Farming trees: China's new cash crop
China's top leaders spent the first two days of this week at the country's first ever foresty conference, discussing measures to push forward reforms in the sector.
Over the last decade, China has launched many reforestation campaigns aimed at halting desertification, sandstorms and acting as a counter balance to the country's soaring carbon emmissions.
But now the agenda is moving away from an environmental one to an economic one, with flailing reforestation campaigns being cancelled in favour of small-scale commercial forestry.
Being the world's largest producer of furniture and second-largest producer of paper and wooden flooring, China has a great deal of demand for timber. According to predictions, the country may face a shortage of 110 million cubic meters of wood by 2010.
The majority of China's population are small-hold farmers, who find it difficult to make money on grain production due to low food prices. Many would have gone to coastal provinces to work in factories. But now with less jobs and lower pay many workers are returning home.
Small-hold foresty is the solution being touted by the government, which beleives the rural masses can make more money by selling trees than selling rice.
The reforms to enable this were made last year, when China decided to rent collective forestry land to farmers for as long as 70 years, now known as “the third land reform”.
The conference this week aimed to solve the problems of fund-raising, insurance and land rights transfer for farmers.
Perhaps as a result of anticipated competition from millions of small-hold farmers, shares in Chinese forestry companies have dropped.
Fujian Yongan Forestry Co. (SZ:000663）slid 0.47 perce nt，Shandong Huatai Paper Co.,（SH:600308）advanced 3.10 percent. Minfeng Special Paper Co.（SH:600235）climbed 1.24 percent, Guangming Group Furniture Co.（SZ:000587）added 4.97 percent. Sino Forestry (TSX: TRE)lost 2.34 percent.
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