THE FIVE MILLION HECTARE REFORESTATION PROGRAM IN

VIETNAM: AN ANALYSIS OF ITS

IMPLEMENTATION AND ITS TRANSACTION COSTS

Huong Tran Thi Thu, Manfred Zeller, Hoanh Chu Thai

Introduction

Forest tenure has been changing in Vietnam Forestry programs:

PAM (the United Nations' Food Program) Program 327 (a nationwide reforestation

program) Regional reforestation programs

1998: the Five Million Hectare Reforestation Program (5MHRP)

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Research questions

What are objectives of the 5MHRP? How has the program been implemented? What are the roles of the different stakeholders in the implementation process?

What are the incentives and disincentives for farmers in the program?

How much are the transaction costs and benefits to the farmers when they participate in the program?

How to reduce transaction costs in implementation in forestry program?

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Map of study site4

Methodology (con’t)

Sample size: 39 interviews and 15 focus group discussions Province level: 2 interviews District level: 7 interviews Commune level: 5 interviews + 5 focus group discussions Village level: 25 interviews + 10 focus group discussions

Village headman: 5 interviews Community: 10 focus group discussions Household : 20 interviews

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Methodology(con’t)

Data collection Participatory Rural Appraisal Focus group discussions (guidance of semi-structure

questionnaire and the support of Net-Map tool) Individual in-depth interviews (guidance of semi-

structure questionnaire and the support of Net-Map tool) Informal communications Observations

Data analysis Data from focus group discussions and individual in-depth

interviews was transcribed and coded by Nvivo in order to be grouped to content and thematic analysis.

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Typology of contracts in the 5MHRP7

Contract type

Name of contract Duration (year) Contract target

Protection forest

Type 1 Plantation of new forest and protection of planted forest

9 Individual household

Type 2 Zoning for protection of natural forest 5 Village community

Type 3* Zoning for regeneration and protection of natural forest

6 Individual household

Production forest

Type 4 Plantation of new forest 1 Individual household

(*): was not implemented in selected communes

Command and money flows in the 5MHRP

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Provincial People’s Committee

Provincial Projects Management Board

District Management Board of Protection Forest (MB1)

Management Board of Nature Conservation Areas (MB3)

Management Board of Da river Protection Forest (MB2)

Provincial Executive Committee

Household/Community

District Treasury

Provincial Treasury

Seedling company

District Agroforestry Extension Department

Command flow

Money flow

Transaction costs days for five communities

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Village Natural forest area (ha)

Total TCs(labor day)

TCs per ha (labor day)

Start-up costs

(% of total TCs)

Variable transaction costs (% of total TCs)

Regular meetings

Self-monitoring

Conflict resolution

Joining monitoring

and verification

Co1 179 1.317 7.4 2.9 23.4 68.4 4.0 1.3

Co2 11 76 6.9 23.1 64.5 7.4 0.0 5.0

Da1 330 690 2.1 3.8 24.9 70.8 0.0 0.5

Da2 31 263 8.5 10.3 68.1 19.0 2.4 0.2

Da3 180 226 1.3 7.0 78.4 11.6 1.9 1.1

Average 146.2 514 5.2 4.9 34.4 57.2 2.5 1.1

Transaction costs days between individual and community contracts

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Individual Community0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0.4 4.90.8

34.4

97.6

57.2

0.2 2.5

The share of transaction costs between individual and community contracts

Joining monitoring and verificationConflict resolutionSelf-monitoringRegular meetingsStart-up costs

Contract type

Benefits per hectare per year of forest management

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BenefitCommunity contract Individual contract

Value (US$) Share (%) Value (US$) Share (%)

Government monetary subsidy 6.85 17.9 66.7 16.1

NTFPs 31.48 82.1 260.5 62.7

Auxiliary trees extraction - -

88.2 21.2

Total benefit 38.3 100.0 415.4 100.0

Benefits and Costs of forest management for five communities

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Co1

Co2

Da1

Da2

Da3

- 10,000.0 20,000.0 30,000.0 40,000.0

32,500.2

4,141.5

32,047.5

7,280.3

12,309.6

22,006.8

1,372.2

9,915.2

2,993.1

1,905.2

Benefits and costs for five communities

Costs Benefits

Costs and benefits in US$

Com

mu

nit

ies

NPV per hectare per year between individual and community contracts (in US$)13

Village Community contract

Individual contract

Of which

Household planting woody trees - acacia

Household planting woody trees - bamboo

Co1 11.7 315.9 104.9 456.5

Co2 50.3 315.4 278.7 339.8

Da1 13.4 289.7 156.8 334.0

Da2 33.1 77.0 77.0 -

Da3 11.6 - - -

Average 24.0 267.4 144.4 376.8

Conclusions14

The diversity of informal institutional arrangements resulted in the big variation of transaction costs in our studied areas

The extent of transaction costs was relatively large for households. Community contract: regular meetings (34%) and self-monitoring

(57%) constituted a large proportion of the total transaction costs; Individual contract: self-monitoring (98% of total TCs) Costs for conflict resolutions and for participating in official

monitoring and verification are relatively small for households in both types of contract

The NPV per hectare per year was higher for households under individual contract than for those under the community contract

Recommendations15

High transaction costs incurred by households can become a barrier to participate in an environmental

management program might lower the real benefits obtained by households

A higher government subsidy would be needed to match the amount given out under the individual contract;

To increase the payment under individual contract to achieve a higher quality of planted forests with more woody trees

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Thank you for your attention!