SA 55. LAND REFORM IN TAIWAN by Chen Cheng (preface) 1961

China Publishing Company 1961

PREFACE

LAND REFORM achievements on Taiwan have attracted  widespread attention. Countries of   Southeast Asia, the Middle East, Africa, and Latin America have sent representatives  to  make on-the-spot inspections or have requested cooperation  and the dispatch of Chinese personnel to help them solve their land problems.  Foreign visitors  have  shown  a  keen  interest  in  our   program.   Consequently, it is hoped  that  these  pages  will  make a small contribution to better understanding of Taiwan land reform and serve  as  a reference  for  those who  want  to carry out similar projects.

A study  of  Chinese  history  for  the  last  2,000  years shows recurring  pattern s of  war  and peace.    Many  causes may  be  listed, but  the  most  important  is  inability  to  maintain  a  proper  balance between  land  and population  for  any length  of  time.  Whenever population increased to a point where land was insufficient, violent uprisings  broke  out  and  civil  wars  ensued.    But  with  resulting reduction of   population   and  restoration   of   the land-population equilibrium,  another  period  of  social  and  political  stability  would begin. Lasting peace and stability are not possible until this vicious cycle has been ended.

We  know only too  well  that  the best way  to effect  changes in an agrarian economy  is to develop  industry  and  trade. However, in a country  where  the  economy  is  predominantly  agricultural, capital investment in land and the exploitation of human labor constitute great  impediments  to   such  development. We must begin by setting and labour free throgh land reform.

Not only that. Even to step up land productivity, land reform is necessary. Under an unreasonable tenancy system, farmers have neither  the  interest to increase  production  nor   the ability to   improve  land  utilization.

When  the  author  was  Governor of Hupeh Province in 1939, a serious drought occurred. Curiously,  farmers refused to cooperate with the civil and military personnel and students who were dispatched to help them pump water into their fields. We later discovered this was because they could enjoy the full fruits of their labor only by allowing the rice seedlings to wither and then planting drought-resistant  crops  in their stead. After the implementation of farm rent reduction on Taiwan in 1949, there was a steady increase in rice production. This was due to the fact that with increased income resulting from rent reduction, farmers have greater incentive and increased ability to boost production.

The author was appointed Governor of Taiwan Province in 1949. At that juncture the general situation on the mainland was deteriorating fast, the morale of the people on Taiwan was low, economic confusion and social unrest were rampant, and it looked as though anything might happen. To safeguard  the  island  as  a base of operations for national recovery, we required social stabi lity, and the first prerequisite had to be satisfactory solution of the problem of the people’s livelihood . Social and economic conditions of Taiwan still rested on an agricultural basis. Farmers constituted more than three-fifths of the population, and the number of tenants was more than two-thirds of  all  farm  families.  Social stability, improved people’s livelihood and economic development  could  take  place  only  through  land reform.

In view of the unstable situation on Taiwan  at the time,  it  was decided that reform should not be rushed but should be undertaken in  a series  of  steps.  As  the first of  these,  rent  paid by tenant farmers was limited to 37.5 per cent of  the annual yield  of the main crop. The successful implementation of this program can be attributed to three factors: (1)  reasonable  rentals  which  gave the tenant more income but  caused relatively  slight loss to  the landlord; (2) correct classification of land categories and  grades, leading to just and reasonable appraisal of the yield of the main crop; and (3) heightening of the farmer’s incentive and productive ability in coordination with the government’ s policy to boost production of rice by 20  per  cent.  Consequently, the  amount  of  the  landlord’s income was  not  diminished  in  spite of rent reduction.

At that time, about 21 per cent of farmland in  Taiwan  was public land. As a part of its rent reduction policy, the Chinese Government offered such lands for lease at reduced rentals in order to improve the livelihood of farmers. Once the rent reduction program had been successfully carried out, the government decided, in 1951, to offer these lands for sale to incumbent tenants, who were given all necessary protection and assistance.

By 1953, the rent.reduction program had become solidly established and had produced excellent results. With this as a basis and with the experience gained from the sale of public lands, we decided to implement a land-to-the-tiller policy aimed at eradication of the tenancy system and the freeing of capital in­ vested in land to promote industrial and commercial development and the transformation of the economic and social structure of the country.

Five principles were adopted.  (1) We decided to carry out the program gradually and by peaceful means. Landlords were permitted to retain a reasonable maximum of tenanted land. Amounts over and above this limit were compulsorily sold to the government at fairly fixed prices for resale to tenants. Next, the government extended loans to the farmers to enable them to buy the lands retained by the landlord. (2) Both the compulsory pur­ chase of land and its resale were effected through the government

Without direct contact between landlord and tenant so as to prevent abuses or disputes.  (3)  Care was taken  to  see  that  the  buyer was the original tiller, that the land was the same he had been  tilling and that the way of operating the farm was unchanged.  (4) For protection of other enterprises, limits were set to farmlands owned by educational, social, and economic undertaking and industrial and commercial plants, and such lands were exempted from compulsory purchase and sale. (5) Protection was given to owner-cultivators by preventing the transfer or lease of farmlands purchased under the land-to-the-tiller program before the price had been paid in full. A production loan fund was provided to encourage the farmer-purchaser to operate the land on a cooperative basis with improved techniques.

