Course:FRST370/Projects/Community Forests and Sustainable Co-Management in Longquan City, Zhejiang Province, China

The Nengfu Cooperative forestland

Community Forests and Sustainable Co-management in Longquan, Zhejiang Province

Since forest tenure reforms in the 1980s, the "household responsibility system" became the major model of forest management in China. However, each household has a small area of forestland, which is likely to face many difficulties with regards to afforestation, forest protection and market linkage. Meanwhile, the local enterprise, Zhejiang Nengfu Tourism Products Co., Ltd, had the problem that did not have the steady supply of timber. Therefore, in July 2007, the forest farmers in Zhoutiao, Bilong and Baiyan Administrative Villages of Longquan City and Zhejiang Nengfu Tourism Products Co., Ltd. invested to register and establish the Longquan Nengfu Afforestation Professional Cooperative. Meanwhile, the cooperative members transferred their forestland use rights to the Nengfu Cooperative, so the cooperative unified the management rights. In December 2009, the forestland of the cooperative gained the Forest Stewardship Council (FSC) certification with the support of local government and experts. This co-management model of “enterprise + forest farmer households” with FSC certification is the first attempt in China, which encountered lots of difficulties in the process, and will face the challenges in the future.

Zhulong Town, Longquan City

Introduction

Forestland in three villages

Longquan is a county-level city and former county under the administration of the prefecture-level city of Lishui in the southwestern Zhejiang Province, China. The Longquan swords and Longquan celadon ceramics are locally famous artifacts in ancient China. Moreover, Longquan is the birthplace of mushroom cultivation in the world, the first township of Chinese Ganoderma Lucidum. For the present forestry situation, the forestland area of Longquan is 3,985,000 hectares, and the forest coverage rate is up to 84.2%.

Zhoutiao, Bilong and Baiyan Administrative Villages is in Zhulong Town of Longquan City which have 1245 people and 344 households. In 2007, the average income per capita was CNY3960, but these three villages have a total of 113,445 hectares of forestland, and annual production of wood can reach more than 10,000 m³, accounting for 3% of the total collectively-owned forest in Longquan.

(Note: CAD1 = CNY5.27 at November 26, 2018)

Tenure arrangements

Before 1980s, tenure changes of the forests in three villages are similar to Naidu Village in Yunan Province. Local forest farmers in Zhoutiao, Bilong and Baiyan Villages had customary rights, and the land uses were regulated by customary, unwritten practice before 1850s. However, between 1950s and 1980s, the collectivization of China was carried out, and then all the land and natural resources were owned by the citizens of China and administrated on their behalf by the government. Thus, during this period, the ownership of forestland in three villages was statutory property. At the beginning of 1980s, the forest tenure reform has been implemented under the " household responsibility system" where the use and management rights of collective-owned forests have been allocated to individual households for 50-70 years. That is to say, legal and customary tenure has overlapped in tree villages.

Timeline of the Forest Tenure Reform in Longquan

Year	Events	Major Content	Left Problems
1981-1984	"Three-fix" Policy	stabilizing mountain rights, demarcating self-retained mountains and determining the forestry production responsibility system 72.5% of the collective mountain forests into responsible mountains and self-retained mountains for the management of farmers	Because the government directly handed out the printed certificate to the local villages and the villagers filled the certificates by themselves, there were no clear boundary households.
1989	Improvement of the responsibility system	clarifying the tenure and demarcating the boundary about 83% of the collective forests were divided into farmers management and management	The problems for wrong certificates, multiple certificates for one mountain and repeated certificates with state-owned forestlands was still there.
2006	Acceleration of forestry development	clarifying the tenure and replacing the wrong certificate 2514 certificates were updated	There was no related policy of transferring the forest use right.
Since 2010	Implementation of the "forest rights IC card"	Forest farmers can inquire about the location, topography, forestry resources, value and other relevant information of each mountain forest contracted, and directly handle the forest harvesting, forest tenure mortgage, forest land transfer, etc.	Due to the essence of "household responsibility system," each household has a small area of forestland, which is likely to face many difficulties with regards to afforestation, forest protection and market linkage.

Timeline of Tenure Changes in Three Villages

FSC certification evaluation site

Owing to the problems interpreted in the discussion, the Longquan Nengfu Afforestation Professional Cooperative founded by Nengfu Enterprise and farmers in 2007, July. Then, all the 344 households in Zhoutiao, Bilong and Baiyan Administrative Villages participated in the cooperative becoming the members and contracted "Power of Attorney." Therefore, the cooperative obtained the use rights of 7563 hectares forestland transferred from local forest farmers and unified the management rights. However, since 2010, the forest farmers in Longquan can use the "forest rights IC card" to transfer the forest use rights instead of "Power of Attorney," which is considerable progress.

