The Evolution of Farmers’ Associations in Taiwan
In the year 1900, a group of farmers living in the Sanxia township of Taipei county established Taiwan’s first farmers’ association for the purpose of providing assistance and
19 Even among former tenants, over 38% reported no improvement since land reform; see Yang 1970: 92-128, 261-350, 559.
protection to tenant farmers.20 By 1908, there were 16 such organizations, which the colonial government promptly co-opted in order to facilitate agricultural development and rural resource extraction.21 During the first few decades of the 1900s, there was a proliferation of state-
controlled farmers’ organizations in Taiwan. And by 1944, a three-tier system of agricultural associations had been established, consisting of 1 provincial-level association, 8 county-level associations, more than 300 township-level associations, and 4,891 village-level agricultural practice societies.22 While there was some overlapping of responsibilities, each level of the system was intended to serve a different function. The provincial association was responsible for guiding all lower-level units; county associations were responsible for agricultural extension work; township associations were responsible for rural credit; and village agricultural practice societies were used to enforce the adoption of new technologies and cultivation practices.23
The creation of Taiwan’s farmers’ association system constituted a massive expansion of the state. The Governor-General of Taiwan (the Sotokufu) served as the executive director of the provincial agricultural association. This leadership structure was mirrored at the county and
20 The Sanxia FA gazetteer challenges the common narrative that the farmers’ association was established in opposition to colonial rule. The gazetteer provides evidence that despite a strong anti-Japanese movement in Sanxia, the farmer’s association was actually established in
cooperation with Japanese authorities for the purpose of stabilizing food production and restoring social order; see Lin 2004: 1-4, 40-45, 101-102.
21 De Lasson 1988: 9; Dong et al. 2006: 102.
22 Anderson 1950: 5; CAEC, Vol. 1, No. 12 (December 1952): 4-5.
23 Before 1944, there were thousands of township and village-level irrigation societies, credit cooperatives, and specialized cooperatives for farmers in the livestock, fishing, sugarcane, fruit and vegetable sectors. In 1944 colonial authorities merged all of them into a single
organization—the township agricultural association. In the postwar period, the term “farmers’ association” (nonghui ) replaced the term “agricultural association” (nongyehui ). For the sake of convenience, this chapter uses these terms interchangeably and refers to both as FAs.
township levels, with chief Japanese officials heading the local associations. In the villages, the government appointed the leaders of the agricultural practice societies and dispatched about 9,000 agricultural extension workers (1 for every 32 households) to oversee their work. The size of this system was second only to the government; by the early 1930s, the FAs employed 40,000 people.24
As an instrument of the state, colonial era farmers’ associations facilitated a shift from traditional subsistence agriculture to modern export agriculture. The associations, along with the police, orchestrated Taiwan’s green revolution by forcibly promoting the use of chemical
fertilizers and the cultivation of ponlai rice.25 The associations ensured that new technologies were distributed extensively, and despite high levels of taxation, farmers throughout Taiwan benefited from the gains in agricultural production. To sustain such high levels of production, farmers depended on the associations for access to critical inputs. For this reason, many Taiwanese farmers expressed a desire to rehabilitate the associations after the war.26
The war severely undermined the capacity of Taiwan’s farmers’ associations. Over 50% of FA-owned warehouses, fertilizer stations and rice mills were destroyed, and nearly all FA managers and technicians returned to Japan.27 In 1946, the newly established ROC government changed the structure of the FA system, creating separate farmers’ associations (nonghui ) and cooperatives (hezuoshe ) at the township level. In theory the farmers’ associations
24 Anderson 1950: 5, 42-43; CAEC, Vol. 1, No. 12 (December 1952): 4-5; Stavis 1974: 62; Ho 1978: 63-64.
25 Lee 1971: 41-42. 26 Ladejinsky 1977: 106.
were responsible for agricultural extension and the cooperatives were responsible for rural credit, but in practice the different organizations performed the same services and competed with each other for membership. Reform efforts were also handicapped by the fact that two different government departments, the Provincial Department of Agriculture and Forestry (PDAF) and the Provincial Department of Civil Affairs (PDCA), were both working on rehabilitating farmers’ organizations. To address these problems, in 1949 the ROC government re-established the FAs as singular,28 multi-purpose organizations, and put the PDAF in charge of FA work. The
government also took steps to revive the village-level associations, reorganizing the colonial-era agricultural practice societies into 4,903 small agricultural units (SAUs).29 These reforms simplified the FA system administratively, but they were not enough to restore FA operations. Many FAs, which in the past had been supported financially by the colonial government, soon developed sizable debts that hindered their ability to provide basic services.30 Desperate to revive the FAs, which were seen as critical to agricultural production, the government turned to the Sino-American Joint Commission on Rural Reconstruction for advice.
