“Ecological bank” in China increases people’s income while promoting better development of forest resources

Since 2018, Nanping city, east China’s Fujian province, has piloted a project in Shunchang county in the city to explore “ecological bank”, an innovative model that integrates scattered and fragmented forest resources and puts them under the control of state-owned forest farm for better utilization and development through specialized operations.

Under the model, forest farmers are free to choose the ways in which they entitle the state-owned forest farm to the rights to manage, use, and develop their tree plots. They can become shareholders of the state-owned forest farm, rent their forest resources out to the farm, entrust the farm with the management and development of their resources, or simply transfer the ownership right of their trees and the contract and management rights of forest land to the farm.

Shunchang county is rich in forest resources, with 2.5 million mu (166,667 hectares) of forest land and a forest cover of 80.34 percent.

The “ecological bank” enables local forest farmers to deposit forest resources just like putting money into a bank account, and then earn guaranteed returns as well as dividends during the forest harvesting period, said Zhao Gangyuan, an executive with the state-owned forest farm in Shunchang.

Xiao Shuchang, a resident in Jixia village, Shunchang county, became a shareholder of the forest farm last year. “I ‘deposited’ 26 mu of forests in the ‘ecological bank’ last year. During the contractual period, I can get 1,800 yuan ($285) of dividends per mu of forest in advance and 80 percent of the profits from the forest lands with a production capacity of more than 10 cubic meters of wood per mu during the harvesting period, which means an increase of over one hundred thousand yuan in my income,” he said.

Since he “deposited” the 26 mu of forests in the special bank, Xiao has raised several hundred chickens in his forests, and his wife has also found odd jobs at a nearby industrial park, which brought the family a combined income of over 30,000 yuan by February this year. “I’m full of hopes of a better life,” Xiao said.

Starting from 2020, the first batch of contracts and management rights of forest land transferred by villagers in Jixia to the state-owned forest farm gradually expired. With the consent of farmers, the village “deposited” its 2,636 mu of collective forests in the “ecological bank”, allowing shareholders to enjoy guaranteed returns as well as dividends during the logging season.

As of the end of 2021, a total of 81,500 mu of forest land in Shunchang county had been incorporated into the state-owned forest farm, benefiting 2,510 farmer households and increasing the income of farmers by 594 million yuan.

Meanwhile, centered around its state-owned forest farm, Shunchang established a government-funded forest tenure guarantee company to provide financing guarantee services for forest-related enterprises, village collective ventures and individual forest farmers.

The forest tenure guarantee company has guaranteed 305 million yuan of loans, saving more than 15 million yuan in financing costs for forest farmers, according to Zhou Cuixia, an executive with the company.

In the future, the county will integrate more scattered ecological resources and establish a natural resource asset operation and management platform to promote the diversified development of the forestry industry.

The idea and operational mode of the “ecological bank”, while building a platform for farmers to turn forest resources into assets, can solve a multitude of problems, including the lack of rural labor force, idle forest resources, low forest management efficiency, and single forest management mode.

Through the integration of scattered resources and platform-based operations, the innovative model ensures the effective exploitation of forest resources, laying an underpinning for realizing ecological industrialization and promoting the high-quality development of forestry industry.