However, only the cooperative establishment did not achieve the intentions of sustainable co-management, and the FSC certification was a significant project. The Forest Stewardship Council is a global not-for-profit organization (NGO) that "sets the standards to manage forest, both environmentally and socially." FSC certification validates that "the forest is being managed in a way that preserves the natural ecosystem and benefits the lives of local people and workers, all while ensuring it sustains economically viability." Since 2008, the cooperate began to prepare for the forest certification and in August 2008, "Smartwood," a certification authority accredited by FSC, pre-evaluated the forestland of the cooperative. Basing on the problems from the pre-evaluation, the cooperative made the related methods with the help of Longquan Forestry Bureau. Finally, in 2009, December, Nengfu Cooperative gained the FSC certification and the wood gotten from the forestland in three villages has been certified.

Administrative arrangements

The organization of the Nengfu Cooperative 

Organization of the Nengfu Cooperative 

The Administrative Office is mainly responsible for daily affairs and labour personnel management; the Finance Office is mainly responsible for finance, business settlement and asset management; the Afforestation Management Office is mainly responsible for resource cultivation, timber production and timber sales management; the Forest Protection and Fire Prevention Office is mainly responsible for resource protection and management; the Trade Union Organization is mainly responsible for maintaining employee rights and team stability. 

The cooperative set up three forest management offices in Zhoutiao, Bilong and Baiyan Villages separately under the Afforestation Management Office, and particular managers are responsible for comprehensive on-site management where timber production is primarily completed by means of outsourcing.

Decision-making Structure

The member assembly is the highest authority of the cooperative. It is held at least once a year and elected chairman of the cooperative who is the legal representative of the cooperative, has a three-year term of office and can be re-elected. Therefore, until now, the chairman of the cooperative is the initiator of the Nengfu Cooperative, Li Nengfu.

The forest farmers in the three villages can participate in the decision making of the cooperative through the member representatives elected by the cooperative members. The cooperative set up suggestion boxes in each village and then local forest farmers can report the situation through the suggestion boxes or the representatives of the members directly. Collecting regularly the condition suggested by the farmers, the representatives will present it at the member assembly and reflected in the decision-making process.

Benefit Distribution Mechanism

60% of the provident fund drawn by the cooperative each year is quantified as the share of each member according to their transaction volume (amount), and 40% of that is quantified as the share of each member according to their contribution to investment. Also, the average amount of property formed by subsidies and donations from others is distributed to each member.

Management Principles

These principles summarize the requirement and purpose of sustainable co-management which are scattered and embodied in this case study.

1. The principle of legal operation, unified regional planning, and mutual benefit
2. The principle of sustainable development
3. The principle of social development and economic development
4. The principle of following the unified ecological and economic benefits
5. The principle of systematic management
6. The principle of applying science and technology into forestry

Discussion

Major Successes of Sustainable Co-management

Eliminating relatively centralized forestland ownership and decentralized forest use right

All the forestland related to the Nengfu Cooperative in three villages was collectively owned, but only 67 hectares was collectively managed, which accounted for 0.09 % of the total area in 2007. A total of 7,556 hectares of forestland (99.91 %) was individually managed, and this was distributed among 344 households or 1,245 forest farmers, with an average of 21.9 ha per household or 6.1 ha per capita. Therefore, forest use right was extremely decentralized, which is hard to afforestation, forest protection and market linkage.

To solve the problems regarding separation of forestland ownership and use right, Nengfu Enterprise and local wealthy forest farmers, invested in establishing a cooperative with the three villages. Meanwhile, local forest farmers contrasted the "Power of Attorney" to transfer their use rights to cooperative and then the cooperative unified the management rights.

Addressing the problem of the lack of raw materials

Zhejiang Nengfu Tourism Products Co., Ltd. is an enterprise that exports the wooden beach umbrella and other wooden products to Europe, Australia and southeastern Asia and passed the Certificate of Conformity (CoC) certification in 2003. The Nengfu Enterprise used to buy the certified raw material mainly from the other places because of the exported market, but the supply of raw materials was not stable. To secure the supply source, the Nengfu Enterprise decided to carry out the local forest certification, so the cooperative was established and unified the management right to implement the FSC certification better.

