I
Taiwan has a total area of 35,960 square kilometers. High mountains stretch from north to south covering all the eastern and a large part of the central regions of the island. Over 60 per cent of the total land area is mountainous and of little value for agricultural uses. Only the western part is plain land with fertile soil. Of this plain land, 870,632 hectares or 24 per cent of the total land area are cultivated. Among this cultivated land 530,632 hectares, or 61 per cent, are paddy field; 340,367 hectares, or 39 per cent, dry land.1
The most important farm crop in Taiwan is rice, for which more than 60 per cent of the total cultivated land is being used. In 1950, 1,420,000 metric tons of rice were produced. This was more than enough to feed the whole population of the island. Next to rice is sugar cane which is cultivated in southern Taiwan. More than 12 per cent of the cultivated land is devoted to this crop. About 620,000 metric tons of refined sugar were produced in 1950. Sugar is the most important export commodity and plays an indispensable role in the Taiwan economy. Other important farm crops are sweet potatoes, bananas, tea, pineapples, jute, peanuts and citrus fruits.
The population of Taiwan has been increasing rapidly. In 1900 the total population was only 2,750,000 while at the present time it is 7,686,000. It has increased nearly threefold within half a century. Of the 7,686,000 inhabitants the farm population constitutes 60 per cent. The percentage distribution of farm tenancy is as follows: owner-operators 35 per cent, part-owners 26 per cent, and tenants 39 per cent.2 About 56 per cent of the total farm land is under tenant operation. The average holding of each farm family is 1.3 hectares; and over 34 per cent of the farms are under 2 hectares.3 As a result, intensive cultivation has been pushed to a very great extent. Even so, the small farms can hardly provide an acceptable standard of living for a family of six.
II
The tenant condition in Taiwan before rent reduction was very bad. Rents were approximately 50 per cent of the crop. In addition, the tenants had to furnish their own fertilizers, farm equipment and farm buildings. They had no security of tenure. It depended very much upon the good will of the landlord. Coupled with the small acreage they cultivated, it was extremely difficult for them to make both ends meet. The net result was discontent and unrest. Determined to correct this situation, General Chen Cheng, now Premier of the Chinese National Government in Taiwan, instituted a rent reduction program in early 1949. He did this with the active co-operation and assistance of the Chinese-American Joint Commission on Rural Reconstruction.
Under the rent reduction program a maximum rent payment is fixed at 37.5 per cent of the annual main crop yield on the farm. However, I must make it clear that our scheme has nothing to do with actual harvest. We fixed a standard yield for each grade of land in advance. In Taiwan we have a complete set of land cadastral records which classify all farmlands into twenty-six grades according to soil fertility and productivity. This enables the land, commission in each locality to figure out their standard yields. With the standard yields clearly fixed, it is a simple matter to find out how much rent a tract of land should pay according to the new reduction rate. Let me give you an illustration. Suppose there is a tenant who rented one hectare of a fifth grade paddy field. Its standard yield is fixed at 10,000 catties of rice. Formerly the tenant had to pay 50 per cent or 5,000 catties of his rice crop to his landlord. Under the rent reduction program he pays no more than 37.5 per cent or 3,750 catties regardless of whatever amount he actually harvested.
The results of Taiwan rent reduction program can be explained in several ways. In the first place, the tenants' income has been increased. Previously, few tenants could fill up their daily rice bowls. After rent reduction, they had not only enough rice to eat but also surplus to sell in exchange for other necessities. Our field inspectors frequently overhear the people joking about "37.5 per cent houses", "37.5 per cent buffaloes", and "37.5 per cent weddings", etc. To us these are compliments.
Furthermore, the rent reduction program has also encouraged farm production. Since farm rent has been regulated, tenants now enjoy the full portion of any increased production over their maximum rent payments. As a result, rice production is increasing yearly. For example, the rice production before rent reduction was only 1,068,000 metric tons. In 1949, one year after the reform, the production was increased to 1,214,500 metric tons. In 1950, it went up to 1,421,000 metric tons. This year, 1951, an estimate of 1,500,000 metric tons is expected. Other factors might have contributed to the increase, but rent reduction certainly is an important one.
"Finally, the rent reduction program has made the tenant farmers more secure. For under the present program there is a provision that fixes the lease tenure at six years. This is an improvement and is all for the tenants' benefit.
However, the program we carried out in Taiwan was not entirely free from difficulties. When the program was well under way there came complaints from the landlords. They protested that the land classification upon which the standard yields were based was inaccurate. They asked the government to revise it. This demand, if fully accepted, would have required the government to undertake an over-all land re-classification, and the rent reduction program which had been carried out would have been done away with. The landlord’s complaint was exaggerated, as was revealed by a careful re-examination of the problem.
Another problem was the effort of the landlords to evade the reform. The major form of evasion was that the landlord forced the tenant to terminate the lease before its expiration but termed the act of termination as voluntary. One year after the program was initiated, there arose a total of about 10,000 cases of such lease termination. Besides, there were also other types of evasion. For instance, some landlords made an agreement with the tenants that the latter pretended to be the hired laborer of the former. In so doing, the landlords were freed from the restrictions of the rent reduction program. Or in some cases, the tenant agreed to buy the rented land and sell it to other persons at a higher price for the landlord. The two parties would subsequently share the difference of the price over-sold. Also, there were cases where the landlord simply refused to reduce the rent.
