Forestry policy plays a significant role in forestry development in market mechanism.This paper sets up a policy simulation model which is integrated of forest industry,forest cultivation and timber production,and it is used forestry economic welfare as objection function based on market mechanism,and also uses the model to analyze the effect of forest policy instruments such as price,tax and subside,interest rate and cutting quota,at last it finds out some conclusions which the adjustment of forest policy is how to have an effect on policy target of the economic welfare and discusses several relative problems.