnam's Forest and Forestland Allocation (FLA) program, which is among the largest decentralization initiatives globally, covering over 14 million hectares. It targets approximately 24 million people in mountainous regions and millions more in lower basins. The primary goal of the FLA policy is to transfer control of state forestland resources to households and other entities for long-term and stable uses, with a focus on enhancing management efficiency and promoting environmental conservation. Despite its ambitious objectives, the FLA policy's formulation, implementation, and overall impact remain subjects of ongoing scholarly debate. The thesis addresses this gap by comprehensively investigating the FLA policy from its inception to its outcomes and impacts over the last three decades. It aims to bridge the divide between theoretical research and practical implementation, advocating for science-based policy interventions to ensure effective management and sustainability. The study identifies five key research issues related to FLA: policy-making processes, implementation challenges, outcomes, household land use dynamics, perceptions of land tenure security (LTS), poverty reduction impacts, and solutions to promote household tree planting through contract farming. To address these research issues, the thesis employs empirical analysis based on a survey of 240 households in Lam Dong province and longitudinal data from the Vietnam Access to Resources Household Survey (VARHS) conducted from 2008 to 2018. Findings indicate that while the FLA policy has achieved some quantitative successes in terms of household involvement and allocated land area, it faces significant challenges in formulation, implementation, and impact assessment. Inadequate monitoring, unclear roles and responsibilities, and resource constraints contribute to distorted implementation at the local level. Moreover, the lack of supportive policies exacerbates the challenges faced by land recipient households, particularly those in poverty or with urgent livelihood needs. The study also delves into household land use dynamics, identifying factors influencing tree planting decisions, such as financial analyses, market conditions, and household characteristics. Contrary to conventional wisdom, perceptions of LTS do not significantly deter tree planting investments. However, the study highlights the need for targeted interventions to support impoverished households and promote sustainable tree planting practices. Furthermore, the thesis explores the impact of FLA and household tree planting on poverty reduction and welfare improvement. While FLA policies positively influence poverty alleviation, their effects are more pronounced among non-poor households. The study recommends policy improvements to better align with the genuine livelihood needs of impoverished households, including promoting long-term cashew plantations and implementing incentivized policies for tree planting. Additionally, the thesis analyzes the determinants of household participation in contract farming for tree planting and compares the financial performance of different contract farming models. Findings suggest that contract farming can significantly increase household income and contribute to sustainable development, particularly when supported by inclusive value chains and targeted policy interventions. In conclusion, the thesis offers valuable insights into the formulation, implementation, and impacts of Vietnam's FLA policy, providing recommendations for policy improvements and future research directions. It contributes to the existing literature on public policy formulation, household land use dynamics, and poverty reduction strategies, with implications for similar land reform initiatives globally.