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Chapter Title: RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s Book Title: Mobilizing for Development

Book Subtitle: The Modernization of Rural East Asia

Book Author(s): Kristen E. Looney

Published by: Cornell University Press

Stable URL: https://www.jstor.org/stable/10.7591/j.ctvq2w06w.9

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49

2

RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s

In Taiwan, the defeated Kuomintang regime (KMT or Chinese Nationalist Party)

sought to regain control of mainland China by transforming the island into a

model province that would legitimize its right to rule. Knowing that the Chi-

nese Communist Party (CCP) had established its rural base in large part through

redistributive land reform, the KMT carried out a comprehensive land reform

program in the early 1950s, which led to the creation of a smallholder farm econ-

omy with extremely low levels of inequality. In addition to land reform, the KMT

built up a rural extension system to provide technical education and production

inputs to farmers. These institutions resulted in nearly two decades of accelerated

growth. According to Taiwan’s former president Lee Teng-hui, who is perhaps the

only agricultural economist to ever become a head of state, agriculture played a

textbook role in Taiwan’s development. It met the domestic demand for food,

accounted for a substantial share of exports, and provided capital and labor for

industrialization. 1 As one of the first countries in the post–World War II period

to achieve industrialized nation status, Taiwan stands out as an exemplary case

of successful development.

Taiwan’s rapid transition from a poor, agricultural society to a wealthy,

industrialized nation has received much scholarly attention. Robert Wade’s

research, for example, reveals how the government of Taiwan, like Japan, was

able to effectively “govern the market” and promote development through well-

formulated institutions and industrial policy. 2 While industrial policy is central

to many accounts of East Asian development, the role of rural policy has been

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50 CHAPTER TWO

less emphasized. Moreover, among the scholars who have written about Taiwan’s

rural sector, there is a tendency to focus narrowly on production and present

an instrumentalist view of agriculture. Consistent with Lee Teng-hui’s assess-

ment, the implication is that agriculture’s value lies in how much it contributed

to industrialization.

In this chapter, I explain Taiwan’s impressive record of rural development as

an important end in itself. First, I describe patterns of change in agricultural production, rural living standards, and the village environment. I show that

uneven progress across these different areas—the fact that growth in production

was greater and occurred earlier than improvements in the other areas—can be

attributed to the siphoning of rural economic gains for urban-industrial devel-

opment. Second, I link these outcomes with rural institutional arrangements,

asserting that while farmers benefited from favorable initial conditions, US sup-

port, and land reform, the more crucial factor behind Taiwan’s success was the

quality of its farmers’ organizations. The Taiwan Farmers’ Association (FA or

FAs) ensured that growth in agricultural production was achieved throughout

the countryside instead of being concentrated in a few places. It was also the

main actor behind policy changes that would advance the broader interests of

small farmers. I contend that the FAs’ power derived from somewhat contradic-

tory attributes: linkage with the state and autonomy from it. The remainder of

the chapter sheds light on what happened after the government’s urban-biased

policies were reversed in the 1970s. I examine Taiwan’s Community Develop-

ment Campaign and argue that the combination of appropriate goals, central

control over local authorities, and rural participation led to several positive out-

comes. Although the campaign did little to strengthen production or the rela-

tive income position of farmers (government pricing policies had a more direct

impact), it did have a major effect on improving village infrastructure, sanitation,

and housing.

This case study illustrates the conditions under which farmers’ organiza-

tions and campaigns are more likely to promote development. To be clear, very

few countries in the world have achieved the same level of success for the same

reasons, which makes Taiwan something of an outlier but also an interesting

case theoretically. In contrast with much of the peasant politics literature, which

focuses on the negative effects of state intervention and the informal founda-

tions of peasant resistance, Taiwan is an example of how small farmers can be

actively involved in development through formal organizations with close ties

to the state. 3 Related to this point, the FAs’ power can only be understood in the

larger political context of postwar Taiwan. Although the KMT was in some ways

more Leninist and repressive than it had been on the mainland, it allowed local

elections to take place for the entire martial law period (1950–1987). 4 After 1969,

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 51

elections were expanded to include a few seats in the parliament, and this open-

ing gave the FAs, which had been holding their own elections for over a decade,

an opportunity to influence policy. 5 Without the associations and their ability

to organize voters, it is unlikely that Taiwan’s national politicians would have

been as responsive to rural issues. Urban-biased policies would have remained

in place longer, and change would have been initiated only after rural conditions

had reached a point of crisis. In short, the FAs were Leninist transmission belt

organizations that actually incorporated farmers’ interests. 6 And while Taiwan’s

circumstances were unique, a general lesson is that bottom-up policy change is

possible in competitive authoritarian regimes. 7

The way the government responded is also significant. Of the three cases,

Taiwan perhaps most closely conforms to the expectations of the developmental

state model. Yet even there, at a time when the regime was becoming more tech-

nocratic and institutionalized, mass mobilization was used to accomplish state

goals. Chiang Ching-kuo, Chiang Kai-shek’s son and successor, could easily have

been mistaken for a mainland politician in this 1972 address to Taiwan’s farmers:

“Presently, as a result of the country’s industrialization, numerous difficulties

have befallen the agricultural sector. Although this may be an unavoidable part

of the economic development process, the government must take responsibility

for resolving these problems and improve your working and living conditions.

We have therefore decided to accelerate rural construction by mobilizing all gov-

ernment agencies and the power of the masses to help push forward this new

campaign.” 8 As this chapter demonstrates, the KMT’s rural policies were both

technocratic and mobilizational, and it was the combined effects of institutions

and campaigns that contributed to Taiwan’s success.

Changes in Taiwanese Rural Sector Development The transformation of agriculture in postwar Taiwan occurred in stages: recov-

ery (1945–1951), accelerated growth (1952–1967), and agricultural adjust-

ment (1968–present). This section broadly describes rural sector change in

the 1950s–1970s, the most significant decades for industrialization and rural

development.

Taiwan’s economic recovery from World War II was complicated by a major

and violent political transition from Japanese to Chinese Nationalist rule. After

fifty years of colonial governance (1895–1945), Taiwan was formally retroceded

to the Republic of China (ROC) on October 25, 1945. The Taiwanese, who ini-

tially celebrated the restoration of Chinese power, soon became disillusioned

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52 CHAPTER TWO

by government corruption, their exclusion from politics, and worsening eco-

nomic conditions. Inflation, as measured by the Taipei wholesale price index,

skyrocketed from 260 percent in 1946 to 3,500 percent in 1949. 9 Rising ten-

sions between Taiwanese and mainlanders erupted in February 1947, when

protests against police violence in Taipei escalated into an island-wide uprising

against the KMT. The government responded by dispatching troops to round

up and execute an estimated twenty thousand Taiwanese, including most of the

intellectual and social elite. The uprising and its brutal suppression, known as

the 2–28 Incident, badly damaged the KMT’s legitimacy, but it also strength-

ened the regime’s tenuous hold on the territory by silencing dissent. On

December 9, 1949, as the CCP emerged victorious from the Chinese Civil

War, Chiang Kai-shek relocated the ROC capital to Taipei, and by 1952 about

two million refugees (including half a million troops) from the mainland had

arrived in Taiwan. 10

The KMT’s immediate goals were to feed the army and the civilian popula-

tion, stabilize prices, and speed up the process of industrialization. In the 1950s,

more than half of Taiwan’s population lived in rural areas (about 4.7 million

out of 9.3 million people), and despite severe infrastructural damage from war,

agriculture was the largest and strongest sector of the economy. 11 It was also

the main source of exports and therefore a critical sector for earning foreign

currency, which could be used to finance industrialization. Major export crops

included rice, sugar, tea, fruits, vegetables, and citronella oil. 12 These circum-

stances pointed to an obvious policy agenda: to accomplish its goals, the KMT

would have to develop agriculture. And by all accounts, it succeeded.

