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An Analysis of Agricultural Output Increase on Taiwan, 1953–1964
Published online by Cambridge University Press: 23 March 2011
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In recent years, Taiwan's rapid economic growth and agricultural improvement have drawn increasing public and academic attention in the Western world. Taiwan is often referred to as a country demonstrating that economic progress can be achieved if domestic resources are effectively mobilized and outside assistance is efficiently utilized1 Several recent studies attempt to analyze one or more aspects of Taiwan's past, present and future development. The objective of the present paper is to examine one aspect of the agricultural sector, namely, the increase of agricultural output during the period 1953–1964. Emphases are given to its record and contributing factors.
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- Copyright © The Association for Asian Studies, Inc. 1967
References
1 For example, see: Myer's, William Forward in T. H. Shen's book, Agricultural Development in Taiwan Since World War II, (Cornell University Press, September 1964)Google Scholar; Jacoby, Neil H., An Evaluation of U.S. Economic Aid to Free China, 1951–1965, Agency for International Development (January 1966)Google Scholar.
2 United Nations, “Relationship Between Agricultural and Industrial Development: A Case Study in Taiwan, China, 1953–1960,” Economic Bulletin for Asia and the Far East, Vol. XIV, No. 1 (June 1963)Google Scholar; Kao, Charles, “The Role of the Agricultural Sector in Taiwan's Economic Development,” Unpublished Ph.D. dissertation, Michigan State University (September 1964)Google Scholar; and the following unpublished Ph.D. dissertations: Ho, Samuel P. S., “Development Alternatives—The Case of Taiwan,” Yale University (1965)Google Scholar; Ho, Yhi-Min, “The Agricultural Development of Taiwan 1903–1960: Its Pattern and Sources of Productivity Increase,” Vanderbilt University (1965)Google Scholar; Lin, Su Feng, “Disguised Unemployment in Taiwan Agriculture,” University of Illinois (March 1966)Google Scholar. Johnston, Bruce F., “Agricultural Development and Economic Transformation: A Comparative Study of the Japanese Experience,” Food Research Institute Studies, Vol. 3 (November 1964), 223–76Google Scholar; and Myers, Ramon H. and Ching, Adrienne, “Agricultural Development in Taiwan Under Japanese Colonial Rule,” The Journal of Asian Studies (August 1964), pp. 550–70Google Scholar. Readers who want to gain some general knowledge about Taiwan are recommended the following book with special attention to part IV: Hsieh, Chiao-Min, Taiwan-ilha Formosa, A Geography in Perspective, Butterworths (1964)Google Scholar.
3 In a recent issue of Economic Bulletin of Asia and the Far East (June 1966), this UN publication discussed the development of statistics in this region (pp. 52–66). It states “of the countries in this (ECAFE) region, Australia, Japan, and New Zealand seem to have satisfactory statistical systems. Many countries, however, have made progress in developing their statistical systems during the last decade or so, while others are apparently having teething troubles. The statistical services in a few countries appear to be still undeveloped and the statistical series still fragmentary from the standpoint of planning for economic and social development” (p. 66). It is not clear how the Taiwan statistical system is rated here. I suppose it will be one of those countries which have made some progress in this area. Glass thinks, “Formosa's statistics, while not reaching the standards of the more developed countries, are considered to be quite good. The most serious deficiencies are in employment and labor statistics.” See his paper,“Some Aspects of Formosa's Economic Growth,” in Formosa Today, edited by Mancall, Mark, (Praeger 1964), p. 70Google Scholar.
4 This was calculated by and reported in the annual Taiwan Agricultural Yearbook., Department of Agriculture and Forestry, Taiwan Provincial Government.
5 Calculated by and reported in the Taiwan Statistical Data Book, and the Industry of Free China, respectively. Both are official publications of the Council for International Economic Cooperation and Development, Executive Yuan, Taipei, Taiwan.
6 The year 1956 was also chosen as the base period in the Taiwan Statistical Data Book- In some cases, the average figures of 1950–52 and the Japanese peak years (1938 for rice, 1937 for sweet potatoes, 1938–39 for sugarcane, etc.) are selected as the base periods.
7 Common, special and horticultural crops mainly include sweet potatoes, barley, wheat, corn, soybean; sugarcane, tea, tobacco, coffee, jute, peanut; banana, pineapple, citrus fruits; respectively. Vegetables include potatoes, radish, celery, onions, etc.
8 Industry of Free China, op. cit., Vol. XXV, No. 3 (March 1966), 62–63.
9 U.S. Department of Agriculture, Changes in Agriculture in the Developing Nations 1948–1963, Foreign Agricultural Economic Report No. 27 (November 1965), Chapter 2.
