This article analyzes the form and the mechanism of non-public forestry's institution obstacles by classical economics, institution economics, legal economics and economic theories of modern forestry. Regarding the proprietary institution as the core, and cost-income as the main clew￡-it defines the concept and category of non-public forestry subsidy and compensation. And according to the relaxed control and efficiency principle of market economy￡-this paper establishes a set of institution that accords with the development of non-public forestry, offers both theoretical supports and decision making references to remove institution obstacles of non-public forestry, and coordinates the policies of non-public forestry with those of the public-owned forestry.