Agricultural production was restored to prewar levels by 1951 and then

entered a fifteen-year period of accelerated growth, averaging 4.6 percent annu-

ally. Overall, between 1952 and 1967, staple crop production increased 82 percent,

and livestock production increased 186 percent. Output of fruits and vegetables

increased 476 percent and 107 percent, respectively, providing the basis for a

large-scale food-processing industry. Agricultural exports grew 128 percent and

constituted the majority of total exports until 1966, at which point the relative

decline of agriculture had become apparent. Yet even as Taiwan confronted the

problem of agricultural adjustment, the sector still performed strongly, averaging

3.2 percent annual growth between 1968 and 1979. 13

Most economists agree that Taiwan’s industrial takeoff would not have been

possible without the resources supplied by agriculture. From 1951 to 1955, the

net outflow of capital from agriculture constituted 75 percent of domestic capital

formation, and it remained a key source of capital until about 1970, when the

terms of trade shifted in favor of agriculture, meaning more money flowed into

the sector than left it. 14 With respect to labor, migration from the countryside

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 53

did not occur on a massive scale, but the transfer of surplus labor nonetheless

accounted for about 47 percent of the increase in the nonagricultural workforce

in the 1950–1960s. 15

It is remarkable that Taiwan was able to generate a rural surplus given the

constraints on agriculture, namely limited land resources and a high population

density. Taiwan’s topography consists mainly of rugged mountains and foothills

that are unsuitable for agriculture. Less than one-third of its land is arable, and

most of that land was brought under cultivation during the colonial era. In the

postwar period, Taiwan’s cultivated land area remained nearly constant, expand-

ing only slightly from 23 to 26 percent between 1945 and 1975. Despite these

limited resources, the rural population grew by about 65 percent during the same

period, from 3.4 to 5.6 million. 16 According to Samuel Ho, agricultural growth

was accomplished through the widespread adoption of intercropping (i.e., plant-

ing a second crop between the rows of the first crop before the latter is harvested),

mechanization, and the intensive use of chemical inputs such as fertilizers, insec-

ticides, and fungicides. His research shows that the contributions of land and

labor were insignificant compared to increases in working capital or chemical

inputs, which accounted for nearly 60 percent of all gains in production between

1951 and 1970. 17

The government used several mechanisms to extract the surplus from pro-

ducers, including monopoly control over the sale of fertilizers and compulsory

rice purchases. Under the rice-fertilizer barter system (1948–1972), Taiwanese

farmers were paid only 70 percent of world market prices for rice and were forced

to pay about 40 percent more for fertilizer than Japanese, Dutch, American, or

Indian farmers. 18 Such price distortions, also known as price twists or price scis-

sors, had a negative effect on farm incomes, which increased slightly after land

reform and then remained constant until the barter system was phased out.

In fact, virtually all gains in rural incomes during this period can be traced to the

rise of off-farm employment opportunities. 19

Rural living standards and the village environment improved at a slower pace

than agricultural production. Besides unfavorable pricing policies, another prob-

lem facing rural households was the declining size of Taiwan’s farms. Although

land reform drastically reduced tenancy rates and created a more equal society,

it also resulted in very small landholdings, made even smaller by the postwar

population boom. In 1952, the average farm size was 1.29 hectares (3.19 acres);

by 1976, it was only 1.06 hectares (2.62 acres). 20 Significantly, about 42 percent

of farmers actually cultivated less than 0.5 hectares (1.24 acres), an amount too

small to support a typical family. 21 If it were not for Taiwan’s decentralized pat-

tern of industrialization, which started under the Japanese with the development

of the food-processing sector, rural households probably would have struggled

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54 CHAPTER TWO

to survive. Unlike South Korea, where industry was concentrated in the cities,

Taiwanese farmers could engage in part-time farming and supplement their

incomes with factory work. 22

Despite the rise of part-time farming and the diversification of incomes, most

rural households perceived that their overall welfare was slow to improve. In 1964,

sociologist Martin M. C. Yang conducted a survey of rural living conditions in Tai-

wan, collecting data on nutrition, water, housing, clothing, transportation, com-

munication, and health care for a sample of 3,075 households. To assess the impact

of land reform on different types of households, the survey targeted six groups:

former tenants, tenants, original owner-cultivators, hired farm laborers, former

landlords, and nonfarmers. With the exception of former tenants and nonfarm-

ers, the majority of households from all other groups reported no improvement

or even a deterioration of living conditions since land reform. In addition, over 38

percent of former tenants reported no improvement in living conditions, a sur-

prising finding given that they had the most to gain from land reform. Yang asserts

that cultural modesty, rising expectations, and population growth explain some of

the dissatisfaction, as rural families incurred more debts related to an increase in

marriages, new home construction, and education costs. Consumption patterns

in some of the specific areas surveyed also reveal a story of gradual progress rather

than decline. 23 While these explanations for the gap between perceived and actual

living conditions are reasonable, one thing the analysis fails to mention is how

economic policy during that time was designed to exploit agriculture.

Aside from the hidden taxes on rice and fertilizer just mentioned, several other

measures also suggest that urban bias was a problem in Taiwan. For example,

data on the intersectoral terms of trade, calculated as the prices received for farm

products divided by the prices paid for nonagricultural commodities and ser-

vices, show that conditions were unfavorable toward farmers until about 1975. 24

Similarly, the nominal and relative rates of assistance for agriculture (the NRA

and RRA) were negative in Taiwan until about 1970, meaning that domestic farm

product prices were well below international market prices and that government

assistance to agriculture was far less than its assistance to industry. 25 Lastly, the

distribution of gross fixed capital formation reflects how government investment

was strongly skewed toward industry: while agriculture’s share declined from

25 to 8 percent between 1951 and 1973, industry’s share increased from 45 to 67

percent during the same period. 26

As a result of this policy environment, farmers did not benefit as much as

they should have from the gains in agricultural production, and the rural-urban

income gap widened. The average rural household already earned 25 percent

less than the average urban household in 1953. By 1968, the difference was

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 55

TABLE 3. Agricultural and Industrial Sector Change in Taiwan, 1952–1981

YEAR 1952 1957 1962 1967 1972 1977 1981

Population

Total population (millions) 8.1 9.7 11.5 13.3 15.3 16.8 18.1

Rural population (millions) 4.3 4.8 5.5 5.9 5.9 5.6 5.0

Share of rural population in total

population (%) 53.1 49.5 47.8 44.4 38.6 33.3 27.6

GDP1

Share of agriculture in GDP (%) 35.9 31.7 29.2 23.8 14.1 12.5 8.7

Share of industry in GDP (%) 18.0 23.9 25.7 30.8 40.4 43.7 44.5

Exports

Share of agricultural exports in total

exports (%) 91.9 87.4 49.5 38.4 16.7 12.5 7.8

Share of industrial exports in total

exports (%) 8.1 12.6 50.5 61.6 83.3 87.5 92.2

Employment

Share of agricultural workers in

economically active population (%) 61.0 58.2 55.3 49.4 39.9 33.8 28.0

Share of industrial workers in

economically active population (%) 9.3 10.4 11.5 14.6 19.8 26.5 31.2

42 percent. 27 It was also in the late 1960s that Taiwan entered its agricultural

adjustment phase. The primary sector’s share of GDP, exports, and employ-

ment all dropped significantly, and the rate of out-migration increased. 28 Table 3

provides a snapshot of Taiwan’s structural economic transformation in the

1950s–1970s and shows that by 1981 Taiwan had emerged as an industrialized

country. What is unfortunately not revealed by this kind of macroeconomic data

is that the 1970s was a good decade for farmers.

Following the passage of the Accelerated Rural Development Program (ARDP)

in 1972, the rice-fertilizer barter system was abolished. This was a watershed

event, marking a shift in government policy from squeezing the rural sector to

protecting it. The nominal rate of protection for agricultural products increased

AVERAGE ANNUAL GROWTH RATES 1953–1962 1963–1972 1973–1981

GDP growth rate (%) 7.4 11.0 7.4

Agricultural production growth rate (%) 4.8 4.0 2.1

Industrial production growth rate (%) 11.7 18.6 11.0

Source: Taiwan Statistical Data Book 1982, 4, 8–9, 21, 34, 57, 60, 77, 189.

1 GDP data based on constant 1976 market prices. Agriculture includes the farming, forestry, fishery, and livestock sectors. Industry includes the manufacturing, mining, and public utilities sectors.

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56 CHAPTER TWO

rapidly in the 1970s, eventually reaching 52 percent in 1980 (14 percentage points

higher than the average for Western European countries that year). 29 The rural-

urban income gap, though it did not disappear, narrowed to 29 percent by 1983. 30

Because of their improved income position, many rural households were able to

purchase modern appliances, such as televisions, washing machines, refrigera-

tors, and telephones. 31

The government also launched the Community Development Campaign to

upgrade the village environment. Some progress was made in this area during

the 1950s–1960s, but only on a limited, experimental basis. Local programs were

scaled up to a national campaign in the 1970s, with dramatic effect. Millions of

people benefited from housing renovation projects, including the installation of

toilets, showers, and drainage pipes, as well as the paving of rural roads, the con-

struction of rice drying areas, and the implementation of community sanitation

programs, to name just a few of the campaign’s achievements.

The rest of the chapter explains how Taiwan realized these various outcomes.

It analyzes the institutions that facilitated rural development, examines the polit-

ical logic behind the adoption of pro-rural policies, and discusses why the Com-

munity Development Campaign was ultimately successful.

