Most countries in the tropical and subtropical parts of the world have certain characteristics in common and face somewhat similar problems. Their natural resources are not yet adequately developed and their economies are predominantly agricultural. An overwhelming majority of their people make a precarious living by farming. Poverty-stricken and discontented, they are susceptible to Communist propaganda. Only with the betterment of their livelihood through increased farm production and higher incomes can social and political stability be maintained and the democratic way of life be strengthened in these countries.
However, as the leading countries of the modern world are all highly industrialized and prosperous, there has been a strong tendency for developing nations to imitate them by concentrating on industrial development and neglecting agriculture. The result has been continued imports of large quantities of food and lack of the necessary purchasing power to buy industrial goods. But in the Republic of China we have adopted an alternative policy for the island province of Taiwan. We began with the improvement of agriculture and only gradually has industrial development followed.
The area of Taiwan is 13,886 square miles and about two-thirds of it is covered by the Central Mountain Range running from north to south. The average annual rainfall in the important agricultural regions ranges from 1,763 to 3,042 mm. The island has an annual average of three and a half typhoons that bring violent winds and heavy rainfall and damage land and crops. From the mountains down to the plains, different altitudes provide cold, temperate, subtropical, and tropical climates in which various crops can be grown. These differences offer many opportunities but also provide many difficulties demanding a high level of technology and intensive farming. Taiwan agriculture is made up largely of small farms dependent upon family labor.
For a half century prior to 1945, Taiwan was a typical colony serving as an important food source for Japan and as a market for Japan's industrial products. During this period farm production was more than doubled by agricultural research and demonstrations, extension of japonica rice varieties, development of irrigation, and the use of chemical fertilizers. Farmers' associations were established for the collection of rice and other farm products for export to Japan and also to provide agricultural extension services.
However, World War II brought a deterioration in the irrigation system, a shortage of chemical fertilizers, and a sharp decline in food and other agricultural production to the level of 1910.
Tasks of Rehabilitation
In the fall of 1945, the Chinese national government took over the province of Taiwan after 50 years of Japanese rule and began the rehabilitation of agriculture and industry in order to increase production. In the immediate postwar years, Chinese administrators, engineers, and agriculturalists from the mainland and Taiwan applied themselves to the task with notable success. Hydraulic power plants, sugar mills, pineapple canneries, tea-processing plants, and fertilizer plants which had been bombed by Allied forces or had suffered deterioration during the war were restored by Chinese engineers. The irrigation systems and dikes for flood control were gradually repaired. The production of agricultural products increased steadily from 1946 to 1948.
A crucial period came in 1949 when the Chinese national government withdrew from the mainland and Taipei became the capital of free China on December 8, 1949. Taiwan thereby became a bastion in China's fight against Communism. The population of Taiwan increased from 6.8 million in 1948 to 7.6 million in 1950, not including the 600,000 men in the armed forces. The government laid special emphasis on increased food production. Good progress was made in seed improvement for rice and sugar cane, and the crop yield per hectare was increased. The production of 1.4 million metric tons of brown rice in 1950 set a record, exceeding the high yields of 1937-1939 and leaving a surplus for export to Japan in exchange for fertilizers.
In addition to the increase in agricultural and industrial production in 1949-1953, the national government made rapid strides in establishing organizations and making institutional changes for planned development. In agriculture the work began with the establishment of the China-United States Joint Com mission on Rural Reconstruction (JCRR) in Nanking in October, 1948, under the U.S. China Aid Act of that year. Since its transfer along with other government agencies to Taiwan in 1949, JCRR has provided technical assistance and financial aid to agricultural agencies. Originally composed of three Chinese and two American commissioners appointed by the Presidents of the two countries, JCRR now has two Chinese, including the chairman, and one American commissioner. It has built up a small but highly qualified technical staff in plant industry, animal industry, forestry, fishery, irrigation, farmers' service, rural economics, and rural health, and assisted cooperating agencies along these lines. It has also assisted the government in implementing land reform, reorganizing farmers' associations, and planning and coordinating agricultural programs for the economic development of Taiwan.
