During the restructuring of the Vietnamese economy in 1986, the Communist party of Vietnam (CPV) took the decision to leave central planning and build a market economy in Vietnam. In order to promote rural development and deal with deforestation, poverty and declining agricultural profitability, the government implemented the forestland allocation policies (FLA) and started a process of decentralization. This research note examines the impact of FLA policies on the agricultural practices of an upland community in central Vietnam and discusses the effects of increased tenure security. It is shown that the promotion of a sedentary production system has altered the sustainability of swidden agriculture leading to declining profitability and that a transition towards new crops and specialized crop cultivation has compensated for the loss. Furthermore, it is argued that the FLA policies have increased the villagers’ incentive to invest, their access to credit and the forest area of the village, but that the CPV has been the main driver of these changes rather than the increased tenure security.