Rural Institutions and the Farmers’ Associations In the 1950s, Taiwan’s rural economy was transformed from one dominated

by tenant farming to one of owner-cultivators with secure private property

rights to land. This system of smallholder farming, combined with the Farm-

ers’ Associations and the extension services they provided, led to impressive

gains in agricultural production. The importance of land reform in shaping

these institutions is undeniable. It reduced tenancy and equalized the distribu-

tion of landholdings, which allowed Taiwan to avoid the problem of bimodal

development—a dichotomy between wealthy, large-scale commercial farm-

ers on the one hand, and poor, small-scale subsistence farmers on the other.

Even more crucial than land reform, however, was the quality of the Farm-

ers’ Associations themselves. The FAs possessed both linkage and autonomy,

which enabled farmers to meaningfully participate in the rural policy process.

In terms of linkage, they had an encompassing membership base, strong ties to

the village community, and close connections with higher levels of the state. In

terms of autonomy, their leaders were professional farmers, who were elected

by association members, and they had a certain degree of financial and manage-

rial independence from the state. Because of these qualities, the FAs facilitated

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 57

extensive, long-term agricultural development, and they eventually succeeded

at lobbying the government for pro-rural policies that led to gains in other areas besides production. But before getting into how the FAs functioned and why

they were so effective, it is necessary to address the influence of external actors

on Taiwan’s rural development.

Japan and the United States

Most scholars agree that Japanese colonialism had an overall positive impact on

Taiwan’s economic development. As explained in the previous chapter, Japan

invested in modern systems of transport, taxation, finance, education, and

administration. It controlled the most lucrative parts of the economy (the sugar

industry) and extracted heavily from the rural sector, but it did not conform to

the normal colonial pattern of neglecting agriculture. Because of Taiwan’s sub-

tropical climate, which allowed for the cultivation of several crops a year, it was

designated as a base for agriculture that would supply Japan’s domestic market

with cheap food. In Tun-jen Cheng’s words, “Japan took a high cost and high

yield approach to colonizing Taiwan, pursuing extensive programs for economic

growth before exploiting the proceeds.” 32 A major component of this high-cost

approach was the creation of state and community-based rural extension organi-

zations. Although their operations were disrupted during the war, the KMT was

able to quickly draw from these preexisting resources in setting up the Farmers’

Associations.

Historical accounts of the FAs usually begin in the year 1900, when a group of

tenant farmers in Sanxia Township, Taipei County, founded a formal association

for mutual protection and assistance. By 1908, there were sixteen such organiza-

tions, which the colonial government promptly co-opted in order to facilitate

agricultural development and resource extraction. Interestingly, the Sanxia Fam-

ers’ Association Gazetteer challenges the common narrative that the association

first emerged in opposition to colonial rule, providing evidence that despite anti-

Japanese sentiment in the area, its purpose was to work with authorities to stabi-

lize food production and maintain social order. 33 If this account is accurate, then

co-optation was probably not difficult, a point supported by the proliferation of

state-controlled farmers’ organizations during this period. Eventually, all orga-

nizations related to irrigation, credit, and specific farm products were merged

into a single organization, the Taiwan Agricultural Association. It consisted of

one provincial-level association, eight county-level associations, more than three

hundred township-level associations, and nearly five thousand village-level agri-

cultural practice societies. The governor-general of Taiwan (the sotokufu ) served

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58 CHAPTER TWO

as executive director of the provincial association, and Japanese officials were

likewise in charge of the local associations. The size of this institution was second

only to the government: by the early 1930s, it employed about forty thousand

people. 34

Through this system, the colonial government orchestrated a green revolution

in Taiwan. Irrigated farmland expanded from 32 to 64 percent of total cultivated

land, which meant that farmers who previously engaged in dry farming (the cul-

tivation of wheat, soybeans, sorghum, sweet potatoes, etc.) switched to primarily

growing rice. 35 Japan also simplified Taiwan’s land tenure system by buying out

large absentee landlords with government bonds and conferring property rights

on smaller, cultivating landlords. Under pressure to meet regular tax payments,

this new landlord class worked with colonial authorities and the agricultural

associations to stimulate production by promoting new seed varieties, fertiliz-

ers, and cultivation techniques among their tenants. 36 The spread of chemical

fertilizers and ponlai rice, in particular, helped to raise the average rice yield by

45 percent. 37

As a result of these innovations, agricultural output climbed from 2.9 percent

annual growth in the 1910s to 5.1 percent in the 1920s. It then slowed down a

bit to 3.5 percent in the 1930s. 38 By comparison, agricultural output in Japan

grew 2 percent annually between 1900 and 1920, and only 0.9 percent annu-

ally between 1920 and 1935. 39 Both the colonial state and farmers benefited

from these changes. About 16 percent of Japan’s total rice supply and more than

80 percent of its sugar supply came from Taiwan. 40 And while Taiwanese sources

tend to emphasize the poverty and insecurity inherent in the prewar tenancy

system, there are some reports that Taiwanese farmers may have enjoyed a higher

standard of living than Japanese farmers in terms of housing, clothing, bank

deposits, and other indices. 41 The ample availability of credit and technical ser-

vices led many Taiwanese farmers to express, once the war was over, that they

were better off under Japan, a sentiment that surely influenced the KMT’s deci-

sion to rehabilitate the associations. 42

Another key legacy of Japan was the development of Taiwan’s rural indus-

tries. In 1930, the food-processing sector, which was geographically dispersed,

accounted for 64 percent of all registered factories, 55 percent of factory employ-

ment, and 76 percent of total factory production. Additionally, as Japan became

more involved in World War II, it moved several of its factories to Taiwan for

security purposes. These included shipbuilding, oil refining, pulp, basic met-

als, textiles, and fertilizers. So, while Taiwan was still predominantly rural at the

end of the colonial period, it nonetheless had a foundation for future industri-

alization. 43 Importantly, the continued development of industry after the war,

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 59

especially food processing and light industry, helped to mitigate the negative

effects of the KMT’s developmental squeeze on agriculture by generating alter-

native sources of rural income. In 1958, more than 95 percent of rural incomes in

Taiwan derived from farming; by 1979, about 85 percent derived from nonfarm

sources. 44 The growth of rural industry, of course, did not prevent the issue of

depressed farm incomes from becoming politically contentious in the late 1960s,

but it did perhaps delay bottom-up demands for policy change.

As for the United States, its main contribution to Taiwanese rural develop-

ment was to offer aid and policy advice to the KMT. In total, between 1949

and 1968 (the entire aid period), Taiwan received nearly US$4.2 billion in aid,

of which approximately $2.4 billion went to the military and $1.8 billion to

economic assistance. Within the budget for economic assistance, Public Law

480 food aid amounted to about $387 million, a small sum compared to South

Korea’s $1.7 billion in food aid. 45 Despite the negative effects of food aid on

development—in Taiwan, US imports depressed the production of wheat, cot-

ton, and soybeans—Hsin-huang Michael Hsiao suggests that US aid to agricul-

ture was the most productive part of the whole aid program. Less than a quarter

of all economic aid went to agriculture, but it financed nearly two-thirds of

domestic capital formation in that sector. The Sino-American Joint Commis-

sion on Rural Reconstruction (JCRR) also operated on a relatively small budget,

funding over six thousand projects with $366 million in grants and loans. 46

The commission was originally made up of two Americans and three Chi-

nese members. After the commission moved from mainland China to Taiwan in

1949, a number of leadership changes occurred, and the proportion of Chinese

among the general staff increased, but there was always at least one American

commissioner. 47 One theme that emerges from the oral histories of JCRR leaders

is that the commission’s success was related to its being run by technical experts

who were not beholden to the American or Taiwanese governments, and it could

directly cooperate with any public or private institution. 48 The JCRR was there-

fore more isolated from political pressure than an ordinary government agency.

Yet, at the same time, it had access to central officials and participated in the

drafting of several important policies, most notably land reform and the reorga-

nization of the FAs.

Land Reform

When the Nationalists first arrived in Taiwan, tenant farming was the dominant

form of agriculture. In 1949, only 36 percent of farm families were owner-

cultivators. About 25 percent were part owners, part tenants, and 39 percent

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60 CHAPTER TWO

were full tenants. Population growth, exaggerated by the sudden influx of

mainland refugees, had the effect of raising rents and reducing farm acreage

to the point of threatening tenants’ basic subsistence. Farm rents, typically

50 percent of the value of the main crop, had climbed to 70–75 percent during

the political transition period. It was in this context that Wolf Ladejinsky, a US

Department of Agriculture official, made the following observation about the

countryside (the year was 1949): “Of all the farmyards I have seen in the Far

East, Southeast Asia, and in the Middle East, that of the average Taiwanese ten-

ant is among the worst, both in appearance and in equipment. Tenants’ huts,

so-called barnyards, equipment, and livestock, as well as their health point to

nothing but poverty.” 49 Ladejinsky had been invited by the JCRR to offer advice

on land reform, a policy that he had just overseen in Japan. The recommenda-

tions, which the KMT took seriously and implemented, included the formation

of democratically elected landlord-tenant committees to carry out the policy

and a gradual progression of reforms, from rent reduction to the redistribution

of public and private lands.