Land Reforms
To improve the economic condition of tenant farmers and stimulate production, the government enforced in 1949 a program for reducing farm rents from 50 to 37.5 per cent of the annual major crop. The second phase of the government's land reform, which began in 1951, was the sale of public land to farm families. The third phase was the Land-to-the-Tiller program of 1953, giving literate, experienced tenants a chance to become owner-operators by the purchase of land, to be paid for over a period of ten years. Before this series of land reforms, 41 per cent of the farm land was operated by tenants. This had been reduced to 12 per cent by 1965. With more income than in pre-reform days, farmers are making land improvements, constructing better houses, and buying more equipment. With improved economic and social status, they are assuming greater responsibility in community activities. Furthermore, 30 per cent of the purchase price for the land was paid in the form of stock in government enterprises and 70 per cent with land bonds in kind. Thus the government encouraged land owners to change their investment from land to industry. This has been an important factor in rapid development of Taiwan industry.
Following the successful implementation of land reform, the government reorganized the farmers' associations in 1953 by establishing active and associate memberships. Active membership is limited to one representative from each eligible family. To be eligible, a family must earn at least 50 per cent of its income from farming. Active members have the right to vote, hold office, and use all facilities of the association, Associate members are farmers who earn less than 50 per cent of their income from farming. Associate members enjoy all rights except those.9f voting and holding office. Thus the farmers' associations are now controlled by bona fide farmers.
A farmers' association in each rural township provides members with technical advisory services, rice milling, facilities for the storage and distribution of fertilizers, pesticides, and other essential commodities, plus such banking services as savings accounts and agricultural credit. Some associations provide services in the marketing of vegetables and fruits. Eight of ten farm families in Taiwan belong to farmers' associations. JCRR and the Provincial Food Bureau have helped farmers' associations construct or renovate rice mills and fertilizer warehouses. Training of association personnel has enabled the associations to improve their services and increase their earnings.
With the removal of the Chinese national government to Taiwan in 1949, it became necessary to maintain large military forces as well as to support an expanding population. A steady increase in food and agricultural production and the development of industry have been essential.
Planned Development
Unfavorable balances of international payments occurred year after year from 1949 to 1953. This was the result of increased government expenditures and a sharp rise in demand for foreign exchange to buy capital goods required for industrial development. Fortunately, financial support was received from the United States in the form of economic aid to meet budgetary deficits and facilitate development.
Late in 1952 the Chinese government established under the direct supervision of the Premier an Economic Stabilization Board that has gradually developed into the present Council for International Economic Cooperation and Development. This powerful body initiated economic planning for Taiwan with the first four-Year Plan, 1953-1956, for the attainment of economic independence and followed it up with second and third plans in the years between 1957 and 1964. The three Four-Year Plans set forth agricultural, industrial, trade, financial, transportation, and educational policies, programs, and goals.
The annual agricultural production goals for the province as a whole are worked out in this way. In December of each year a provincial conference is held by the provincial departments and bureaus concerned to exchange views on county goals and plans for the following year. Invited are representatives of county governments and farmers' associations and local specialists. Following the pattern of the provincial conference, county meetings are convened by the magistrates and township meetings by the township chiefs. Their decisions and recommendations are forwarded to the provincial departments and bureaus concerned, and then to CIECD. By means of these two-way lines of communication from the national government down to the townships and back, the annual agricultural production plans are hammered out and finalized by February of the production year.
As a result of the three Four-Year plans the aggregate agricultural output of crops, livestock, fisheries and forest products in 1964 almost doubled that of the 1950-1952 average as well as that of the prewar peak year. The average annual growth rate of agriculture was 6.2 per cent for 1953-56, 5 per cent for 1957-60, 6.4 per cent for 1961-64, and 8.7 per cent for 1965 as shown in Figure 1.
