China is set to promote a household contract system in the management of collective forestry land and ownership of wood nationwide. This is seen as an important reform to boost the enthusiasm of farmers and increase their income.

The system comes into effect immediately, and has been recognized as another milestone in the country's transformation of rural relationship of production after it adopted the system for collective farmland more than two decades ago.

In the reform, production and management of forestry would be entrusted to farmers through 70-year contracts, while the nature of collective ownership should remain unchanged, according to a State Council statement on Monday.

The reform aims to get farmers more involved in the planting and growing of trees, inspire their production initiative, increase their income and promote a conservation culture, it said.

It called for ensuring equal access to operating rights among farmers and guaranteeing their rights to know, to participate in and their rights in the decision-making process.

Users of the forestry land could transfer, lease or mortgage the land using rights within the tenure, the statement said.

Financial institutions should extend services to the forest farmers and speed up the establishment of forestry insurance to protect the farmers from natural disasters, it said.

The government planned to complete the reform in five years and form a sound development mechanism for collective forests based on the reform, it said.

The system has been implemented in Fujian, Jiangxi, Liaoning and Zhejiang provinces since 2003, with 878 million mu (58.5 million hectares) of collective forestry land contracted to farmers.

The trial has turned into a win-win situation -- farmers were getting richer and the forests received better protection.

In Jiangxi Province, which implemented the system in 2004, farmers' earnings from the forestry industry grew 41 percent year on year in 2005, while the forest area hit a record high of 3.3 million mu, which was expected to top five million mu this year.

The practice of the household contract system for collective farmland was initiated by a group of farmers in a small village in the central Anhui Province in 1978.

The system was adopted nationwide later, helped boost the country's agricultural production and made the 1.8 billion mu of farmland able to feed its 1.3 billion population.

The government expected the system to work again for the collective forestry land, promote the development of forestry industry and improve living standards of the farmers, according to the statement.

China has 2.55 billion mu of forestry land under collective ownership, accounting for 60 percent of the country's total. More than half of its population live in these areas.

As one of the country's pillar industries, the forestry industry realized an output of 1.17 trillion yuan (US$167.1 billion) last year, up 9.85 percent year on year.

(Xinhua News Agency July 15, 2008)