The KMT’s responsiveness stemmed from a few considerations. First, the

party was aware that its failed rural policies had cost it the mainland and could

possibly cost it Taiwan if the communists managed to infiltrate the island. Sec-

ond, the party’s ideology supported equal access to land resources, as detailed by

its founder Sun Yat-sen in his writings and speeches on the “people’s livelihood”

principle. The KMT’s experimentation with rent reduction in Zhejiang, Fujian,

Sichuan, and a few other places in the 1920s–1940s, though ultimately unsuc-

cessful, was partly motivated by this idea. 50 Third, President Truman himself put

direct pressure on Chiang Kai-shek to act on US recommendations, explicitly

linking agricultural improvement to national security. 51 Finally, unlike the situa-

tion in China, Chiang’s government had no previous ties to the landed classes in

Taiwan, and this autonomy from traditional power holders prevented opposition

to the reforms.

Land reform led to an immediate boost in household incomes and a signifi-

cant redistribution of land resources. The rent reduction program capped all

tenant rents at 37.5 percent of the value of the main crop (an amount intended

to achieve a 25 percent reduction in rent based on the assumption that it was

50 percent under normal circumstances). The next step was selling off public

lands formerly held by the colonial government and the Taiwan Sugar Cor-

poration. While these two policies were both successfully implemented, by

far the most consequential component of the whole land reform agenda was

the Land-to-the-Tiller program. It placed limits on the scale of ownership

(2.9 hectares or 7.2 acres) and strengthened tenant rights, yet its main effect

was to dramatically reduce the rate of tenancy. In 1953, the majority of Taiwan’s

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 61

farm households became owner-cultivators, thus laying the foundation for a

more equitable pattern of development (see table 4). 52 Former landlords were

compensated with commodity bonds and shares in government enterprises,

which turned out to be worth much less than the market value of their land,

but nevertheless ensured that some of their wealth was shifted to the industrial

sector. 53

As already suggested, however, land reform was not a panacea for the rural

economy. It resulted in extremely parcelized plots and an overall reduction

in farm size, such that it became practically impossible for families to survive

on farm income alone. Price distortions further stymied long-term growth in

incomes, and even the medium-term effect on living standards was questionable.

Bernard Gallin, in his classic study of a Taiwanese village, writes: “At the time of

the research (1958) at least, this [Land-to-the-Tiller] act in itself had not brought

about any noteworthy increase in the standard of living.” He explains that besides

landlords, two other groups were negatively affected. First, before the reforms,

tenants of the Taiwan Sugar Corporation’s holdings paid only 25 percent of the

TABLE 4. Extent and Impact of Land Reform in Taiwan

POLICY (A) 37.5% RENT REDUCTION, 1949–1952

(B) SALE OF PUBLIC

LAND, 1948–1958

(C) LAND- TO-THE-TILLER

PROGRAM, 1953

TOTAL SHARE OF CULTIVATED AREA AND HOUSEHOLDS

AFFECTED BY REDISTRIBUTION (B+C)

Share of cultivated area

affected (%) 29.2 8.1 16.4 24.5

Share of farm households

affected (%) 43.3 20 27.9 47.9

Total revised lease contracts: 377,364 (100%)

Total cultivated area affected by redistribution: 208,753 hectares (515,840 acres)

Total farm households affected by redistribution: 334,511

Total landlord households affected by redistribution: 106,049

YEAR 1949 1953 1965 1975

Share of owner-cultivators in total farm

households (%) 36 55 67 82

Share of part owners–part tenants in

total farm households (%) 25 24 21 9

Share of full tenants in total farm

households (%) 39 21 12 9

Source: Data for the upper half of the table come from Ho 1978, 163; M. Yang 1970, 81. For the lower half see Taiwan Agricultural Statistics 1966, 9; Taiwan Agricultural Statistics 1977, 2.

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62 CHAPTER TWO

value of the main crop in rent. The reforms thus did not generate any substan-

tial savings for them, and given the taxes incurred as new owners and the rising

costs of production, many families saw their yearly expenses increase. Second,

jointly owned landholdings, which in his research site accounted for 62 percent

of all land resources, were expropriated in the same way as property belonging to

landlords. A single plot could have anywhere from two to hundreds of owners,

and many joint owners suffered losses because of minimal or no compensation. 54

These findings indicate that the results of Yang’s survey discussed earlier might in

fact reflect real dissatisfaction with post-reform conditions rather than cultural

modesty or rising expectations.

In short, the effects of land reform were mixed. Though in many ways it was

an incredible achievement, it was not sufficient for sustained rural development.

And while it reduced inequality within the countryside, it offered no solution to

the growing rural-urban gap. For these reasons, the Farmers’ Associations were

more important in the long run.

The Farmers’ Associations

After a few years of unsuccessful attempts to revitalize the Farmers’ Associations,

the KMT solicited help from the JCRR. The government tried, for example, to

create separate extension and credit associations, but in practice they performed

the same functions and wasted resources competing for membership. Coordi-

nation problems also emerged among different government agencies involved

in FA work. To resolve these problems, in 1949 the government reverted to the

Japanese model of having a single organization with branches at each level of

the administration, and it entrusted one department, the Provincial Department

of Agriculture and Forestry (PDAF), with all FA-related work. 55 Institutional

streamlining was not enough, however, to restore operations. As a result of the

war, over 50 percent of FA warehouses, fertilizer stations, and rice mills had been

destroyed, and nearly all association managers and technicians had returned to

Japan. Because of limited financial support from the ROC government, many

associations developed sizable debts, which further hindered their ability to

provide services. 56 The US entered into the picture in 1950, when JCRR con-

sultant Walfred A. Anderson published a report containing several suggestions

that remain the basis for FA organization today. The report’s main finding was

that nonfarmers (merchants, industrialists, urban workers, etc.) controlled the

majority of local associations, a point confirmed by KMT documents estimat-

ing the share of nonfarmer members to be as high as 80 percent in some places.

It advised that the FAs distinguish between associate and active members, with

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 63

the latter defined as those deriving most of their income from farming, and that

organizational control be given to active members. 57

Around the same time as land reform, the government carried out a massive

reorganization of the Farmers’ Associations. First, in August 1952, it passed the

“Provisional By-Law Governing the Improvement of Farmers’ Associations of

Different Levels in Taiwan.” In keeping with Anderson’s views, it defined regular

(i.e., active) members as those deriving 50 percent or more of their income from

farming and 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 in charge of internal audits, but

were not allowed to hold more than one-third of supervisor positions. 58 Next, the

PDAF and JCRR set about registering members, organizing elections, and training

officials. These efforts, which were completed between October 1953 and March

1954, produced impressive results—372,000 existing members were downgraded

to associate status; total membership at the township level expanded to about

590,000 households; and nearly 29,000 new officials were elected, of whom

95 percent were actual farmers. At the village level, the agricultural practice soci-

eties that had been active during the colonial era were revived (and renamed

small agricultural units or SAUs), and they quickly expanded their membership

base to over 720,000 households. By this measure, the FAs encompassed the

entire farm population. 59

The democratization of FA governance, together with land reform, solidified

the position of smallholders in the rural economy and had a profound impact

on development. Following some initial financial difficulties—caused by low

membership fees and the withdrawal of savings by nonfarmers who felt alien-

ated under the new system—revenues picked up as the associations took on

various functions and earned people’s trust. While skilled FA leaders were able to

convince nonfarmers to reinvest in the associations, a lot of revenue came from

regular member deposits and the collection of service fees. 60 Each township asso-

ciation was divided into four main departments: agricultural extension, credit,

insurance, and supply and marketing. Since this last department was responsible

for selling fertilizers and purchasing rice under the barter system, it is fair to say

that the FAs, similar to marketing boards in Africa, were used to impose hidden

taxes on agriculture. However, the associations were not purely extractive institu-

tions. They supplied critical inputs to farmers and, beginning in the 1970s, were

used to channel subsidies and other resources to the rural sector. Smallholder

control also meant that services were more accessible than is usually the case in

developing countries, where inputs are directed by the state to large farmers or

to specific geographic areas chosen for political reasons. 61 Survey data from the

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64 CHAPTER TWO

1950s confirms that FA services were very widely used. It also shows that farm-

ers were in regular contact with FA staff. In 1959, over 74 percent of households

surveyed by the JCRR reported receiving a home visit from an extension agent in

the past year (see table 5).