Note: A long-range population projection envisages the gradual lowering by 1974 of annual population growth to 1.8 per cent. (File photo)
This increase in agricultural production has made it possible for Taiwan to meet domestic food requirements, although the population grew from 8.7 million in 1952 to 13.2 million in 1965. The production of rice, the staple food of Taiwan, increased from 1.6 million metric tons of brown rice in 1952 to 2.3 million in 1965. The increase was primarily due to the increase in the per hectare yield from 1,998 kg. of brown rice in 1952 to 3,038 kg. in 1965. Area planted to rice declined from 786,000 hectares in 1952 to 773,000 hectares in 1965. The increase in the per hectare yield was largely due to improved varieties, more and better use of fertilizers, irrigation, and pesticides, and better cultural methods. The production increase for other crops also resulted principally from technological improvements. The total area of cultivated land increased only slightly from 876,000 hectares in 1952 to 887,000 hectares in 1965 as a result of soil conservation and land reclamation. As a result of increased production, consumption of rice and protein foods grew steadily from 1952 to 1964.
The increase in agricultural production boosted foreign exchange earnings from US$114 million in 1952 to US$267 million in 1965 through the export of sugar, rice, bananas, pineapples, tea, mushrooms, fruits, vegetables, and other agricultural products.
However, farm income per capita has not kept pace with agricultural production, because the population increase has not been accompanied by a proportional rise in the area of cultivated land. Income per capita went up 47 per cent from 1952 to 1964, while the farm income per agricultural worker rose about 74 per cent in the same years. To improve this situation, farming has been transformed from subsistence and simple crop farming to commercial and diversified farming.
Dams have helped farmers turn dry land into farms. (File photo)
Industry and agriculture are partners. The development of one is linked with the other. Industry has been developing rapidly, helped by U.S. economic aid. The expansion of power and fertilizer production has received high priority. Other important industries related to agriculture are sugar, wheat milling, vegetable oils, some textiles, food processing and canning, and pesticides. Agricultural production of sugar, mushrooms, and asparagus are connected with industry. Industrial production of fertilizers, pesticides, and farm implements are agricultural assets.
Production Gains
Production has been increasing in both agriculture and industry, but the latter has forged ahead more rapidly. The net domestic product increased from US$1,267 million in 1952 to US$2,121 million in 1964. During this period, agricultural production, including crops, livestock, fishery, and forestry, were doubled. However, when expressed in percentages of the net domestic products, the value of agricultural products declined from 35.2 per cent in 1952 to 27.7 per cent in 1964, while industrial products, including manufactures, mining, and electricity, in creased from 17.6 to 27.5 per cent in the 12-year period. Both exports and imports have been climbing, and a favorable balance of trade of more than US$21 million was achieved for the first time in 1963 and in creased to US$53 million in 1964.
In 1965, exports amounted to US$488 million. Imports, of which 93 per cent consisted of industrial machinery and raw materials, came to US$555 million. The value of agricultural exports tripled from 1954 to 1965. Yet in percentage of the Taiwan total, agricultural exports declined from 93 per cent in 1954 to 54.3 per cent in 1965. Non-agricultural exports increased from 7 per cent to 45.7 per cent in the same period. Taiwan's economy has evolved from predominance of agriculture to a mixture of agriculture and industry.
Better Technology
With limited resources and an increasing population pressure, Taiwan has achieved a highly productive agriculture in the last 15 years. Factors that have contributed to this rapid growth are varied and complement each another for maximum effect. The principal factors are these:
1. Peace and social stability.
2. Such human factors as: (a) progressive and stable government, (b) agricultural leaders with advanced training and long experience who have developed technology and planned and coordinated programs, (c) many graduates of agricultural colleges and vocational schools working in government or private agricultural organizations, and (d) an intelligent, literate farming population. The great majority of farmers have received at least a primary school education. They are clever, ambitious, industrious, and eager to learn new techniques and methods. With the help of agricultural specialists and extension workers, they have increased production, improved marketing techniques, and raised the productivity of land, labor, and capital.