10 Ibid., p. 22.
11 See my article, “The Factor Contribution of Agriculture to Economic Development: A Study of Taiwan,” Asian Survey, Vol. V, No.11 (November 1965), 558–65Google Scholar.
12 The latest data (1966) show that rice exports in 1965 jumped to 9 percent of total export value.
13 This is derived from the following formula: D = p + ng Where D = annual increase in demand for food; p = population growth rate (3.1 percent in 1964); n = coefficient of income elasticity of demand for food, 0.63, which means that for each I percent increase in income, the family on the average will increase its expenditure for food by 0.63 percent. (The income elasticity coefficient was cited from Agricultural Commodities, Projections for 1970, FAO, Rome, Italy (1963). Shen used 0.50 in his calculation, see his book, op. cit. (p. 282), g = annual increase in income per capita (3.9 percent, average of 1953–64). Thus D = 3.1% + (0.63 × 3.9%) = 5.5%.
14 United Nations, Economic Survey of Asia and the Far East, 1963.
15 Taiwan Statistical Data Book. 1966, op. cit., pp. 125 and 127.
16 Based on the latest information, this situation was at least temporarily improved in 1965. The “net” earning of rice export was 7 million U.S. dollars. Ibid., pp. 125 and 127.
17 See footnote 7. Kao, “Factor Contribution.”
18 Taiwan Statistical Data Book 1965. op. cit., P. 117.
19 Kuznets, Simon, “Economic Growth and the Contribution of Agriculture: Notes on Measurement,” reprinted in Carl Eicher and Lawrence Witt, Agriculture in Economic Development, (McGraw-Hill, 1964), P. 105Google Scholar.
20 His formula is simple, but long. See Eicher and Witt (eds.), Agriculture in Economic Development, op. cit., p. 107, equation 4. Due to the limitation of space, the detailed calculations are not shown here:
21 Shen, op. cit., p. 281.
22 United Nations, Economic Survey of Asia and the Far East, 1964, (New York, 1965), p. 58Google Scholar.
23 For instance, see Neil Jacoby, op. cit., p. 85; Shen, op. cit., pp. xxv–xxvi; Kao, The Role of the Agricultural Sector in Taiwan's Economic Development, op. cit., Chapter 4; United Nations, “Relationship Between Agricultural and Industrial Development: A Case Study in Taiwan, China, 1953–1960,” op. cit., p. 48; and Wright, K. T., Taiwan's Postwar Agricultural Development, Agricultural Economics Report Number 19, Department of Agricultural Economics, (Michigan State University, October 1965), p. 27Google Scholar. There are many other economists who consider a number of factors essential for a successful agricultural development. For instance, in his recent book, Mosher lists the following five: market for farm products, constantly changing technology, local availability of supplies and equipment, production incentives for farmers and transportation. “Each of these is essential. Without any one of them there can be no agricultural development.” See Mosher, A. T., Getting Agriculture Moving, (Praeger, 1966), Part IIGoogle Scholar.
24 Economic Bulletin for Asia and the Far East, op. cit. (September 1964), p. 9.
25 Economic Bulletin for Asia and the Far East, op. cit. (June 1963), p. 60.
26 Based on my calculation, the regression equation shows:
Y = 1310.519 + 1.679 ×
(27.028)* (17.643)*
*Numbers in parentheses are t-values
R2 = .951
t.99 = 2.947
Where Y: average production of brown rice per hectare (Kg.)
X: average amount of fertilizer allocated per hectare (Kg.)
27 For the period of 1900–39 and 1950–60, the relationship between the multiple crop index and the real value of crop production (gross value deflated by the general price index, 1950–52 = 100) averaged about NT $100 million increase in crop value for each one point increase in the multiple crop index. “Tracing this cause and effect relationship back to irrigation, we might conclude that a one per cent increase in irrigated acreage would result in an increase of NT $116 million in the real value of crop production.” See E. L. Rada and T. H. Lee, Irrigation Investment in Taiwan, Economic Digest Series, No. 15, JCRR, (Taipei, February 1963), p. 29.
28 The equation is:
Y = 85.1278 + .4128 F + 1.4387 I
(-2.8896)* (14.2015)* (4.7474)*
* Numbers in parentheses are t-values
R2 = .967 = the per cent of total variance in rice production explained by the equation
t-99 = 3–355
Where Y: Rice production per crop hectare (Kg.); F: Fertilizer applied to rice (Kg.); I: Expanded irrigation hectare; Partial correlation coefficient of F = .9807; Partial correlation coefficient of I = .8591.
