At the end of December of 1997, the Legislative Yuan rushed through the first reading of the "Agricultural Development Regulations" after tacking on provisions for lifting restrictions on selling agricultural land to anyone but working farmers. This startled the Council of Agricultural Affairs (COA) of the Executive Yuan, and caused Premier Vincent Siew to convene an emergency meeting with senior legislators representing agricultural interests. He asked them not to liberalize land sales too broadly, in order to avoid problems such as land speculation, transfer of agricultural land to other uses, and environmental degradation. The COA managed to have the bill derailed at the second reading. But because of continuing pressures to lift the restrictions, Premier Siew promised that by February 20 of this year relevant legislation would be sent to the legislature.
In rapidly-growing Taiwan, there have long been voices calling for "farmland liberalization"-allowing agricultural land to be sold freely or at least opened up to alternate uses. Hoping to hasten farmland liberalization, action by senior rural legislators led to the passage of the first reading last December of provisions that would immediately allow non-agricultural use of farmland for all land outside certain designated zones, and, after one year, unrestricted selling of all agricultural land (though certain land designated for agricultural use only could only be used for farming even after sale).
Long time coming
According to the COA, there are 971,000 hectares of agricultural land in Taiwan, of which 328,000 are in special zones. The COA has always maintained the principle that all farmland should be "owned by farmers and used for agriculture only." But, as farmland has been divided by inheritance, plots have become too small to achieve economies of scale. Opening up Taiwan to imports of farm products has only made things worse for farmers. Also, some farmland has become unproductive due to salination or subsidence. Thus many say that the time has come for farmland liberalization.
In fact, in early 1997 the Executive Yuan decided it would solve problems created by restrictions on farmland use or sale through regulatory changes and inter-ministerial coordination. At that time, the COA suggested that complete liberalization of the sale of farmland would come within five years. But legislators wanted this sooner, which is why they inserted the sales liberalization clause in the agricultural development bill, bringing into the open the difference of opinion between Legislative and Executive branches.
As legislators passed the first reading of provisions for complete farmland liberalization in mid-December, senior rural legislator Lin Kuo-lung said that if liberalization were not adopted, the ruling KMT would collapse politically; Lin swore that farmers would take to the streets to protest. The farmland issue promises to be a major one in the elections for the Legislative Yuan at the end of 1998.
A farmer wrote to a newspaper to say that the adverse impact on farmers from liberalization of farm-product imports (which Taiwan must do to qualify for membership in the World Trade Organization) is not something that can be resolved by government subsidies. He argued: "Despite fear of land speculation by large corporations, farmland liberalization is still to be hoped for. With rising land prices, farmers can sell their land and shift into another line of work." Farmland cannot be sold to anyone who is not a working farmer, and few children want to take over their parents' farmland. So much farmland is still owned by elderly farmers who are not physically capable of cultivating it. The principle of "farmer-owned and utilized" is binding farmers for life to land that is useless to them.
Not yet ready to buy the farm
On the other side, COA vice-chairman Lin Hsiang-neng says of the legislators' hasty passage of the provisions: "If you disrobe all at once you'll catch cold." If the scope of liberalization is too broad, problems will result. If there is total liberalization, then future owners need not actually farm the land. Given that illegal use of farmland for non-agricultural purposes is already widespread, it would be almost impossible to regulate future use at all if land need not be owned by farmers themselves. Rampant speculation, a food crisis, or other severe problems might ensue.
The COA says that after liberalization most farmland owners will probably hang onto their land in hopes of a higher price, perhaps creating monopolization and speculation, and big corporations can take advantage of rapidly rising prices to make windfall profits. One real estate registrar says that farmers who own land may make out well in the short run, but when prices skyrocket, the ones who make the most money will be those who can afford huge purchases of land, like corporations and speculators.
Some scholars worry that large-scale farmland liberalization will affect the food supply in the next century. Huang Tsung-huang, a professor in the Graduate Institute of Economics at Tsinghua University, emphasizes that food supply is always subject to uncertainty. Consumers may be willing to absorb some costs-including the non-agricultural benefits of farmland liberalization-to preserve more farmland for future production.
Another, larger, issue is the incalculable environmental damage that will result from putting current farmland to other uses. Liu Ming-lung, secretary-general of the Environmental Quality Education Foundation, notes that wet paddy field has a number of useful environmental functions, including stabilizing flow volume in rivers, absorbing excess in times of heavy rains and floods, improving water quality, reducing soil erosion, and improving air quality. It is also considered internationally as a form of wetlands, and the destruction of wetlands is an irreparable loss.
A second land reform
Though there are many factors to be weighed, there is no clear figure as to how much land is necessary to insure food security in the next century. Nor has there been any scientific assessment of the overall environmental importance of agricultural land. So it is difficult to dissuade those trying to hasten farmland liberalization. (In any case, even with liberalization, a certain percentage of land would be set aside for agricultural use or for environmental reasons; the specific amount has yet to be determined.)
Right now the legislative and executive branches are in a see-saw battle over the issue. The executive wants to adopt the principles of "agricultural use only for land zoned as farmland; regulating land, not people," so that even if in the future farmland not need be owned by actual farmers, its use will still be restricted to agriculture. As for the necessary package of supporting bills, Premier Siew has promised that various proposals to prevent drastic increases in land prices, speculation, or tax problems after transfer of land to other uses is allowed will be sent to the Legislative Yuan by the time the next legislative session opens on February 20.
COA officials emphasize that after the "Draft Revisions to the Agricultural Development Regulations" are passed, the primary task will be to do a complete survey to identify all current illegal use of agricultural land. At present, much vital farmland that is strictly prohibited for other purposes has in fact been misused. Observation of the principle of "agricultural use only for land zoned as agricultural land" must be rigorously ensured before restrictions on selling farmland are lifted.
Legislators are calling farmland liberalization "Taiwan's second land reform." Will it raise productivity? Will it undermine the nation? As Premier Siew emphasizes, land is a scarce resource of great importance. Besides looking after the interests of farmers, even more important are the interests of the whole people and the nation's overall development.