In 1950 the JCRR invited W. A. Anderson, a rural sociologist at Cornell University, to write a research report regarding Taiwanese farmers’ associations. The report contained several policy recommendations, which were adopted by the ROC government and remain the basis for
28 While the total number of FAs fluctuated over time, the KMT generally allowed only 1 FA to operate within each administrative district (1 per county/city/township), which is consistent with patterns of state-corporatist organization found elsewhere; see KMT 1954: 12.
29 CAEC, Vol. 2, No. 1 (January 1953): 60-61. Unlike production teams in China, SAUs were organized at the village-level, not the team or neighborhood-level. On average, each SAU had about 160 members; see Kuo 1964: 2.
30 Between 1949 and 1952, the number of FAs operating at a loss increased from 23 to 72, and the average size of FA debt increased from about 7,000 yuan to 62,000 yuan; see Guo 1984: 11, 128-129.
FA organization in Taiwan today. Anderson’s main finding was that non-farmers controlled most of the FAs,31 which is also confirmed by KMT documents that estimate the number of non- farmer members in 1950 to be as high as 80% in some places.32 The category “non-farmers” included merchants, rural industrialists, urban workers, and other professionals who were members of the rural credit cooperatives before they were merged with the FAs. To reduce the power of these groups, Anderson recommended that the FAs distinguish between associate members and regular members, the latter being defined as those who derive the majority of their income from farming. In August 1952 the ROC government adopted the “Provisional By-Law Governing the Improvement of Farmers’ Associations of Different Levels in Taiwan.”33 This law defined regular members as those deriving 50% or more of their income from farming,34 and it stated that only regular members could vote or stand for election to the FA board of directors. Associate members were eligible for election to the FA board of supervisors (a less powerful body) but were not allowed to hold more than one-third of supervisor positions.
In 1953-1954 the PDAF and the JCRR carried out a massive reorganization of the FAs, which entailed registering members, organizing elections, and training new FA officials. These efforts produced impressive results—total FA membership expanded to nearly 590,000
households; 372,000 former members were downgraded to associate membership; more than
31 Based on JCRR statistics, Anderson writes that in 1946-1949 about 18% of FA members were non-farmers. By 1950, after the farmers’ associations and cooperatives were merged, about 30% of FA members were non-farmers; see Anderson 1950: 27-28.
32 KMT 1954: 30.
33 For the full text of the 1952 FA law, see KMT 1954: 110-124. For an English translation, see Kuo 1964: 93-117.
34 Anderson actually recommended that regular members be defined as those deriving 70% or more of their income from farming; see Anderson 1950: 29.
28,500 new officials were elected; and about 95% of these officials were actual farmers.35 At first these reforms had a negative effect on FA finances. Membership fees, which were set at low rates in order to ensure that all farmers could join the FAs, failed to generate any significant revenue. Moreover, many non-farmers felt alienated by this new system and consequently withdrew their savings from the FA credit department. Since non-farmers controlled most of the wealth in rural areas, the ability to recruit them to reinvest in the FAs became the mark of a good FA leader.36 Aside from associate member savings, the FAs relied on the collection of service fees to finance their operations.
Farmers’ Association Services
Taiwan’s township-level FAs have four main service departments—agricultural
extension, credit, insurance, and supply and marketing (i.e. the supply of production inputs and the marketing of agricultural goods).37 Survey data from the 1950s reveals that FA services were widely used by farmers (see Table 3.3). From the farmers’ perspective, the strongest and most important FA services were agricultural extension and credit. As elaborated below, FA supply and marketing services mostly benefited the state, not the farmers.
35 These statistics include small agricultural unit officials but not SAU membership. SAU membership actually exceeded 720,000 households. By this measure the FA system
encompassed nearly all, if not 100%, of farm families; see CAEC, Vol. 2, No. 1 (January 1953): 60-61; KMT 1955a: 5; Miao 1957: 34.
36 Huang Dazhou 1981: 17, 22-29, 91-95, 102-103.
3.3: Percent Households Receiving FA Services in Taiwan, 1952-1959
Year 1952 1955 1959
Agricultural Extension Department
Obtained improved seeds 48.3 45.5 70.6
Obtained crop protection assistance 24.1 61.3 91.3
Obtained hog vaccinations 36.2 76.1 83.7
Received home visit from extension agent 27.6 46.1 74.2
Credit Department
Deposited savings in FA 29.3 35 67.4
Obtained loans from FA 46.6 57 75.6
Supply and Marketing Department
Purchased goods from FA 36.2 72.8 90.1
Sold goods through FA 15.5 29.8 53.6
Total Households Surveyed n=58 n=1200 N=1400
% Households with FA Membership 20.7 85.6 94.2
Note: Insurance departments were not added to the FAs until 1963.