To summarize just a few of the FAs’ accomplishments: First, they spearheaded

an enormous outreach and research program. They distributed radios, news-

papers, and magazines to the village SAUs; set up thousands of farm discussion

groups, home economics clubs, and 4-H clubs; and provided assistance to a large

corps of agricultural researchers. 62 Samuel Ho writes: “In 1960 the number 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.” 63 Second, building on the prewar green revolution, they promoted

intercropping, mechanization, high-yield varieties of rice, and chemical inputs.

By the early 1970s, rice yields reached 3.5 tons per hectare, one of the highest

levels in the world. 64 Third, they created a comprehensive livestock improvement

program, equipped with the latest innovations in veterinary diagnostics, mass

vaccinations, and scientific breeding. 65 Fourth, FA credit departments greatly

alleviated the problems of rural capital shortages and high-interest money lend-

ing. Between 1949 and 1960, the amount of farm loans provided by the organized

money market increased from 17 to 57 percent. 66

The effectiveness of Taiwan’s rural organizations stemmed from two essen-

tial qualities: linkage and autonomy. With regard to linkage, I have already

TABLE 5. Percent Households Receiving FA Services in Taiwan, 1952–19591

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 29.3 35 67.4

Obtained loans 46.6 57 75.6

Supply and Marketing Department

Purchased goods from the FA 36.2 72.8 90.1

Sold goods through the FA 15.5 29.8 53.6

Total households surveyed n=58 n=1200 n=1400

Share of households with FA membership 20.7 85.6 94.2

Source: Data compiled from JCRR surveys, available in Kuo 1984, 150–55.

1 Insurance departments were added in 1963, so those services are not listed.

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 65

explained how the FAs had an encompassing membership base and an orga-

nizational presence in all of Taiwan’s villages through the SAUs. As subsequent

chapters will show, this was simply not the case in South Korea or China. Still, it

would be a mistake to characterize the FAs as village organizations. They were,

more accurately, parastatal institutions with close ties to the villages. Though

technically separate from the government, they assumed responsibility for cer-

tain entrusted activities (maintaining the barter system, primarily) and were

involved in virtually all aspects of rural policy implementation. Drawing from

social and political theory, the FAs can be understood as having a corporatist

relationship with the state. They were hierarchically structured, with only one

association operating in a given territory. The provincial FA could dissolve any

poorly performing unit in the system, and each association’s program budget

had to be approved by the unit above it. Farmers were also forbidden from form-

ing alternative organizations. These rules were designed to facilitate top-down

supervision of the FAs and to prevent the growth of civil society organizations

that might challenge the state. In exchange for political loyalty, the FAs were

given access to key resources, such as funding and new technologies, and they

were granted limited representation in the Legislative Yuan. It seems that instead

of being put off by this structure, many farmers actually welcomed the supervi-

sion by higher-level authorities because it reassured them that programs would

be properly administered (for illustrations of the FAs’ structural features, see

the appendix). 67

Of course, institutional linkage with the state does not guarantee political

influence. Rather, the FAs’ ability to provide feedback, channel discontent, and

initiate change was a product of their autonomy. First of all, they were the only

(quasi-) public institution in postwar Taiwan that was not controlled by main-

landers. Even though mainlanders composed 40 percent of the provincial-level

FA staff, there was usually just one mainlander working for the local associa-

tions, a security agent in charge of guarding the granary and reporting on signs

of unrest to the government. 68 Second, with the exception of a few spots on

the board of supervisors, all FA leaders were professional farmers chosen by

members of their own communities. At the village level, direct elections were

held every four years for SAU leaders and township FA representatives. Above

the villages, the principle of indirect representation was employed: assemblies

of representatives would elect a board of directors, a board of supervisors, and

representatives to the next level in the system. Third, the FAs not only chose

their own leaders but also managed their own finances. Whatever funds they

received from the government or the JCRR usually came in the form of loans

instead of grants, and most revenues derived from their own commercial activi-

ties and services, not from government-entrusted activities. The FAs’ (albeit

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66 CHAPTER TWO

limited) independence from the state in terms of finances and leadership is yet

another way in which they differed from their counterparts in South Korea and

China. 69

FA elections were also highly contested, and despite some downsides such

as intervention on the part of local factions and the KMT, the overall effect of

elections was to increase farmers’ participation in politics and sense of owner-

ship over the associations. Joseph Bosco describes the FA system as “a semi-

governmental organization that controls much patronage, so its political offices

are sharply contested by local factions.” 70 Indeed, factions competed fiercely

for spots on the assembly of representatives and board of directors. The board

would elect a chairman, who in turn appointed a general manager. The chair-

man’s pick had to be approved by two-thirds of the board and could in theory be

a capable nonfarmer, although the main criterion for selection was loyalty to the

chairman. These individuals were in many ways as powerful as the head of the

township government. They determined FA staffing and distributed such items

as cash crop licenses, construction contracts, loans, and community develop-

ment funds.

To prevent local factions from gaining too much power, the KMT recruited

them to join the party. In 1954, during the first round of FA elections, tempo-

rary party organizations were created to recommend and enlist candidates. As a

result, the KMT captured the majority of leadership positions, setting a pattern

that continues through the present day (see table 6). 71 The regime also inter-

vened by limiting campaign activities to the ten days leading up to the election,

setting education and training requirements for general managers, and monitor-

ing association activities through its own security agents. 72 While none of these

measures necessarily eliminated clan-based corruption or the oppression of

minority factions, the combination of near-universal membership and central-

ized supervision of the FAs meant that local leaders were less likely to engage in

extreme forms of patronage. 73 In other words, the KMT superimposed its own

patron-client relationship on the FAs as a way of mitigating local capture by

dominant factions.

Moreover, factional and party interference did not detract from a general per-

ception among farmers that the FAs were their organizations. According to JCRR

survey data (the same used in table 5), the share of farmers who stated that “the

farmers own the FAs” increased from 1.7 percent in 1952, to 56.1 percent in 1955,

to 79.5 percent in 1959. The share of farmers who stated that “the chairman of

the FA board of directors is determined by election” also increased from 20.7 per-

cent in 1952, to 66.5 percent in 1955, to 80.2 percent in 1959. Farmers gave simi-

lar responses when asked about FA representatives. In addition to farmers’ sense

of ownership and control over the FAs, the survey data suggest that farmers were

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 67

TABLE 6. Extent of KMT Representation in Taiwan’s FAs (1954 FA Election Results)

(A) TOTAL ELECTED

(B) KMT CANDIDATES1

(C) KMT RECRUITS2

SHARE OF KMT MEMBERS AMONG

ELECTED FA OFFICIALS (B + C) / A

Village SAUs

SAU head 4,875 1,939 1,642 73%

SAU vice-head 4,875 1,456 1,603 63%

Township FA representatives 16,916 6,421 4,141 62%

Township FAs

FA directors 3,805 2,193 862 80%

FA supervisors 1,086 617 22 59%

County FA representatives 1,349 782 351 84%

County FAs

FA directors 386 287 62 90%

FA supervisors 124 82 27 88%

Provincial FA representatives 89 69 0 78%

Provincial FA3

FA directors 33 33 0 100%

FA supervisors 10 10 0 100%

TOTAL 33,548 13,889 8,710 67%

Source: Central Committee of the Kuomintang 1954, 59–60.

1 Candidates who were members of the party before winning the election.

2 Candidates who joined the party after winning the election.

3 FA rules allowed for four representatives to the Legislative Yuan. Based on this data, it is reasonable to assume that all of them were KMT members.

at least minimally engaged in FA activities: in 1959, about 82 percent of farmers

said they had attended a SAU meeting in the past year. 74 Yang’s survey in the mid-

1960s provides further evidence of a rich associational life in the countryside,

with most farmers reporting that they voluntarily and regularly participated in

local elections and community organizations. 75 In contrast, farmers in Korea did

not elect leaders to the cooperatives and considered them to be just another arm

of the government. 76

Political Competition and Policy Change

Since farmers’ regular electoral participation and engagement with the FAs

prevented them from one-sidedly serving the state, it is worth considering

why Taiwan’s authoritarian regime allowed them to function the way they did.

Clearly the United States, through the JCRR, was interested in promoting Amer-

ican democratic ideals, but the KMT’s calculation was probably much more

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68 CHAPTER TWO

practical. They needed the Taiwanese to run the FAs because fluency in local

dialects was critical for extension work. More importantly, elections were a way

to create buy-in from farmers who might otherwise be tempted to form a rival

(communist) political party or movement. Given Taiwan’s close proximity to

the mainland and the strength of local factions, the Nationalists decided it was

better to permit open political competition than to drive it underground and

risk losing control.

