After Taiwan’s retrocession to the Republic of China from Japan in 1945, over 50 percent of the island’s population was farmers, of whom 70 percent were tenants. After a half century of colonial rule, the Japanese land-rental system still applied. The average share of the harvest that tenants had to turn over to the landowner exceeded 50 percent, sometimes going as high as 70 percent.
Furthermore, some were “iron leases” requiring a fixed crop quantity, regardless of land conditions or natural disasters. Tenants toiled all year round just to give most of their harvest to the landlord. To make things worse, leases were usually oral. When conflicts arose, there were no written documents to refer to, and landlords, given their higher social status, usually won out. The system represented blatant socioeconomic inequality.
The final goal of Taiwan’s land reform was to make all farmers the owners of their own fields. The reform proceeded in four stages: (1) leasing government-owned land to tenants; (2) 37.5 percent shares on privately-owned farmland; (3) the sale of public land to farmers; and (4) the land-to-the-tiller program.
Beginning in 1946, to begin balancing land supply and demand, state-owned farmland was leased to farmers for 25 percent of the crop. Furthermore, in 1949, shares were reduced to 37.5 percent on privately-owned farmland, based on average harvest quantities for the previous two years.
The figure of 37.5 percent was arrived at by assuming that the working capital provided by a farmer was equivalent to 25 percent of total production. The remaining 75 percent of the crop was divided into two equal parts, one for the landlord and the other for the farmer.
In 1949, Chen Cheng, then chairman of the Taiwan Provincial Government, pointed out to a reporter that farmers, who made up a large percentage of the total population, work harder than anyone else, but they sometimes could not even fill their stomachs. “The motivation behind the 37.5-percent rent is to eliminate such unfair conditions,” he emphasized.
Under the new arrangements, crop yields increased as tenants were willing to invest more money in agricultural equipment and improved farming methods. According to Ministry of the Interior statistics, in 1948, before the rent reduction, total rice production was 1.037 million metric tons. Following the change in 1949, the rice output rose to 1.172 million metric tons, and jumped to 1.517 million metric tons in 1952, a 46 percent rise in four years.
MOI figures show a 23-percent increase in income for mid-level tenants during this period. As a result, their standard of living and social status increased, with more of their children attending school. The average death rate for farmers also dropped.
As landowners’ profits from farmland decreased, land prices went down and they began to sell off land and invest in other businesses. A study by Taiwan’s China Research Institute of Land Economics in 1951 showed the amount of farmland sold in 1949 in six major agricultural counties was 20 percent more than in the previous year. This paved the way for direct ownership of land by farmers.
Since the government was the largest landlord of all, the third stage of reform was to sell public farmland to tenants, with payment spread over ten years. This policy was implemented from 1951 through 1975, in nine phases. According to MOI statistics, 286,000 farming households benefited, with over 139,000 hectares of land released.
In 1953, following the 37.5-percent rent reduction and the sale of public farmland, the government took the final step in its land reform—the land-to-the-tiller program, transferring land ownership from landlords to tenant farmers.
When ownership was transferred, landowners were compensated over a period of 10 years, receiving 70 percent of the purchase price in land bonds to be redeemed in kind, in rice or sweet potatoes, with interest at 4 percent per annum. The remaining 30 percent was paid with stocks in government-owned industries.
From 1951 to 1953, the amount of land owned directly by farmers increased from 57 percent to 90 percent as a result of the land-to-the-tiller program, according to MOI statistics. Taiwan’s successful land reform has since become a model for many other countries. (THN)
—The story of Taiwan’s successful land reform will be continued Sept. 11.
Write Jean Yueh at yueh@mail.gio.gov.tw