Impact of decree no 135 2005 ND CP on production and business results of dong bac forestry company lang son

135/2005/ND-CP ON PRODUCTION AND BUSINESS RESULTS OF DONG BAC FORESTRY COMPANY, LANG SON Major: Advanced Curriculum in Natural Resources Management Code: D850101 Faculty: Forest Re

MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT

VIETNAM FORESTRY UNIVERSITY

STUDENT THESIS

IMPACT OF DECREE NO 135/2005/ND-CP ON PRODUCTION AND BUSINESS

RESULTS OF DONG BAC FORESTRY COMPANY, LANG SON

Major: Advanced Curriculum in Natural Resources Management

Code: D850101

Faculty: Forest Resources and Environmental Management

Student: Do Nhu Trung Duc Student ID:0953010142

Class: K55 Natural Resources Management Course: 2010 – 2014

Advanced Education Program

Developed in Collaboration with Colorado State University, USA

Supervisor: Dr Do Anh Tuan

Hanoi, October 2014

LIST OF TABLES, CHARTS

1 Summary of annual land use (forest produce in the first year) of the Company in Huu Lung district period 2007-2013

LIST OF CHARTS

1 Current status of Company’s forests in Huu Lung district in 2006

2 Current status of Company’s forests in Huu Lung district in 2013

LIST OF DIAGRAM

LIST OF PICTURE

LIST OF ABBREVIATIONS

MARD Ministry of Agriculture and Rural Development DNRE Department of Natural Resources and Environmental

ACKNOWLEDGEMENTS

I would never have been able to finish my thesis without help from friends, and

support from my family and girlfriend

I would like to express my deepest gratitude to my supervisor, Dr Do Anh Tuan, for his excellent guidance, caring, patience, and providing me with an excellent atmosphere for doing research

I would like to thank my classmates, who always willing to help and give their best suggestions Many thanks to officer in the Dong Bac Forestry Company for helping me collect the data My research wouldn't have been completed without their helps

I would like to thank my girlfriend She was always there cheering me up and stood

by me through the good times and bad

Finally,I would also like to thank my parents and younger brother They were always supporting me and encouraging me with their best wishes

TABLE OF CONTENTS

LIST OF TABLES, CHARTS

LIST OF CHARTS

LIST OF DIAGRAM

LIST OF PICTURE

LIST OF ABBREVIATIONS

ACKNOWLEDGEMENTS

TABLE OF CONTENTS

CHAPTER I INTRODUCTION 1

1.1 Problem 1

1.2 Limitation of topics 2

CHAPTER II OBJECTIVES AND METHODS 4

2.1 Objectives 4

2.1.1 Overall objectives 4

2.1.2 Specific objectives 4

2.2 Research Methodology 4

2.2.1 Survey methods to collect data 4

2.2.2 Method of processing and data analysis 5

CHAPTER III RESEARCH AREA 6

3.1 Natural conditions, socio-economic of research area 6

3.2 Formation history and the main manufacturing jobs, business of the Company 8

3.2.1 Formation history 8

3.2.2 Functions and duties and business lines of the Company: 9

Chapter IV RESULTS 10

4.1 Results of implementing the Decree No 135/2005/ND-CP 10

4.1.1 The organizational structure of the Company and current use of land in Huu Lung

district before implementing Decree No 135/2005/ND-CP 10

4.1.2 Time for implementation of Decree No 135/2005/ND-CP 11

4.1.3 The sequence of steps to implement Decree No 135/2005/ND-CP 11

4.1.4 Results of implement the Decree No 135/2005/ND-CP 13

4.2 Impact assessment 20

4.2.1 Impact on the density of land use structure 20

4.2.2 Impact on the management and land use of Company in Huu Lung district period 2006 - 2013 21

4.2.3 Impact on structure management and labor structure 21

4.2.4 Impact on business efficiency 22

4.3 Advantages, difficulties and challenges after 7 yearsimplementation of Decree 135/2005 / ND-CP 24

4.3.1 Advantages 24

4.3.2 Difficulties and challenges 25

CHAPTER V CONCLUSIONS, SUGGESTIONS AND RECOMMENDATIONS 27

5.1 Conclusions 27

5.2 Suggestions to the Company 28

5.3 Recommendations to the State agencies in competency 29 REFERENCE

CHAPTER I INTRODUCTION

1.1 Problem

To improve the efficiency in business of enterprises in general and businesses operating in the forestry sector in particular, the Party and State have issued a number of mechanisms and policies in the fields of: Organization, management enterprises, management of production materials, forest business management, financial investment, tax policy, credit policy, land use management, etc.Decree No 135/2005/ND-CP of November 8, 2005 of the Government on the contractual assignment agricultural land, forest land and produce water surface for aquaculture in State Farm, SFE is one of the main goals of this order:

i, Use effective and sustainable land, forest and water resources

ii, To raise capital, labor of contracted party, in order to improve production efficiency, the business of the State Farm, SFE

iii, Ensure harmony of interests between contracted party, the contracting party and the State; create jobs for workers, contributing to hunger poverty reduction, security and defense in the locality