Source: Data compiled from JCRR surveys, available in Guo 1984: 150-155.
FAs in the postwar period were used primarily to provide agricultural extension services to farmers. Though not on the scale of the colonial extension system, a sizable extension system was reconstructed after the war. By 1974 there were 548 paid FA extension workers and 3,895 volunteer FA extension workers.38 To facilitate communication, the township FAs distributed radios and copies of the JCRR monthly Harvest Magazine to the village chiefs and the heads of the SAUs.39 At the village level, the SAUs set up more than 6,000 farm discussion groups, 2,000 home economics clubs, and 3,000 4-H clubs.40 In addition, there were about 4,000 agricultural researchers employed by government agencies. According to Samuel Ho, “In 1960 the number
38 The irrigation associations also had about 4100 extension groups operating in the villages; see Li 1988: 296-298.
39 Gallin 1966: 44-45.
of agricultural research workers per 100,000 people active in agriculture was 79 in Taiwan, 60 in Japan, and only 4.7 in Thailand, 1.6 in the Philippines, and 1.2 in India.”
Guided by the JCRR, FA extension services resulted in several important achievements: Insecticides and fungicides became widely used in the 1950s, and chemical fertilizer
consumption increased from an average of 121 kilograms per hectare in 1935-1939 to 260 kilograms per hectare in 1965-1967.41 The multiple cropping index, which measures the planting of more than one crop in a single cultivated area, climbed from an average of 147.6 in 1946-1950 to 183.1 in 1966-1970. In other words, despite the fact that the total cultivated area did not expand much in the postwar period, the practice of intercropping almost doubled the total crop area in Taiwan.42 Building on the earlier green revolution, the postwar FAs continued to promote high-yield varieties of rice. In 1960 rice yields reached 3 tons per hectare—the second highest level in Asia after Japan.43 The FAs also created a comprehensive livestock improvement
program, complete with veterinary diagnostic centers, mass vaccinations, artificial insemination, hybrid hog production, and dairy farm development.44 As already mentioned, between 1952 and 1967 staple crop production increased 82%, livestock production increased 186%, fruit
production increased 476%, and vegetable production increased 107%.45
41 Ho 1978: 153, 155.
42 Intercropping refers to planting a second crop between the rows of the first crop before the first crop is harvested; see Ho 1978: 150, 353.
43 Wade 2004: 76.
44 Lee 1971: 45. For more information on livestock improvement and several other extension programs, see Wu & Jiao 1978.
Growth in the agricultural sector can also be attributed to the expansion of FA credit services. In the colonial period, the development of agricultural credit cooperatives constituted an extension of the organized money market to the countryside. By 1940, banks and cooperatives were providing over 50% of the rural credit in Taiwan. Rural credit services were badly damaged by the war, but in the early 1950s the ROC government injected capital into the rural credit market and charged FA credit departments with the task of mobilizing rural savings. Between 1949 and 1960, the amount of farm loans provided by the organized money market increased from 17% to 57%.46 The FAs in Taiwan, unlike most developing countries, greatly alleviated the problems of rural capital shortages, high-interest money lending, and rural debt.
In terms of other services, insurance departments were added to the FAs in 1963 to provide livestock insurance to farmers. Some FA supply and marketing departments also ran stores that sold daily use items like candy, beer, shoes, clothing, and household tools.47 These services, however, were considered unnecessary by many farmers and consequently did not generate much revenue for the FAs.48
From the Fertilizer-Rice Barter System to the Accelerated Rural Development Program
During the 1950s and 1960s, FA supply and marketing departments were primarily responsible for carrying out government “entrusted activities” (weituo yewu ), as opposed to “self-operated activities” (ziying yewu ). Entrusted activities were not the
46 Ho 1978: 63-64, 179-180. Huang Dazhou writes that in many places FA savings surpassed that of the commercial banks; see Huang 1979: 75.
47 Anderson 1950: 48; Guo 1984: 35-36. 48 Huang 1979: 67-69.
most important source of FA revenue, but they consumed the majority of FA resources.49 To clarify, the FAs in postwar Taiwan had some degree of financial autonomy. Unlike colonial-era FAs or the NACF in South Korea, they generally did not receive grants from the government. They collected fees from the government for carrying out entrusted activities, but most revenues were generated from extension, credit and other services.50 Also, JCRR financial support for the FAs was mostly limited to loans instead of grants.
