Political Science and International Affairs
Development literature often depicts development as a transitional process in which agriculture is marginalized while resources are transferred to growing nonfarm sectors, through either voluntary exchange or involuntary coercion. The conventional analysis of Taiwan's agriculture and its role in economic development generally attests to this model.-1 Prior to the 1970s, as the backbone of Taiwan's economy and the major earner of foreign currencies, agriculture accounted for more than 40% of the total employment and over 20% of the net domestic product (NDP). But a series of programs unfavorable to farmers were put in place so that the government could channel resources into industrial development. For instance, rice farmers were asked to pay for fertilizer with rice at exchange ratios consistently unfavorable to them, and the government's mandatory purchase scheme bought rice from farmers at 20% to 30% below prevailing market prices. Through these mechanisms, productivity gains achieved after Taiwan's land reforms (1949- 53) were taken by the government, which subsequently redirected them into the emerging industrial sector as investment capital. In addition, the abundant supply of food and labor from rural areas also provided an environment conducive to low-wage, labor-intensive industrialization
Digital Object Identifier (DOI)
Li, Chien-Pin, "Domestic Bargaining in Taiwan's International Agricultural Negotiations" (1998). Faculty Publications. 37.