To deal with the situation, the government instituted a rigid supervision program on a regional basis and employed regular rent inspectors to investigate and settle the matters according to the following principles. First, forced termination of lease must not be allowed and land must be returned to the original tenant. Secondly, refusal to reduce rent must be prohibited. Thirdly, evasions of other nature must be settled either by mediation on the principle that land should be tilled by actual tillers. Fortunately, all the attempts of evasion as mentioned above were stopped in time and the program has been successfully carried out.
III
With the rent reduction work still being carried on in Taiwan, the Chinese National Government on the Island inaugurated this year a program to sell the public land to tenant farmers. In Taiwan there are about 180,000 hectares of public land which comprise about one-fifth of the total cultivated area of the Island. Of the vast public holdings, two-thirds, about 120,000 hectares, are operated by the Taiwan Sugar Corporation. The rest is administered by the Taiwan Salt Corporation, Provincial Department of Agriculture and Forestry, Provincial Bureau of Social Affairs and the Taiwan Land Bank. Besides, there is also a part of the public land rented out directly to tenant farmers by the local governments. Of the land operated by the Taiwan Sugar Corporation, 59,000 hectares are under direct operation of the Corporation and the rest is under tenant operation. The rental rate on these tenant operated lands is 25 per cent of the annual main crop yield.
In planning further land reforms, the Provincial Government in Taiwan has decided to sell part of the land to tenant farmers retaining the part which is necessary for the operation of government enterprises, including sugarcane production by the Sugar Corporation. The Provincial Government has promulgated a set of rules governing the sales procedure of public lands, which was approved by the National Government in May 1951. The rules consist of the following features: (1) The present tenant farmer shall have priority to purchase the land he tills, (2) each tenant family may purchase one half to two hectares of paddy field or one to four hectares of dry land, (3) the purchase price is 2.5 times the total annual main crop yield of the land purchased and shall be paid in 10 annual installments, and (4) each annual installment payment, including land tax, shall not exceed 37.5 per cent of the annual main crop yield.
This public land sales program has been in operation since July of this year. The total acreage for sale, for the time being, is 86,000 hectares, of which 36,000 hectares are allocated as the first batch for sale and 50,000 hectares as the second. This total acreage of 86,000 hectares represents 18.4 per cent of the total tenanted land on the Island. A total of about 100,000 tenant families will benefit by the program. This figure represents 16 per cent of the total farm families on the Island. This program, once completed, will greatly aid the government in speeding up steps for requiring the landlords to sell their surplus land.
After the completion of the public land purchase program, there will be a law to limit private land holdings. The government anticipates purchasing the excessive private land holdings and selling them to tenant farmers as a means of enabling them to become owners of the land they till. The Chinese Government in Taiwan is now preparing a preliminary draft of the program. The main points in this program are roughly as follows:
1. To undertake an island-wide survey of present land holdings in order to ascertain the actual conditions of land distribution at the present time to serve as the basis for making a land ownership and land use inventory of the whole Island.
2. Landlords shall be permitted to retain one hectare of paddy field or two hectares of dry land as the maximum retention acreage of a landlord's family. Excessive acreage over this maximum retention acreage shall be purchased by the Government and re-sold to tenant farmers.
3. Purchase price shall be fixed at 2.5 times the annual main crop yield on the land.
4. Compensation for the land shall be made partly in cash, partly in bonds which are redeemable in kind within ten years, and partly in stocks of government enterprises; and the ratio shall be fixed according to the acreage of land sold.
5. The annual installment payment of land price, including land tax, by the tenant purchaser shall not exceed 37.5 per cent of the annual main crop yield.
This program shall be initiated as soon as it becomes a national law. The land holding survey program which provides the technical basis for implementing this program is already under way with financial and technical aid from the Joint Commission on Rural Reconstruction. It will be completed within a period of six months. As for the land purchase program as a whole, we are very hopeful because the rent reduction program has created certain favorable conditions for it. Right now, we have already witnessed a drop in land prices and the weakening of the landlord's desire for land ownership.
The above statement represents a brief presentation of the steps of land reform as exemplified by the rent reduction already carried out and the land purchase program now being undertaken. All these measures have been designed after careful study and implemented with a systematic procedure with the aid and encouragement of the Joint Commission on Rural Reconstruction. In general, they represent a sustained program of reform which began with rent reduction, proceeds to land holdings limitation, and ends with tenant's land purchase. The final goal is to build up a family farm system as the mainstay of an improved agriculture, a stronghold against Communism and a nursery of democracy.
*Paper presented before the Conference on World Land Tenure Problems, University of Wisconsin, Madison, Wisconsin, U.S. A., November 2, 1951.
1. Taiwan Agricultural Year Book, 1951 Edition, Page 8.
2. Ibid., p. 27.
3. Report of investigation on ownership and operation of arable land, Department of Agriculture & Forestry, Taiwan Provincial Government, p. 13.