3. Technological improvements and innovations introduced as a result of substantial capital investment have boosted the productivity of Taiwan agriculture. According to an analysis by JCRR economists, two-thirds of the agricultural increase has been contributed by technological improvements. Advantage has been taken of the tropical climate to develop systems of multiple cropping with three or four harvests a year. Based on research, experiments, and field demonstrations, and widely adopted by farmers, technical improvements include those in (a) plant industry—with improved varieties, cultural methods, and systems of multiple cropping, and better use of irrigation water, chemical fertilizers, and pesticides, and better utilization of foothills and slopelands through soil conservation practices; (b) animal industry—with hybrid hogs and cattle, pure breeds of dairy cattle and poultry, use of artificial insemination for breeding animals, control of animal diseases, and development of balanced feed and grass land, improvement of feeding efficiency, and demonstration of the integrated system from production to marketing; (c) forestry—with improvement of large-scale nursery management and reforestation, planting desirable tree species to replace low-value trees in reforestation, development of the integrated wood processing and utilization industry, an aerial survey of forest resources and land use through the application of modern aerial photo interpretation and mapping methods; and (d) fisheries-with improvements in the skills of fishermen, motorization, and increase in the number and size of fishing boats for deep-sea and inshore fisheries, use of synthetic fiber nets and lines, and improvement of fish cultural practices.
4. The organizational factors include governmental and farmers' organizations. There are government agencies relating to agricultural research, education and extension service at the national, provincial, county, and township levels; and farmers' associations at the provincial, county, and township levels. These organizations cooperate to channel the resources and technology down to the village and farm level.
Farm Incentives
At the national level, the Council for International Economic Cooperation and Development of the Cabinet is a body for economic planning and coordination with the Premier as chairman, and the heads of the ministries concerned, chairman of JCRR, and governor of the province as members. With the Minister of Economic Affairs as chairman and a JCRR commissioner as vice chairman, the Agricultural Production Committee of CIECD consists of administrators, senior specialists, and professors drawn from the Provincial Department of Agriculture and Forestry, the Provincial Food Bureau, the Provincial Water Conservancy Bureau, JCRR, and agricultural colleges. We see, therefore, that in agricultural development, there is, on the one hand, a lateral coordination among agencies engaged in agricultural research, extension, marketing, financing, and administration, and, on the other band, a linear operational coordination among the agencies from the central government down to township offices.
5. The government has stimulated the farmers' economic incentives through a series of measures, among which the most important are: (a) land reform; (b) supported price of sugar and guaranteed or negotiated prices of tobacco, pineapples, jute, and bananas; (c) improved marketing systems of export crops such as bananas, oranges, pineapples, mush rooms, and vegetables; (d) adequate supply of farm requisites such as fertilizers, pesticides, farm implements, and feeds through township farmers' associations; and (e) the supply of supervised agricultural credit for production purposes.
These factors have not acted independently for the achievement of agricultural development. They complement one another for the maximum effects, as may be seen from the following examples.
Extension program has modernized farming. (File photo)
A recent program for integrated demonstration on improved rice cultivation is a new measure designed to boost production. All improved cultural techniques, such as the use of superior varieties and good seed, improved fertilization and irrigation, intensified pest control, etc., are practiced simultaneously on a plot of land to demonstrate their combined effect. Started in 1963 by JCRR in cooperation with the agricultural improvement stations of the Provincial Department of Agriculture and Forestry, the program has been extended to all important areas. The yields from the demonstration plots averaged 34 per cent higher than those from nearby fields in the 1963-65 period. The results are superior to those obtained by implementing one improvement at a time. When improved varieties or better fertilization or pest control are adopted separately, increase in the yield is less than 10 per cent for each.
