Forestland Allocation in Vietnam: An Economic Analysis

Summary

Following an exhausted decade of centrally planned economy, the Vietnam’s 14-million-hectare forestland allocation (FLA) to recipient entities, including millions of upland households, is one of the largest land decentralization programs in the developing world. However, the policy has been controversial. Through a comprehensive investigation, this study found that the low-cost and hasty formulation and implementation of the FLA policy to households, despite yielding unintended outcome and impact, laid an important foundation for subsequent household economic development, especially during later decades of continuous economic growth. While many households abandoned the land they received, a proportion of households took advantage of market prospects and government support, neglecting land tenure insecurity, to plant trees. Despite the overall impact on improving welfare and poverty alleviation for mountainous households, the impact on the poorest group remains modest. The study proposes policy recommendations to move the FLA forward, including the promotion of tree contract-farming.