This same logic propelled the regime to expand the scope of local govern-

ment elections. Party leaders gradually realized they would not be returning to

the mainland, especially after China’s 1964 atomic bomb test, so the only way

to fill vacancies created by an aging political elite was to bring more Taiwanese

into politics. They also knew that repression alone was not a long-term solution

to governance. Regular elections for local government positions started as early

as the 1950s and then expanded in 1969 to include a few seats in the parlia-

ment (most notably, the Legislative Yuan). This change marked the beginning

of what Thomas Gold has called the “Taiwanization” of the political sphere.

In 1972, Hsieh Tung-min became the first Taiwanese to assume the post of pro-

vincial governor. Chiang Ching-kuo later selected Hsieh to be his vice president

in 1978, followed by Lee Teng-hui in 1984. These developments at the top were

the culmination of aggressive party recruiting efforts at the grassroots: by the

early 1970s, about 80 percent of the KMT’s 1.25 million members were Taiwan-

ese. 77 And within the FAs, recruitment was so successful that they functioned

as voter turnout machines for the KMT during local elections. 78 This dynamic

of political competition at the height of authoritarianism, within the Farmers’

Associations and in the political system more broadly, makes Taiwan very dif-

ferent from the other cases. Even those politicians with no background in agri-

culture grew to care about the countryside because of Taiwan’s highly organized

rural electorate and the political influence of FA leaders.

Locally, political elites frequently moved between the FAs and the govern-

ment during the course of their careers. As a typical example, Mr. Fan-Chiang’s

experience, recorded by Taiwanese scholar Huang Ta-chou, reveals how elec-

tions helped to build strong horizontal and vertical ties among local institu-

tions: Born in 1926, Fan-Chiang attended school from the age of nine to fifteen.

He was drafted into the Japanese military and served until the war ended in

1945, after which he returned to his village. Fan-Chiang was a skilled farmer and

was selected by his peers to be a small agricultural unit leader in 1949. In the

mid-1950s, he was elected to be a township FA representative and a member of

the board of directors. He was then elected to the county government assembly,

shortly after which he worked for the county party organization. Moving every

few years between the government and the Farmers’ Association, Fan-Chiang

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 69

eventually became a township FA general manger in 1970. Reading his story

and the recollections of others like him underscores the prestige associated with

rural work in Taiwan, and it shows that the status of the FAs was similar to

that of the government. Faced with various career options, many people chose

to work for the associations. And given their political connections, they were

uniquely positioned to provide feedback on rural policy. They also knew which

leaders were more inclined to support farmers and could mobilize voters to

back them. 79

At the national level, the FAs transmitted farmers’ grievances upward to

central officials. Their voice was strengthened by the JCRR, which regularly

conducted surveys of farmers and shared its findings with the government.

Also important was a group of agricultural advocates in the Provincial Assem-

bly and the Legislative Yuan. From existing content analysis of the meetings of

these bodies, it is clear that official discourse about the countryside changed

after 1969: the previous focus on agricultural production for the sake of gov-

ernment revenue shifted to greater concern for farmers’ welfare. The advo-

cates spoke about the shortcomings of land reform and painted a picture of

worsening poverty. As one Legislative Yuan representative explained in 1970:

“Agricultural policy is a problem that we have not resolved for many years.

After the 37.5 percent rent reduction and the Land-to-the-Tiller programs

were implemented, it seemed on the surface that farmers received many ben-

efits. Yet in reality, once the farmers obtained land, their production costs never

went down. After subtracting production costs, they have almost nothing left.

Farmers’ lives have therefore still not really improved . . . [they] are experienc-

ing extreme suffering.” Indeed, several politicians made passionate appeals to

eliminate extractive policies, arguing that people could no longer subsist on

farming and were abandoning it only to end up as slave-like workers, criminals,

and prostitutes. 80

In summary, the Farmers’ Associations could not enact policy change on their

own, but they did enable farmers to meaningfully participate in different stages

of the policy process: implementation, feedback, and eventually agenda setting.

The constituencies and political leaders they produced became increasingly pow-

erful over time, as the regime moved toward including more Taiwanese voices in

politics. The barter system, which for decades had required farmers to purchase

fertilizers using in-kind payments of rice at exploitative, nonmarket prices, was

finally abolished with passage of the Accelerated Rural Development Program in

1972. To be sure, there were other factors that affected the government’s decision,

such as the declining cost of agricultural protection. In fact, just a few years before

the ARDP was adopted, the government had already started to lower the prices of

fertilizers, pesticides, and farm machinery. Growing revenues from the industrial

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70 CHAPTER TWO

sector, along with rising urban incomes and changes in diet, also decreased the

government’s need for cheap rice and other kinds of rural taxes. 81 Without the

emergence of a pro-rural coalition, however, it is unlikely that economic fac-

tors alone would have caused a substantial shift in policy. I have made the case

that the FAs deserve credit for gains in production during the extractive phase

of agricultural policy and for setting in motion changes that would effectively

end that phase. Moreover, what most previous accounts of rural policy transi-

tion have failed to explain is that the government did not just end extraction—it

transformed the face of the countryside.

The Community Development Campaign Origins

The Community Development Campaign was launched around the same time

as the ARDP. The latter represented a more typical agricultural adjustment pro-

gram, calling for reduced taxes, increased spending, low-interest credit, better

services, and scale agriculture. The government allocated at least 2 billion yuan to

the ARDP annually between 1973 and 1979. Though a small percentage of total

government spending (1–3 percent, depending on the year), it marked a decisive

break from the past. 82 As previously noted, because of the ARDP and supplemen-

tary measures like subsidies and import restrictions, the nominal and relative

rates of agricultural protection turned positive, and the rural-urban income gap

shrank considerably. By itself, however, the ARDP was regarded as an insufficient

solution to the rural problem. To achieve more immediate and visible results, the

government embraced mass mobilization.

The Community Development Campaign cannot be understood without

reference to past campaigns. In China, the Mass Education and Rural Recon-

struction Movements of the 1920s–1930s focused on improving rural condi-

tions through the development of autonomous village organizations. Led by

Y. C. James Yen, Liang Shuming, and other activist intellectuals, these move-

ments sought to provide an alternative to communism. Yen later served as a

commissioner for the JCRR and moved to Taiwan, where his ideas about grass-

roots community building influenced the top leadership. 83 The New Life Move-

ment was another campaign that took place in the 1930s–1940s to counter the

influence of communism. Some scholars view it as linked to global fascism,

whereas others emphasize that it was closely intertwined with state building and

civilian relief during the war period. Importantly, because Chiang Kai-shek and

Chiang Ching-kuo personally led the campaign, it provides a window into how

they thought about the countryside. The main objective was to create an orderly

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 71

and civilized society by using ideological education to reform the most basic

aspects of rural life: clothing, food, housing, and behavior. Although thousands

of New Life community organizations were established across the country, the

campaign’s momentum ultimately fizzled out because the communists proved

more capable of providing people with real economic and security benefits. 84

Taiwan’s countryside was similarly viewed as backward, but now the leadership

understood that any campaign to reform it needed to deliver tangible change to

be successful.

In 1955, the government launched the People’s Livelihood Construction Cam-

paign, which drew inspiration from Sun Yat-sen’s ideology. It stressed ensuring

equal access to land resources, sustaining high levels of production, and satisfying

villagers’ basic needs (as in the New Life Movement, these were defined as cloth-

ing, food, housing, transportation, education, and recreation). Taiwanese sources

state that the campaign was intended to pick up where land reform had left off,

and given the timing, it is possible the campaign was launched in response to

China’s collectivization drive. Even though farmers in Taiwan maintained con-

trol over their own land and production practices, laws on compulsory labor were

invoked to support village improvement projects. An earlier law requiring men

ages eighteen to fifty to take part in road building, irrigation, production, and

defense work was revised to incorporate more projects related to village infra-

structure. Campaign coordination committees were formed to bring together

leaders from government, schools, the police, and the FAs. In addition, the gov-

ernment initiated a formal competition among local jurisdictions to mobilize

labor and other resources. The policy lasted for ten years and affected less than

10 percent of all villages (there were 515 experimental sites in total), but its

impact was nonetheless significant. Several hundred miles of roads, irrigation

canals, and drainage pipes were added to existing infrastructure. Other improve-

ments included the construction of embankments, water towers, pumps, bridges,

rice drying areas, toilets, bathhouses, animal pens, compost houses, child-care

centers, and community centers. 85

The success of previous experiments, combined with international develop-

ment trends, eventually paved the way for a more comprehensive campaign. In

the 1960s, when the United Nations was supporting community development

programs worldwide, UN consultant Chang Hung-chun introduced the concept

to Taiwan. It quickly gained currency among officials who were eager to raise

their government’s status internationally, an issue that became even more press-

ing after Taiwan lost its UN seat to China in 1971. Local experiments were scaled

up and repackaged as community development in a series of national policy

documents that would serve as the foundation for the Community Develop-

ment Campaign—the People’s Livelihood Social Policy (1965), the Community

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72 CHAPTER TWO

Development Eight-Year Plan (1969), and the Community Development Ten-

Year Plan (1972). 86 The Chinese names of these policies are listed in table 7.