Increased Cooperation
The integrated demonstration program also has the advantage of promoting cooperative farming. Each demonstration plot has an area of about 10 hectares. Usually from 10 to 15 families are organized to operate as a unit. They employ the same improved techniques and engage in such joint operations as setting up common seedbeds, using power tillers and other machinery in land preparation, pest and disease control, etc. These would be less effective if done by hand and by each individual farmer. Cooperative farming will partially eliminate the shortcomings of the small farm system and also speed farm mechanization. As the yield of each farmer's field is still his own, this plan is different from the cooperative farm. The farmer still has incentive to increase production and his income.
A second example of the interaction between the different factors is the impact of the improved marketing system on banana exports. Before improvement of the banana marketing system in April, 1963, growers received less than half the export price and lost interest in the crop. Though they observed demonstrations on the better use of fertilizers, pest control, and cultural improvements conducted by agricultural experimental stations, they did not adopt the improved methods. But since improvement of the marketing system to give growers 70 per cent of the export price, they have enthusiastically adopted the improved methods. Export value of bananas rose from US$8.7 million in 1963 to US$55 million in 1965.
U.S. economic aid to the Republic of China was phased out on June 30, 1965. But in view of the need for the further development of agriculture in Taiwan and of the useful services JCRR has performed, the Chinese and American governments have decided to maintain this bi-national organization with funds provided by the Sino-American Development Fund.
Future Prospects
The challenging problems in our future economic development are: (a) to maintain a high growth rate of about 7 per cent per annum in our gross national product; (b) to provide added employment opportunities for the expanded labor force resulting from population growth; and (c) to accelerate capital accumulation in our domestic economy to meet the mounting needs for capital investment. To coordinate the efforts for accelerated economic growth, the Chinese government has developed a fourth Four-Year Plan covering 1965-1968 together with a 10-year projection covering 1965-1974 in order to cope with the need for gradual transformation of our economic structure. The anticipated growth rates for various economic sectors in the 1965-1968 period are 11 per cent for industry, 7.7 per cent for transportation and other services, and 4.1 per cent for agriculture so as to achieve an aggregate growth rate of 7 per cent. The objectives of the agricultural plan are: (a) boosting food production to meet the demands of a growing population and for better nutrition; (b) stepping up and diversifying agricultural exports and improving the marketing system; (c) developing agricultural processing industries, creating more employment opportunities for the rural population, and bettering the farmers' livelihood; and (d) continuing to emphasize population stabilization through family planning, hoping to reduce the natural rate of population increase from 28.5 per thousand in 1964 to 18.5 per thousand within the next 10 years.
Technical Emphasis
In order to achieve these objectives, emphasis is placed upon the continuing improvement of farm technology through intensification of research and education. A number of our problems require technological breakthroughs or innovations. Improved technology can be introduced in agriculture only as a result of new capital investment in both physical and human resources. Then labor productivity can be increased together with an increase of land and capital productivity. At the same time the development of industry and services under the economic development plan can absorb part of the surplus labor of agriculture.
To sum up, the annual agricultural growth in Taiwan from 1950 to 1965 has maintained an average 5 per cent increase, although cultivated land area has remained nearly the same. This steady agricultural growth must be credited to a variety of factors—technical, economic, and institutional-and to peaceful and stable social conditions. The approach and methods we have adopted in Taiwan may be useful to other countries facing similar problems. Technology can always be channeled through effective institutions and farmers' organizations to the individual farmers.
Taiwan has evolved in the last two decades from a colonial dependency to an independent economy, from rice and agricultural improvement to industrial development, from an agricultural to a mixed agricultural and industrial economy. Yet there is still an urgent need to increase the output of agriculture further as our economy moves ahead. Agriculture continues to play an important role in the overall development of Taiwan's economy in terms of providing adequate food and raw materials and contributing an agricultural surplus for capital formation.