For a long time, difficult, expensive, and short-term financing has been a bottleneck restricting the development of forestry. Recently, the People’s Bank of China, the National Financial Regulatory Administration, and the National Forestry and Grassland Administration jointly issued the Notice on Financial Support for High-Quality Forestry Development, introducing 15 specific measures to open up the conversion channel from “ecological product value” to “economic development benefits.” This not only injects financial vitality into forestry development, but also makes the path of “lucid waters and lush mountains are invaluable assets” clearer and more practical.
In the past, when it came to forestry financing, many tree growers and forest farm operators felt troubled. Forests are “green treasures,” but in the eyes of banks, they are not visible and tangible collateral like factory buildings or machinery. A typhoon or pest outbreak could wipe out previous investment. Forests also have long growth cycles, ranging from more than ten years to several decades, while loan terms often fail to match these cycles. These difficulties made financial institutions more cautious about forestry loans and caused many promising afforestation plans to be shelved due to a lack of funding.
Today, this situation is being changed through innovation. For example, banks are no longer looking only at the physical facilities of forest farms, but are also paying attention to the amount of carbon dioxide that forests can absorb in the future. Through professional assessment, these originally intangible ecological values can be converted into specific economic value. Insurance is also beginning to provide protection for forestry. On January 1, 2024, China’s first carbon sink insurance for forestry management in soil erosion areas was launched in Changting County, Fujian Province, providing RMB 13 million in carbon sink loss risk protection for 3.89 million mu of forestry management resources in Changting’s soil erosion areas.
Behind these changes, policy is actively playing a bridging role. The Notice issued by the three departments further strengthens financial support for forestry. For example, it expands the scope of forest rights that can be used as collateral, encouraging young timber forests, moso bamboo forests, fruit trees, facility flowers, seedlings, and other assets to be included as collateral. It also promotes innovative financial support models for the development of the under-forest economy, focusing on credit services for industries such as forest fungi, forest medicinal herbs, forest vegetables, forest poultry, forest bees, and forest wellness. It also encourages the lawful and compliant extension of loan terms and steadily promotes revolving credit loans that combine farmer credit evaluation with forest rights mortgages. In this way, enterprises and farmers are more willing to invest in forestry, forming a virtuous cycle in which policies build the platform, banks provide support, enterprises take action, and the public benefits.
However, there are still challenges to overcome before “green assets” can smoothly turn into real economic value. The Notice also highlights the need to accelerate the improvement of supporting policies and guarantee mechanisms. By establishing standards, clarifying pathways, and providing stronger support, higher-quality innovation, stricter management, and more solid safeguards, policies can become effective measures that benefit both the country and the people.
The more forests are planted and the better they grow, the fresher the air becomes and the more stable the soil and water are. Everyone can enjoy a better ecological environment. When tree growers can earn income through financial support, they will have greater motivation to protect and plant forests. Over time, this can create a positive cycle of “the more forests are protected, the more income is generated; the more income is generated, the more forests are protected.”
With the implementation of the Notice and innovative practices from all parties, more “dormant assets” are expected to be activated in the future, making lucid waters and lush mountains not only ecological wealth, but also real economic wealth and a source of well-being that every household can enjoy.
Source: People’s Daily Online