Thus, the contractual assignment agricultural land, forest land and produce water surface for aquaculture followDecree No 135/2005/ND-CP, which affect many objects, many social sectors, particularly directly impact on business results of enterprises

Dong Bac Forestry Co., Ltd Single member (hereinafter referred to as Dong Bac Forestry Company) is enterprises that 100% charter capital belong to State, is a member unit of the Forestry Corporation Vietnam Production area of the Company are located in 3 provinces: Thai Nguyen, Lang Son and Bac Giang Main manufacturing jobs of

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Companyare management, protection, construction and development of forest resources; logging, wood processing and trading some other services serve people's daily lives Total natural area that Company assigned to management is 21.825 ha In which 19.720 ha of agricultural land (19.713 ha of forestry production, agriculture land 4,48ha); 932 ha of non-agricultural land, unused land 1.172 ha

To implementation of Decree No 135/2005/ND-CP dated November 8, 2005 of the Government on the contractual assignment agricultural land, forest land and produce water surface for aquaculture in the State Farm, SFE, as soon as the MARD issued Circular No 102/2006/TT-BNN in November 13, 2006 to guiding the implementation of Decree No 135/2005/ND-CP, Dong Bac Forestry Company conducted to implementing organizations,

in December 31, 2013 the Company has done in contracting 2.740 ha of forest land, accounting for 84,6% of the total 3.241 ha of forest land are manage by the Company

To assess the impact of Decree No 135/2005/ND-CP, which found the positive side, the limited side to proposing additional, reasonable adjustments need to be summarized and evaluated overall for the area falling within the scope of regulation and subjects of application of the decrees of all levels and departments, I chose the research topic "Impact of Decree No 135/2005/ND-CP on production and business results of enterprises' desire to contribute for the review, the overall assessment, as the recommendation to the State agencies competent to supplement, modify or propose policy with enterprises the specific adjustments during implementation decrees in order to achieve the set goals

1.2 Limitation of topics

In the framework of University thesis, topic research focuses on the following issues:

- Research in Dong Bac Forestry Company in Huu Lung district, Lang Son Province

- Research on the allocation forest land for production follow Decree No 135/2005/ND-CP

- Research on the impact of land use contracting to the Company's business efficiency, specifically in the area of:

+ Impact on organization management structure

+ Impact on the autonomy in production

+ Impact on the stability in production

+ Impact on business result

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CHAPTER II OBJECTIVES AND METHODS

2.1 Objectives

2.1.1 Overall objectives

Assess the impact of policies contracted production forest land (Decree No 135/2005/ND-CP) for Dong Bac Forestry Company's business results and propose some solutions in order to implement effective Decree No 135/2005/ND-CP of the Government

2.1.2 Specific objectives

- Assess the implementation of Decree No 135/2005/ND-CP and the current status

of the management and land use in the Dong Bac Forestry Company

- Assess the impact of Decree No 135/2005/ND-CP on the efficiency of production and forest business of the Company, specifically in the area of: Organization of the management and the autonomy in production, stability in production and efficiency in business plans

- To propose some solutions to improve the efficiency of production and business when performing the allotment of forest land followDecree No 135/2005/ND-CP

2.2 Research Methodology

2.2.1 Survey methods to collect data

- Collects information about the natural conditions, socio-economic welfare of research area

- Research allotment land records of the Company

- Collect data on the current use of the land, the results of the production plan (stitch forest), forest business results from 2006 to 2013 in the units of Company at Huu Lung district, Lang Son province

- Interviews with Company officials about the advantages and difficulties in the process of organizing production and efficiency in the forestry business of the Company after 7 years of implementation of Decree No 135/2005/ND-CP

- Analysis of data, visually surveying, assessing and making recommendations

2.2.2 Method of processing and data analysis

- Using a statistical method, comparative data and set the charts to analyze and evaluate