Assessment and monitoring of potential effects of forest management

Assessment and monitoring of forest are designed to increase understanding of forest changes from ecological, environmental and social perspectives, which is an essential aspect that a certification body pays attention to in the forest certification. An industrial company-based cooperative is usually weak in doing this work because it lacks technical capacity, although labour, materials and financial resources for monitoring are available. For monitoring of the cooperative’s forestland and tree growth, the cooperative used data from the investigation of sampling plots set for regular forest inventory and from Category II Forest Resource Inventories conducted by local forestry bureau. In this way, the cooperative solved the problem of monitoring of tree growth and environmental impacts. 

Identification and preservation of High Conservation Value Forests (HCVFs)

High Conservation Values	Criteria	Specific Area	Measures
HCV4	Forest areas that provide basic services of nature in critical situations (e.g. watershed protection, erosion control)	Bilong reservoir bank protection forests in Zhoutiao Village	The Nengfu Cooperative designated the mountains within the first ridge line on both sides of the reservoir bank as reservoir protection forests.
HCV5	Forest areas fundamental to meeting basic needs of local communities (e.g. subsistence, health)	the forests around the four drinking water intakes in three villages	The cooperative had set up the protective forests above the four water intakes to protect the living water of the local community residents
HCV6	Forest areas critical to local communities’ traditional cultural identity (areas of cultural, ecological, economic or religious significance identified in cooperation with such local communities)	a natural broad-leaved forest called “fengshui lin" in Bilong Village	This environment forest has a special purpose for culture and religion and receives protection from residents.

Summary of Solutions during the Certification Process

1. Respect local traditions and culture (e.g., HCV6)
2. Establish a public complaining feedback mechanism
3. Feedback and communication between the cooperative and stakeholders (e.g., Forest Association consultation)
4. Environmental impact assessment of the cooperative forest management activities
5. Environmental monitoring mechanism of the cooperative's forestland
6. Determination and protection of watershed in the cooperative forestland (e.g., HCV4 & HCV5)
7. Technical support system (e.g., the cooperative expert group)
8. Determination of the cooperative regarding the cutting amount of woods - The cooperative members report their logging area to the cooperative expert group. The expert group uses the second-class resource survey and the actual annual harvest volume through a number of public notices for comments, and determine the cutting amount of woods in the end.

Affected Stakeholders

An affected stakeholder is defined as any person, group of persons or entity that is subject to the effects of the activities in a locally customarily-claimed forest area.

• Local forest farmers have customary rights and collectively owns the forestland in three villages recognized by the government. Participating in the Nengfu Cooperative, they transferred their use rights and has gained the handsome income by producing the timber sustainably. If they want to involve in the cooperative decision making, they only can convey suggestions through the representative on the member assembly.
• Longquan Nengfu Afforestation Professional Cooperative has the use and management of the certified forestland in three villages and organizes the members to process and sell the timber to Nengfu Cooperative.

Affected Stakeholders	Relative Objectives	Power & interests
Local forest farmers	utilizing and protecting natural resources efficiently gaining relatively more income	high interests, medium power
Longquan Nengfu Afforestation Professional Cooperative	unifying the management right carrying out the FSC certification organizing the members to sell the timber with suitable price	high interests, high power

Interested Stakeholders

An interested stakeholder refers to any person, group of persons, or entity that has shown an interest, or is known to have an interest in the activities of a forest area.

• Zhejiang Nengfu Tourism Products Co., Ltd. buys the certified raw materials from the Nengfu Cooperative and produces the wooden products selling to western countries. Although a majority of certified timber is from the cooperative, the enterprise can find the other wood supply if the cooperative collapses.
• European, Australian and southeastern Asian markets are the principal exporting direction of beach umbrella from the Nengfu Enterprise, but the buyers can choose other products.
• Longquan Forestry Bureau or Forestry experts supported the establishment of Nengfu Cooperative and assisted the cooperative conducting the forest certification.
• "Smartwood" assessed the forestland of three villages making sure it meets the FSC standards and offers the FSC certification, keeping the sustainable development of forests. Meanwhile, the forest farmers can have a continuous benefit from the forest.

Interested Stakeholders	Relative Objectives	Power & interests
Zhejiang Nengfu Tourism Products Co., Ltd.	obtaining a stable supply of raw materials sustainably	high interests, low power
European, Australian and southeastern Asian markets	buying the beach umbrella	medium interests, low power
Longquan Forestry Bureau/ Forestry experts	assisting the forest certification of the cooperative	medium interests, high power
“Smartwood,” a certification authority accredited by FSC (NGO)	guaranteeing and maintaining the sustainable management	high interests, low power

Assessment

It is true that the establishment of Nengfu Cooperative brought numerous benefits in terms of local forest farmers, Nengfu Enterprise, community and natural environment. This co-management model of “enterprise + forest farmer households” with FSC certification is a novel form and has its advantages.

