Throughout Asia, the relationship between the state and the rural sector has shifted from taxation to subsidy. The political tussles over subsistence between resistant peasants and taxing states, eloquently described by James Scott, have been replaced by a more affluent political dynamic focussed on subsidy and productivity. This article explores this transformation by means of a comparative study of Thailand and South Korea. Like many other countries, Thailand and South Korea have followed the path from taxation to subsidy but Thailand has never successfully addressed its legacy of low agricultural productivity. Contemporary South Korean agriculture, by contrast, is a result of a century-long investment in productivity improvement, in both its taxation and subsidy phases. The interaction between government policy and agricultural productivity has important political implications. Whereas South Korea has made a successful democratic transition and achieved a broad consensus on support for the agricultural sector, Thailand has failed to effectively manage the contemporary dilemmas of exchange between rural people and the state.