Impact of Land Tenure Security Perception on Tree Planting Investment in Vietnam

Abstract

With over 14 million hectares allocated, Vietnam’s forest and forestland allocation has been one of the largest natural resource decentralization programs in the developing world over the last three decades. Given this remarkable achievement, critics are concerned about the low rates of household tree planting investment and question the roles and effects of land institutions on investment. Using nested logit and ordered probit models, this study examined the effects of household perceptions of forestland tenure security on tree investment and the causal effects among 239 households in 11 communes in the Central Highlands. The findings suggested that, given the land titling in hand, household perceptions of potential land expropriation in the next five years did not thwart investments in both short-term acacia and long-term cashew horizons. The number of laborers, cost of plantations, off-farm and agricultural incomes, migrant status, soil condition, plot location, government subsidies, and a positive market outlook all played a significant role in this investment. Interestingly, we found that short-term tree planting had the reverse impact on decreasing land users’ perceptions of land tenure security, possibly because each tree rotation shortens the 50-year land use period recorded in the Land Use Right Certificate. However, market prospects and government subsidies may significantly counteract the negative perception of LTS and encourage households to plant trees. The policy implication is that, in addition to strengthening LTS to ensure households’ current and future land use rights, tree investment-incentivized policies should be implemented.