Taiwan also took notice of South Korea’s New Village Movement and modeled

certain aspects of its approach after what was happening there, such as training

village activists in order to change rural culture. 87

Taiwan’s bureaucracy, compared to that in Korea and China, was more inclined

to support rural development, and groups representing urban-industrial inter-

ests were not as strong politically. This difference had to do with historically close

ties between agriculture and industry and the fact that many local officials had

started their careers in the FAs. The dismantling of urban-biased policies was

consequently easier to execute. The bigger barrier to change, from the perspec-

tive of the leadership, was rural culture itself. They believed that land reform had

created a society that was simultaneously more egalitarian and more individual-

istic. And if rural backwardness stemmed from a lack of community spirit, then

a campaign would be more effective than a normal piece of legislation (like the

ARDP) at delivering spiritual and moral change. Mass mobilization would not

only advance the material well-being of the village, but it would foster a public

ethos as well.

On a deeper level, it is clear that the KMT’s favorable view of campaigns

was driven by competition with the Chinese communists and political insecu-

rity. Chiang Kai-shek had been fearful of an underground communist move-

ment since arriving in Taiwan and viewed the countryside through the lens of

his failures on the mainland. As virtually any rural policy document from that

period shows, the regime was fixated on the question of how it lost the Chinese

peasantry. Taiwan represented a second chance. The KMT studied the CCP and

sometimes borrowed directly from the communists’ tool kit, mimicking their

organization and style of policy implementation. 88 It successfully executed land

reform and penetrated the FAs. And yet it was never fully confident it could hold

on to their loyalty. By the late 1960s, farmers had become a powerful interest

group. They did not directly challenge Chiang’s authority, but reports of rural

decline and popular discontent deeply concerned him. Having experienced

some success with campaigns in the past, Chiang’s government had reason to believe that this approach could deliver greater change than market forces alone

could produce. The campaign furthermore promised to transform rural cul-

ture and reassert state control over the countryside at a time when elections

were expanding. It was also an important moment for Chiang Ching-kuo, who

wanted to create a popular base of support as he prepared to take over from his

father. 89

In summary, campaigns were seen as a means of development and legitima-

tion. They could overcome barriers to change, accomplish concrete goals, and

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 73

engender loyalty among the population. The framework of community develop-

ment in particular was also a way of signaling to international actors that Taiwan

was progressive and open compared to China and that its leaders cared about

helping those left behind by industrialization. As one might expect, scholars criti-

cal of the campaign lament the state’s heavy involvement as running counter to

international norms about community development. 90 However, I would suggest

that if it is viewed as a state-led campaign, and not according to the ideals of com-

munity development per se, it was actually quite successful.

Goals and Implementation

The Community Development Campaign succeeded at producing policy com-

pliance and positive outcomes because its overarching goal was rural develop-

ment, rather than extraction, and because of the political-institutional context in

which it was implemented. Taiwan’s centralized political system and technocratic

leadership facilitated bureaucratic monitoring, and although the FAs were just

one of several groups responsible for campaign implementation, their strong

presence in the villages prior to the campaign helped to normalize rural partici-

pation in the policy process.

In terms of goals, the Community Development Eight-Year Plan (1969–1976)

described the policy as a “social movement” aimed at “eliminating dirt, disorder,

and poverty, increasing production and welfare, and promoting a new moral-

ity.” Accordingly, in this document and the revised ten-year plan (1969–1978),

specific projects were divided into three categories: basic infrastructure; pro-

duction and social welfare; and spiritual and moral construction. This last cat-

egory called for community organizations and activities that would promote

healthy living and a collective consciousness, for example the formation of Boy

Scout troops and Chinese musical orchestras. “Life basics” courses on civilized

TABLE 7. Community Development Policies in Taiwan, 1955–19811

CAMPAIGNS AND SUPPORTING POLICIES CHINESE NAME YEARS

People’s Livelihood Construction Campaign 1955–1965

Compulsory labor 1947

Community Development Campaign 1965–1981

People’s Livelihood Social Policy 1965

Community Development Eight-Year Plan 1969

Community Development Ten-Year Plan 1972

1 The ten-year-plan, which was supposed to conclude in 1978, was extended through the year 1981. Single years indicate the first year that a policy became effective.

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74 CHAPTER TWO

behavior—standing in line, wearing clean clothes, eating at a table, etc.—were

also commonly conducted during the campaign. 91 By most accounts, these proj-

ects were less successful than those focused on infrastructure and production,

but the emotional appeal of making the community better was still a powerful

call to action.

The elimination of taxes and disbursement of grants further bolstered popu-

lar enthusiasm for the campaign, though not without local costs. Initially, the

government allocated 250,000 yuan to each community. This money covered

roughly half the cost of community development, and residents were expected

to provide matching funds to make up the difference. The poorest households

had to borrow money or donate more of their labor to meet this requirement. To

reduce their burden, the government later revised the policy. It assumed a greater

share of the cost for every site (about 52 percent of the total), with even higher

levels of support for poverty areas (about 84 percent). The ten-year plan also

mandated that poorer villages be developed first so as to prevent local govern-

ments from channeling funds to the easiest cases, namely those villages near the

township with a better baseline of development. 92

To facilitate local compliance, campaign coordination committees were

formed at the provincial, county, and township levels. The committees were

composed of leading officials from nearly every institution, including the

military and the police. They were charged with developing plans, disbursing

funds (primarily through the FAs), and overseeing implementation. During

the planning stage, village assemblies were held to solicit ideas from residents.

Villages were legally defined as an extension of the township government and

considered to be separate from communities, which were conceptualized as

autonomous, service-oriented units. But in practice, the functions of these

units overlapped.

The creation of communities gave rise to two changes in the local leader-

ship structure. First, some villages were merged together so that each community

was roughly the same size, about 350 households. When mergers did occur—the

eight-year plan organized all of Taiwan’s 6,215 villages into 4,893 communities—

leaders from different villages had to negotiate the location of community proj-

ects, a process that was undoubtedly contentious and subject to the influence of

local factions. In these cases, the campaign coordination committee was expected

to play the role of mediator. Second, a younger generation of activists gained

power through the establishment of community development councils. These

were elected bodies of roughly ten people representing a mix of traditional and

new elites. The empowerment of individuals in their twenties, thirties, and for-

ties, who otherwise might have considered leaving the countryside, added to the

campaign’s momentum.

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 75

The community development councils operated at the village (or commu-

nity) level. They were responsible for mobilizing residents and managing the

day-to-day activities of the campaign. They were also in charge of community

center operations and infrastructure maintenance. The village SAU leader and

township FA representatives usually held spots on the council and took the lead

on production-related projects. The township coordination committee fre-

quently dispatched officials to consult with council members and to check on

the campaign’s progress. In addition, the provincial government arranged for

outside inspection teams to evaluate and rank local governments based on the

quality of the communities in their jurisdiction. Places that performed better

were rewarded with media attention, medals, and other benefits. Taiwan’s small

size and centralized political system contributed to policy coherence among dif-

ferent levels of government. In conjunction with education and training, as well

as fiscal and administrative regulations, all these mechanisms—the campaign

coordination committees, community development councils, and competitive

evaluations—were used to exert central control over local authorities and increase

compliance. Stated differently, these policy tools effectively brought local actors

into an implementing coalition with the central government.

On the issues of rural participation and accountability to villagers, scholarly

assessments are mixed. Several ethnographic case studies assert that the commu-

nity development councils were weak. They point out that projects were mostly

passed down from the township and that the campaign relied on compulsory

labor. 93 Still other studies reach the opposite conclusion, showing that the coun-

cils crafted and adjusted development plans based on local needs and feedback.

They also claim that people were eager to contribute to projects that directly

benefited the village, which was not necessarily true of other compulsory labor

projects. 94 This discrepancy in the literature likely stems from real variation in

local campaign experiences.

