Taiwan Today

During the Japanese occupation, major emphasis in agricultural development was placed on the increase in production of exportable farm products needed in Japan, especially rice and sugar. Since the restoration of Taiwan to China in October, 1945, the Chinese Govern­ment has been making great efforts to promote the economic prosperity of the island by a balanced development of agriculture and industry. Agriculture and industry are interrelated as industry provides agriculture with goods and ser­vices needed in agricultural production, or undertakes the processing of its products. However, agriculture has been the most important source of employment and national income, and Taiwan's economy is still predominantly agricultural.

National income consists of net domestic national product and net income from abroad. The net domestic national product covers the net production of crops, forestry, fisheries and livestock, in addition to that of mining, manufacturing, electricity, water and gas, construction and building, and the net service of transportation and distribution of goods, etc. According to statistics compiled by the Comptroller-General of the Executive Yuan, the aggregate value of the net production of crops, forestry, fisheries, and livestock accounted for about 30% of the total national income, or 55% to 60% of the net domestic production in the last few years, surpassing the income derived from any other category of production. Table 1 shows the percentage of agricultural production in the net output of goods and in national income.

In the estimated gross national product in Taiwan calculated at market prices in 1954, crops, livestock, forestry and fishery production constituted about 32 % of the gross domestic product (GDP), or 28% of the gross national product (GNP), while mining, manufacturing, electricity, water and gas, and construction and building accounted for about 28% of GDP or 25% of GNP. Agriculture was still the "back­ bone" of the Taiwan economy in 1954. How­ever, it should be noted that owing to the rapid industrial development in 1950-54 agriculture declined in relative importance as a component of GNP, while the relative importance of industry increased. The ratio of the value added by agriculture to the value added by industry was 1.96 in 1950, but fell to 1.23 in 1954.

Nevertheless the period 1950-54 saw a steady increase in the production of all major crops except citronella oil and jute. On the basis of statistics released by the Ministry of Economic Affairs in March, 1955, the indices of agricul­tural production, with base year 1951 as 100, rose to 111.0 in 1952, 121.7 in 1953, and 123.0 in 1954.

In recent years exports of farm products in­cluding sugar, rice, tea, banana, pineapple, citronella oil, etc. accounted for over 90% of the total annual foreign exchange income. Foreign exchange expenditures on the imports of agricultural commodities (including U.S. aid imports such as cotton, wheat flour, soybean, salted fish, and timber) amounted to around 35% of the annual foreign exchange payments. By setting the expenditures for the import of agricultural products against the receipts derived from the export of agricultural goods, there was still nor­mally an average annual surplus of foreign exchange income amounting to about US$50 mil­lion. However, that surplus of the foreign exchange income fell in 1954 to about US$20 million, owing mainly to the decline of sugar export and the unfavorable rice price in the world market. The situation was greatly improved in 1955 in which year agricultural ex­ports increased to US$124 million, or 93 per cent of the total exports, and agricultural im­ports dropped to US$62 million, thus yielding an agricultural surplus of US$62 million. But the surplus was insufficient to cover the cost of imports of manufactured goods including equipment and machinery needed by local industries. This has caused an average annual deficit of around US$85 million in total foreign exchange payments during the last three years, which was met by U.S. economic aid. If Taiwan is to achieve a balance in foreign exchange receipts and payments in the near future, sustained efforts must be made not only to boost production, but also to improve the quality of its farm commodities so that bigger quantities of the commodities may be available for export, and smaller quantities of soybean, wheat, timber, and sea foods need to be imported.

In promoting the development of industry in Taiwan in recent years, major efforts have been directed towards increasing the output of power and chemical fertilizers. While power is essential to industrial development, fertilizer is basic to agricultural production. Besides, processing of agricultural products forms an essential part of Taiwan's industry. According to data released by the Industrial Development Commission of ESB, the value of locally processed agricultural products in 1954 amounted to about NT$3,500 million, accounting for 40% of the total value of industrial and mineral products which was NT$8,600 million. This is another proof that coordinated development of agriculture and industry is essential to a healthy economy.

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The plan for one day should start in the morning; the plan for one year should start in the spring; the plan for one whole lifetime should start with industry.

Translated by Edward Y. K. Kwong