Changes in Farmland Policy in Taiwan

Dr. Torng-Chuang Wu, Director, FFTC, 2000-03-01

In every country, the question of who owns farmland and how it can be used is of major importance. In the first half of this century, many farmers in Taiwan were tenants. They paid high rents, and could be evicted at any time. Taiwan's land reform program of the 1950s created thousands of small-scale independent farmers. Land could still be rented, but tenants were strongly protected and rents were low. The new legislation also strongly protected farmland from being used for any purpose other than agriculture. These reforms enabled Taiwan to develop a modern, productive agriculture and eliminate rural poverty. However, there have been many complaints in recent years. The strongest complaints have come from farmers themselves. They find it is very difficult to sell or rent land, and so are unable to increase the size of their land holdings. They also feel that they are not getting enough economic benefit from the true value of their land.

Recent Changes in the Law

In January this year, the Statute for Agricultural Development was revised, with the aim of adjusting the structure of agriculture and promoting the welfare of farmers in Taiwan. Transfer of land ownership is now much easier. In the past, only farmers were allowed to purchase farmland. Now, anyone can buy it. This will include not only individuals, but also groups such as farmers' cooperatives and agribusiness enterprises.

It is hoped that this will draw more investment into advanced agricultural technology and modern production methods. As a result of the changes, farms will probably become larger and fewer. Taiwan's agriculture should be better able to compete with the large-scale capital-intensive agriculture overseas.

Farmland contracts signed before the changes will remain valid. They must still follow the old regulations covering maximum rents and tenants' rights. Future rental agreements, however, will be much freer. Landowners and tenants can decide for themselves the terms of the lease, including the rental rate, the rental period, and under what conditions the owner can take back his land.

Subdividing Land Holdings

The rules over subdividing land are also to be relaxed. In the past, a land holding could not be subdivided. The only exception was if every land holding after division was no smaller than five hectares. Since Taiwan's farms are very small, in practice this regulation was seldom applied. Under the old Statute, joint land ownership was not permitted, except when land was inherited jointly by several heirs. Under the revised statute, joint ownership of land is legally permitted. Plots of land can be subdivided. The new minimum size for a land holding after subdivision is a quarter of a hectare.

Converting to Non-Farm Uses

Under the new regulations, converting farmland to non-farm uses such as housing, industry, roads and recreation will be much easier. There will still be a detailed examination of any application to convert the use of farmland, but the process of transferring land use will be speeded up. However, the new regulations are also intended to protect farmland from abuse. All farmland used for agriculture is now exempted from paying land tax. Furthermore, illegal use of farmland will be even more severely punished than it was in the past.

Land Reform

Index of Images

• 

  Figure 1 At Present, Most Land Holdings in Taiwan Are Less Than One Hectare (2.4 Acres). Larger Farms and More Investment Will Make Possible Economies of Scale in Production.

• 

  Figure 2 Power Tiller Used to Prepare Land for Rice. Only Very Small Machines Are Economic on Small Land Holdings.

• 

  Figure 3 Larger Fields Means Larger Machines Can Be Used- Tractor Used to Prepare Land for Rice