Nevertheless, there are good reasons to believe that, on the whole, the cam-

paign was implemented in a relatively flexible and participatory manner. First,

the example of the FAs demonstrates that villagers regularly voted in elections

and treated them seriously. Council elections were probably treated the same

way, especially given the influx of new resources tied to community development.

There was an expectation that council members would advocate for villagers to

higher levels of the state, which was reinforced by villagers’ own ability to com-

municate with the FAs and outside inspection teams. Second, despite govern-

ment claims to the contrary, the countryside already had a rich associational

life. Besides the FAs, there were irrigation associations, credit cooperatives, labor

exchange groups, temple associations, and a myriad of groups organized around

lineage, neighborhood, gender, age, and profession. 95 These organizations surely

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76 CHAPTER TWO

had their own views on how to improve the community and wanted to see those

reflected in the campaign. So, even if the community development councils were

weak, there were still other groups that sought out partnerships with the govern-

ment and offered their contacts and resources in exchange for influence. Third,

in contrast to the other cases in this study, Taiwanese sources are filled with ref-

erences to Western examples of community development and translations of

phrases that evoke democratic norms of participation: civic organization, com-

munity action, inclusion of the poor in decision making, sense of belonging, and

felt needs, to name just a few. 96 Since the intended audience of these materials

was local officials and campaign activists, it seems the regime’s embrace of these

norms was not just about international posturing. It was also about a real com-

mitment to grassroots engagement.

Outcomes and Legacy

Whereas Taiwanese sources suggest that the campaign was transformative, it has

received almost no attention from Western scholars. 97 This is probably because

the campaign had only a moderate effect on the agricultural economy. While, on

the one hand, production-related infrastructure was successfully upgraded and

expanded, on the other hand, efforts to develop new rural sidelines and scale

up production fell flat. In fact, between 1960 and 1990, the share of households

with farms smaller than 1 hectare (2.47 acres) increased from about 67 percent

to 75 percent, and the share of households with farms larger than 3 hectares

(7.41 acres) decreased from 3.3 to 2.5 percent. 98 The difficulty of scaling up agri-

culture in Taiwan, as in the rest of East Asia, was a product not only of land

reform but also the FAs, which served to protect and entrench the position of

small farmers in Taiwanese society. 99

The Community Development Campaign’s greatest impact was to change the

village environment. It led to dramatic improvements in public infrastructure,

sanitation, and housing. Most if not all of Taiwan’s villages were affected, and the

sheer scope of the campaign in terms of the number of projects implemented

was impressive (see table 8). Official statistics also reveal an unevenness to proj-

ect implementation, meaning that different communities experienced different

kinds of change. Apart from variation in resources, which certainly existed across

communities, another explanation for this unevenness is that the campaign did

not impose a one-size-fits-all vision of modernity on the countryside. Villag-

ers had some degree of choice over which projects to implement, and there

were fewer negative outcomes as a result. For instance, older homes were pre-

served and renovated instead of torn down and rebuilt, so there was very little

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TABLE 8. Results of the Community Development Campaign in Taiwan, 1969–1981

Total number of communities 4,025

Total number of community residents 7,328,074 (about 1.3 million households)

Total cost of community development 6,082,449,911 yuan

Government expenditures 3,687,463,819 yuan (about 61%)

Community expenditures 2,394,986,092 yuan (about 39%)

Basic infrastructure projects

1. Water towers 9,274

2. Toilets 172,307

3. Showers 37,107

4. Drainage pipes 10,395,456 meters

5. Pathways 21,055,140 square meters

6. Parks 1,520

7. Playgrounds 913

8. Athletic fields 1,016

9. Activity centers 3,531

10. Home sanitation improvement 335,307 households

11. Township roads 71,023 kilometers

12. Village roads 57,132 kilometers

Production and social welfare projects

1. Rice drying areas 2,101,259 square meters

2. Animal pens 55,831

3. Compost houses 39,478

4. Technology training classes 3,898

5. Farm improvement stations 1,577

6. Child care centers 1,725

7. Agricultural cooperatives 122

8. Home renovation for the poor 20,262 households

9. Home construction for the poor 25,481 households

10. Employment assistance 33,405 people

11. Community production funds 1,063

12. Cooperative farms 49

Spiritual and moral construction projects

1. “Life basics” courses 12,706

2. Cultural and athletic activities 20,383

3. Recognizing good people/deeds 4,343

4. Elderly associations 1,909

5. Boy scout troops 389

6. Classes for mothers 2,945

7. Sports tournaments 494

Source: Taiwan Provincial Government Social Affairs Department, cited in Liu J. 1991, 69–72.

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78 CHAPTER TWO

displacement, and the government rather than villagers shouldered the majority

of campaign expenses. 100

After the more concrete, infrastructure-related goals were achieved, the cam-

paign began to lose steam and eventually petered out. By the late 1970s, the state

had retreated from playing an activist role in community affairs, and rural policy

had returned to normal. The agricultural bureaucracy resumed its regular work,

as did the leaders of other departments and institutions who had been mobilized

during the campaign. Although the state intended for the community develop-

ment councils to exist indefinitely, its withdrawal had the effect of demobilizing

them. These organizations, while composed of nonstate actors, had been created

and managed by the state. Their mission was to promote development, not to

advance a broader political agenda, and they rarely if ever acted independently.

Taiwan had a strong state, and the leadership knew that so long as rural con-

ditions were improving, there was little chance the community development

councils or any other organizations would present a challenge. The campaign

had served the purpose of stabilizing the countryside, and once Chiang Ching-

kuo had consolidated power, the state’s strategy shifted from mobilization to less

interventionist policy measures like subsidies.

Following Taiwan’s transition to democracy, President Lee Teng-hui

(1988–2000) resurrected the idea of community development. The new program

was different from the old in that it targeted urban areas and did not take the

form of a campaign. Still, one point of continuity was that the state supported

the creation of community development associations as an alternative to what

Lee saw as an overly bureaucratic approach to neighborhood governance. State-

sponsored activism or what Benjamin Read has called administrative grassroots

engagement—a process whereby the state creates, sponsors, and manages organi-

zations at the most local level—thus continued under democracy and represents

a long-standing feature of governance in Taiwan. 101

In conclusion, the use of campaigns to spur development stands out as being

quite different from the conventional wisdom. The developmental state model

as described by Wade and others is correct in its portrayal of Taiwan’s institu-

tions, but it does not fully account for what happened in the countryside. The

state did not “pick winners” and let the market do the rest. Instead, it launched

a modernization campaign to speed up the pace of rural transformation, a deci-

sion that had more in common with Maoism or Leninism than Japanese indus-

trial policy. At the same time, this portrait of the campaign as a top-down policy

with genuine societal participation makes the Taiwanese case diverge from a

purely Leninist system.

The Community Development Campaign succeeded at improving rural con-

ditions because it occurred in a particular context that prevented the campaign

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RURAL DEVELOPMENT IN TAIWAN, 1950s–1970s 79

from working against farmers’ interests. It was meticulously planned and imple-

mented by a technocratic bureaucracy operating in a highly centralized politi-

cal system. Frequent inspections and crosscutting coordination agencies stopped

government support from being diverted to other purposes. More importantly,

Taiwan’s strong rural organizations provided a critical check against campaign

excesses. The community development councils and the FAs, with their exten-

sive organizational reach and politically influential leadership, were crucial for

shaping local plans and generating mass participation. Without them, the use of

compulsory labor alone would have most likely failed to sustain the campaign.

While this case study has highlighted the interplay between institutions and

campaigns, perhaps the bigger lesson is that the Farmers’ Associations, in their

own right, were incredibly effective agents of development. The FAs exhibited an

unusual combination of linkage with the state and autonomy from it, with small

farmers occupying most of the leadership positions. Because of these qualities,

the FAs were able to achieve extensive, long-term gains in agriculture, and they

ushered in pro-rural reforms that fundamentally changed the state’s relationship

with the countryside and led to gains in other areas besides production. The

FAs today remain encompassing organizations (current membership is about

1.8 million), and they are still the key actors for implementing rural policy. Their

power has been reduced, however, by the continued decline of agriculture and,

arguably, by the democratization process itself, which led to the empowerment

of new social classes and new political parties (because of their close histori-

cal ties, the FAs remain largely supportive of the KMT). 102 A few studies have

also shown increased levels of corruption as the agricultural sector became more

heavily subsidized by the state. 103 Despite these changes, it is no exaggeration to

say that Taiwan’s Farmers’ Associations were the principal contributor to rural

development from the 1950s onward. This research thus confirms the view that

Taiwan represents a “farmers’ association approach” to development. 104 Through

the comparative analysis in the chapters that follow, it becomes even more obvi-

ous just how much these institutions mattered.

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