29 Ho, op. cit., p. 188.
30 China Yearbook 1962–1963, China Publishing Co., (Taipei, 1964), p. 375Google Scholar.
31 See Monthly Bulletin of Agricultural Economics and Statistics, FAO/UN (Dec.' 1965) and (Jan. 1966).
32 For a more detailed discussion, see H. S. Tang and S. C. Hsieh, Land Reform in Free China, Joint Commission on Rural Reconstruction (October 1954); Tang, H. S. and Hsieh, S. C., “Land Reform and Agricultural Development in Taiwan,” in Walter Frochlich's book, Land, Tenure, Industrialization and Social Stability, (The Marquettc University Press 1961)Google Scholar. There has been some speculation as to the government's political motivations of carrying out land reform. Jacoby states, “land reform was expeditiously carried out, partly because those in charge of policy did not have vested interests in the land. Land reform disarmed political unrest and provided economic incentives to farmers.” Op. cit., p. 51.
33 See my Ph.D. dissertation, op. cit., pp. 84–92.
34 Anthony Y. C. Koo, “Land Reform and Agricultural Productivity: A Case Study of Taiwan,” mimeograph (1966), p. 44.
35 Koo, Anthony Y. C., “Economic Consequences of Land Reform in Taiwan,” Asian Survey, Vol. VI, No. 3 (March 1966), 150–57CrossRefGoogle Scholar.
36 Gallin, Bernard, “Rural Development in Taiwan: The Role of the Government,” Rural Sociology, Vol. 29 (1964), 313–23Google Scholar.
37 China Yearbook 1962–1963, op. cit., p. 375.
38 Shen, Agricultural Development in Taiwan Since W.W. II, p. 40. For an interesting discussion of rural Taiwan, see Kirby, E. Stuart, Rural Progress in Taiwan, JCRR, (Taipei, Taiwan, December 1960)Google Scholar.
39 Shen, T. H., “JCRR—Today and Tomorrow,” Industry of Free China, Vol. XXII, No. 6 (December 1964), 20Google Scholar.
40 Parker, F. W., “Priorities in Development and Investment,” in Economic Development of Agriculture, (Iowa State University Press, 1965), p. 179Google Scholar.
41 See Montgomery, J. T., Hughes, R. B., and Davis, R. H., Rural Improvement and Political Development: The JCRR Model, Washington: Agency for International Development, Mimeo. (June 1964)Google Scholar.
42 Rada and Lee, op. cit., Table 10.
43 See footnote 11, Kao, “Factor Contribution …,” p. 560.
44 Glass thought the terms of exchange between fertilizer and rice “directly affect the farmers' application of fertilizer.” Unfortunately, he did not present any evidence to support his assertion. See his paper, “Some Aspects of Formosa's Economic Growth,” op. cit., p. 77.
45 Economic Survey of Asia and the Far East 1966, op. cit., pp. 58–59.
46 Glass, op. cit., pp. 68–90. Paauw would probably disagree on the point of direct and indirect government control. Paauw states that “there is a clear predisposition to lean basically upon private enterprise to provide the vehicle for economic growth and development.” See Douglas S. Paauw, Development in Asia, National Planning Association (May 1965), p. 10.
47 Walker, Richard L., “Taiwan's Development As Free China,” The Annals of the American Academy of Political and Social Science, Vol. 321 (January 1959), 122CrossRefGoogle Scholar.
48 Agency for International Development, Proposed Economic Assistance Programs FY 1967, U. S. Government Printing Office (1966), p. 50.
49 Barnett, A. Doak, Communist China and Asia, (Harper, 1960), p. 399Google Scholar.
50 See, for example, Thompson, Warren, Population and Progress in the Far East, (University of Chicago Press, 1959), p. 367Google Scholar.
51 Neil H. Jacoby, op. cit., p. 63.
52 For a detailed analysis, see Kao, Yu-Hsin, “Effects on Public Law 480 Surpluses on Economic Development with Special Reference to Taiwan,” M. A. thesis, University of Alberta, Canada (December 1963)Google Scholar; also Chang, David W., “U.S. Aid and Economic Progress in Taiwan,” Asian Survey, Vol. 5, No. 3 (March 1965), 152–60CrossRefGoogle Scholar.
53 Yu-Hsin Kao, op. cit.
54 For a review of literature on this subject, see my paper: “Agricultural vs. Industrial Development in Developing Nations: A Survey,” Industry of Free China, Taipei (July 1965), pp. 41–48Google Scholar.