- Interviews with experts to complement the assessment review

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CHAPTER III RESEARCH AREA

3.1 Natural conditions, socio-economic of research area

Dong Bac Forestry Company is headquartered in Huu Lung District, Lang Son Province, which geographical area: East border with Luc Ngan district of Bac Giang province, west and southwest border with Yen The district, Bac Giang province, southern border with Luc Nam district and Lang Giang district of Bac Giang province, north east border with Chi Lang district, Lang Son province, Northwest border with Vo Nhai district, Thai Nguyen province

Picture 1: Research area

Area of the project area is located in the transitional terrain between midland and mountainous, mostly low ridge system that runs from west to east forming successive hills, with the average elevations about 100m to 150m over sea level, average slope about 180 to

250, interspersed with hills is patches of field, ponds and lakes Terrain conditions are more favorable for forestry production, agriculture, intensification of forest trees and agroforestry implementation

- Average annual rainfall is 1.420 – 1.540 mm

- The average annual temperature is 22,50C, maximum temperature is 39,50C, minimum temperature from 1,10C to 50C (in mountainous area)

- Each year is divided into two seasons:

+ Rainy season: From April to October, concentrated mainly in May, June, July, August

+ Dry season: From November to March the following year

- Average annual humidity is 82%, maximum 96%, minimum at 61%

- Wind regime: Trendy 2 main winds directions are Southeast and Northeast Southeast monsoon occurs during the rainy season, which lasts from April to September; northeast monsoon occurs during the dry season lasts from October to March Also appeared frost in January

Population in the region is mainly composed of ethnics: Kinh, Tay, Nung, Cao Lan, San Chi, mostly hard life, poor life, livelihood mainly by agriculture (farming, cultivation), generally the result of cultivation depends on natural, agricultural land is limited and low productivity Ratio of redundant workers, unemployment is still relatively high

Enterprise On January 23, 1996, the MARD issued Decision No 74/NN-TCCB/QD on the reorganization of the units attached the Union of pit props Enterprise to Northern forest materials Company On January 20, 1999, the MARD issued Decision No 232/QDBNN-TCCB about renamed Northern Forests material Company to Dong Bac Agricultural and Forestry Company Implementation of Decree No 95/2006/ND-CP of September 8, 2006

of the Government about converted the Company of State into Co, Ltd single member, and Decision No 298/QD-TTg in March 12, 2007, the Prime Minister approved a plan arrangement, innovation and enterprise development follow the MARD in 2007 – 2008, Dong Bac Agricultural and Forestry Company converted into Dong Bac Forestry Co., Ltd Single member follow Decision No 786/QD-BNN-DMDN March 13, 2008 of the MARD

Before 2007 the organizational structure of the Company include: the Office of the Company and units follow the Company Units follow the Company: 5 SFE, 2 Forestry Station, 3 Factory services and 1 Station of seedling production

Now the organization structure of the Company include: the Office of the Company and units follow the Company: 8 affiliates, 6 production teams and 1 Station of seedling production

In Huu Lung district, the Company has an Office and 7 units follow the Company:

5 Production teams, 1 exploitation team and 1 Station of seedling production; total number

of labor are 41, total area of land allocated follow the profile is 13.272 ha

3.2.2 Functions and duties and business lines of the Company:

* Functions:

- Management land reserve allocated by the State, protection, management, construction and development of forest resources

- Application of advanced techniques in forestry production

- Provision of plant varieties, supplies services business techniques and life

- International cooperation in the forestry business and processing of forest products

* Lines of business

- Management and protection, construction and development of forest resources

- Production, purchase and sale of Agricultural and Forestry products

- Mining, processing of wood and wood products

- Some other services

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Chapter IV RESULTS

4.1 Results of implementing the Decree No 135/2005/ND-CP

4.1.1 The organizational structure of the Company and current use of land in Huu

Lung district before implementing Decree No 135/2005/ND-CP

Total natural area allocated by the State Company in Huu Lung district, Lang Son province is 13.272,27 ha, including: Farmland: 13.270,13 ha (forestry production: 13.256,13 ha; other farm: 14 ha); Non-agricultural land: 2,14 ha The total area of land use (forest land) 31/12/2006 in Huu Lung district: 3.017,41 ha, of which: State-owned Forest: 2.315,62 ha, accounting for 76,7%; assigned forest land area by Decree 01/ND-CP: 701,79

ha, accounting for 23,3%

Chart 1: Current status of Company’s forests in Huu Lung district in December 31, 2006

76,7%

23,3%

Current status of company’s forests in 2006

State-owned Forest Assigned forest land area by Decree 01