• For the local forest farmers, participating in the cooperative, they gain more income and obtain the ability to enter the market. First of all, in 2008, the cooperative increased its income by CNY960,000, and the members increased by CNY640,000. In addition, with the development of economic globalization, the market competitiveness of single-family farmers is quite weaker. Nengfu Cooperatives unites individual farmers and timber business and processing enterprise, so that farmers, cooperatives and enterprises form a community of “shared interests and shared risks,” improving the market competitiveness of forest farmers and protecting the interests of farmers. 
• For the enterprise, it has obtained a stable wood source and extended the wood processing industry chain. Like FSC certification in Mazagao and Swedish area, the Nengfu Cooperative FSC certified timber that is 30% higher than the price of non-certified wood, which improved the forest productivity and the competitiveness of the international market. Some members set up half-finished wood processing factories in Zhoutiao and Bilong Villages, becoming the production workshop and raw material supply base of the enterprise. The 10,000m³ of high-quality wood produced by the cooperative each year is supplied to the Nengfu Enterprise, which accounts for 70% of the company's annual wood consumption.
• For the community, Nengfu cooperative improves the organization degree of local forest farmers and enhances rural social harmony. After the establishment of the cooperative, a close-knit interest community has been formed, which has enabled farmers to move from single-family production to cooperative management. Also, driven by the demonstration of the Nengfu Cooperative, the Lishui City has more than 300 forestry cooperative organizations, with 12,000 members, and existing assets of CNY254.23 million, stimulating 88,000 forest farmers and connecting 710,400 ha of forestland.
• For the natural environment, the FSC certification achieves the sustainable management and preserves the High Conservation Value Forests. As long as the cooperative adheres to the FSC cater each year, the timber from forestland will be constant.

However, I can see several problems at present and in the future below that the enterprise-based cooperative will face.

• The decision-making mechanism is not transparent. Due to the fact that the enterprise dominates the cooperative's management, local forest farmers lack the involvement of the decision making. As an ordinary forest farmer, if he or she intends to express his or her idea, reporting it to the representatives is the only way, and the comment is unlikely to reflect at the member assembly.
• The validity of forest tenure is limited. It will be a major challenge for the cooperative to consider the valid period of forest tenure because the longest validity of forest tenure nowadays is 70 years in China. There is potential for the tenure to be re-allocated and transferred for the second time or more times with fluctuation in family size. This will complicate the stability of forest tenure, so influencing the existence of Nengfu Cooperative and sustainable forest co-management.
• The natural resources in the forestland of Nengfu Cooperative are restricted. In order to follow the FSC rules, the highest cutting amount of wood is restricted. If the enterprise continues to expand, the timber supply will be not stable again.

Recommendations

Aiming at the listed problems above, some recommendations for different stakeholders are demonstrated below.

• Forest farmers – They should enhance their cultural literacy of sustainable management, adapt to use the electric devices in the electric age, and actively participate in the decision-making process of the cooperative.
• Nengfu Enterprise – It should positively promote the relationship with local people so that the farmer’s offsprings will be likely to collaborate with the enterprise if the tenure changes after the longest validity. For instance, enterprises can provide favourable protection for members, such as pension insurance, and donated fertilizer. Besides, to handle the possibility of future expansion, the enterprise can engage more forest farmers in other villages in taking part in Nengfu Cooperative.
• Nengfu Cooperative – It should have a more democratic decision-making mechanism, so as to make each farmer have equal right to present suggestions and determine events. To be more specific, the cooperative can utilize social media like WeChat in China, to strengthen the connectivity between cooperative, enterprise and farmers. Also, the cooperative has the responsibility to train their members with well knowledge reserve of FSC certification. Lastly, more social insurance can be considered because now the cooperative subsidize CNY100 of medical insurance. Therefore, more local forest farmers are willing to join in or stay in the cooperative.
• Longquan government – As a higher authority, the government is supposed to delegate powers to lower levels and provide more support and assistance to the development of the cooperative. Government involvement in forest operations and certification are to be encouraged, especially in helping small forest managers popularize knowledge of forestry and forest certification, providing technical guidance, and coordinating among government, enterprises and forest farmers.