The main entrusted activities were fertilizer sales and rice management. In 1948 the government established a “fertilizer-rice barter system” (feiliao huan gu zhidu ) by which farmers obtained chemical fertilizers in exchange for in-kind payments of rice. Through this system, the government established monopoly control over the fertilizer and rice markets, and it accordingly set artificially high prices for fertilizer and low prices for rice. On average, Taiwanese farmers were paid only 70% of world market prices for rice but were forced to pay about 50-100% more for fertilizer than farmers in America, Japan, India, Pakistan and Thailand.51 Despite the negative effects of this system on farm income,52 it had an overall positive effect on production by ensuring that chemical fertilizers were made available to all farmers. It also stabilized rice prices and provided the government with enough rice to feed the
49 Guo Minxue estimates that in 1952 about 80% of FA facilities were devoted to entrusted activities. In terms of FA finances, entrusted activities accounted for 46% and self-operated activities accounted for 54% of total service-related income. Guo also finds that inadequate compensation for entrusted activities contributed to FA debt in the 1950s-1960s; see Guo 1984: 19-20, 35-38.
50 Burmeister et al. 2002: 133-134.
51 Gallin 1966: 78; KMT 1972: 60-61; Ho 1978: 181; Amsden 1985: 86. For exact prices and exchange rates for fertilizer and rice from 1950 to 1972, see Huang 1992: 246.
52 Charles Hsi-chung Kao estimates that the barter system cost farmers 6 billion yuan between 1951 and 1961; see Kao 1967: 559-561.
military and the bureaucracy.53 In addition to rice collected through the barter system, the FAs were also responsible for rice collected from in-kind land payments, tax payments, loan payments, and compulsory rice purchases. In the 1950s and 1960s, the FAs helped the
government procure about 650,000 tons of rice per year, or about 50% of the surplus rice market (i.e. all rice not consumed by the agricultural sector).54
As an instrument of resource extraction the barter system was quite successful, but it also created a lot of problems for the FAs. The FAs received support from the Provincial Food
Bureau to process and store rice for the government, but they were frequently underpaid and forced to carry out these tasks at a loss. 55 To obtain fertilizer, the barter system required that a farmer pay 40% up front and 60% after the harvest. As a result, farmers would often have to store some of their rice for a few months in order to purchase fertilizer at the beginning of the next planting season. Farmers’ anxiety about rice storage gave rise to private grain agents who charged high interest rates to store and deliver rice to the FA. Moreover, farmers growing non- rice crops still had to use rice to obtain fertilizer from the FAs, and the fertilizer they did obtain was often not the right kind or amount. Again, private agents stepped in to correct these
inefficiencies.56 The emergence of private grain and fertilizer agents deepened farmers’ resentment towards the barter system.
53 Huang 1992: 67-68, 252-254, 262.
54 Ho 1978: 182. Taiwan’s barter system was similar to China’s unified purchase and sale system, but the developmental squeeze on Taiwan’s farmers did not result in food shortages like it did during the Great Leap Forward in China. For more on the Chinese system, see Shue 1980; Oi 1983.
55 A 1954 survey of 34 township FAs reveals that all of them had acquired debts from rice management activities, and 18 out of 34 had acquired debts from fertilizer distribution; see Guo 1984: 80-85, 99-100. See also Huang 1979: 138.
As the rural-urban income gap widened in the 1960s, the barter system was widely criticized for depressing rural incomes. It was finally abolished in September 1972 with passage of the Accelerated Rural Development Program (ARDP). The elimination of the fertilizer-rice barter system was a watershed event, marking a shift in government policy from squeezing the rural sector to protecting it. In other words, the ARDP marked the beginning of agricultural adjustment in Taiwan.
The ARDP, also known as the “Nine Measures for Accelerating Rural Construction,” outlined the following policy goals: eliminate the fertilizer-rice barter system and establish a “rice stabilization fund;” eliminate the educational surtax on rural land; make it easier for farmers to obtain loans; improve agricultural marketing services; increase rural public investment; accelerate the dissemination of new technologies; create specialized production zones (i.e. large farms); strengthen experimental research and extension work; and encourage the establishment of factories in rural areas.57 The government allocated 2 billion yuan in spending and 1.8 billion yuan in loans to the ARDP, with the aim of completing it in just two years (1973- 1974).58 The most immediate outcome of the ARDP was that domestic fertilizer and grain prices surpassed world market prices, resulting in record grain production levels in the mid-1970s.59 As certain programs such as the creation of specialized production zones proved to be more difficult, the government extended the ARDP for the 1975-1979 period, allocating 2 billion yuan to it annually.60 The ARDP was also supplemented by other adjustment policies, including import
57 KMT 1972: 1-4; De Lasson 1976: 116; Hsiao 1981: 10-11, 206-208; Yager 1988: 81, 95-98. 58 Ho 1978: 184-185.
59 Li 1988: 296; Yager 1988: 255; Huang 1993: 56. 60 Wu & Jiao 1978: 33; Liu 1991: 109-110.
restrictions, a wide range of subsidies, and community development. Community development, which is the subject of the next section, may be understood as a village improvement campaign that focused on upgrading rural infrastructure.