Successful implementation of the land-to-the-tiller policy was attributable to these principles and four other  important  factors. First, a firm foundation had been laid by the operation of the rent reduction program. Second, the prior implementation of the general landownership classification program had resulted in clear and accurate data on land categories, distribution of rights, actual condition of use, and identity and number of resident and non­resident landlords. Third,   the   compensation   paid  landlords  by the government was fair and reasonable. Issuance of  land  bonds and stock shares of public enterprises as compensation guaranteed landlords against the risk of possible inflation. Fourth, the government induced landlords to engage in industry and assisted those with  small  holdings  to  take  up  other occupations.

Several conspicuous results have emerged  from  land  reform on Taiwan, social unrest and  confusion  have  gradually  given way to stability. Social order is  especially  good  in  the  rural  areas. After the farmers acquired landownership, they became deeply interested in maintaining peace and order in the community. The farmer’s productive capacity has been raised and economic development fostered. Increased income, a  better livelihood and higher purchasing power have stimulated industrial and  commercial  development  and  economic  prosperity. Gradual  transfer to industry and trade of the capital  originally  tied  up in land  has  led to a phenomenal development of trade and industry, trans­ formation of the social and economic structure, and a big forward  step  toward  an  industrial society.

According to our experience, the implementation of  land  reform is not only basic to the betterment of the people’s  livelihood and the promotion of political and social  stability, but also  a motive force for furtherance of economic development and industrialization. The  progress we  have  made  in economic reconstruction is largely due to the influence of  changes  in agriculture.

As of today, our efforts are directed toward several  goals.  On the one hand, we have to preserve and expand the achievements of  land  reform and  protect the  interests of the farmers. On  the  other,  we  need  to  strengthen  land  utilization  and  make  full use of  the economic value  of  land in order to enrich the people as  individuals  and  the  nation  as  a  whole.    Meanwhile, we  must accelerate economic development and foster  industry. The author

is convinced that  with  the  implementation  of  land  reform on Taiwan, we can  break  China’s vicious circle of  cyclical war  and peace,and also fully  develop  our  industry  and  trade  so  as  to  modernize the national economy and the people’s livelihood, and to guarantee and develop  political democracy  through economic freedom. We may even  say  that   land  reform  on Taiwan  will  mark  an  important change  in  the  course of  our history.

The situation on the Communist-controlled Chinese  mainland is entirely different. There, in the name of agrarian reform, the  Chinese Comunists  have deceived  the people and created  a reign of terror. As  a  result  of  Communist  rule,  Chinese  farmers  have fallen into the status of  serfs. Years of farm failure have exposed all the  people  to starvation. The  contrast   with   the  situation  on Taiwan  is clear  and indisputable.

We are sincerely sorry for our failure to carry out Dr. Sun Yay-sen’s land-to-the-tiller ideal while we were still on the main­ land. Though that failure may be partly attributed to internal disturbances and foreign invasion, it was due mainly to the selfishness of a small minority  of  people, to their  shortsightedness and lack  of courage. The achievements of land reform on Taiwan may compensate, to some extent, for that failure, but we cannot be satisfied with this limited accomplishment. We must make greater exertions to achieve still greater progress. We must be determined. on the basis of the experience gained on Taiwan, to put the land-to-the-tiller policy into effect on the mainland after its re­covery. Our brethren there  then  may  be delivered  from starvation and slavery, and come to enjoy the freedom, stability, and happy life that they are entitled to.

Chen Cheng

CHAPTER 1

THE  LAND PROBLEM

Man cannot  live   without  land,  from  which   he  derives  his sustenance. Land  is,  as  a  matter  of  fact,  the mainstay  of human  life. It must   be   observed,   however,   that while  there has  not  been   much   change   in  the   total  area  of   land  since ancient times, the increase of population, if unchecked, may have no  limit at all. In primitive  ages when  there was  plenty of land with few inhabitants, every  person  could  have  as  much land as he  wanted.                                                           Hence  there  was  no   land  problem. But  in  later times, as land became scarce in proportion  to increased  population . the supply  was  insufficient   to  meet  the  demand.                                                            Land came an object over whose possession individual fought individual   and   nation  fought  nation. Thus   the   land  problem gradually arose.

Though the land problem is complex, it may be  said  to  consist of  the following aspects:

1. Problem of land distribution:  This  arose  as a result  of the lack of proper regulations to  govern  the  ownership  of  land and the enjoyment of its fruits. The feudal form of land distribu­ tion  was  unjust  and  objectionable.   Unrestricted   appropriation of land for their own benefit by big landlords must be considered outrageous.

Note. We hope to add a précis of the rest of the book in due course.