Changing Economies of Asia: Role of Agriculture in Taiwan

The report provides an overview of the subsidiary role of agriculture in development policy with reference to Taiwan. It analyzes the key aspects of the agricultural sector, its role in contributing to economic and social aspects, problems faced, and measures used to enhance productivity.

Running head: CHANGING ECONOMIES OF ASIA
CHANGING ECONOMIES OF ASIA
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
Agriculture is given subsidiary role in development policy even though it is vital to food security
and employment...............................................................................................................................2
Key aspect of agricultural sector.....................................................................................................4
Role of agricultural sector in contributing to economic and social aspects of Taiwan...................5
Engagement of modern techniques and technology to enhance agricultural productivity..............6
Problems faced by Agricultural sector at present time....................................................................7
Programs or measures used by Taiwan...........................................................................................7
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

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Introduction
The report provides an overview about the subsidiary role of agriculture in development
policy with reference to chosen Asian economy, Taiwan. Agriculture sector has made significant
contribution to economic development of all the Asian countries over the past few years. Since
the Taiwan economy has been predominantly agricultural, this sector is the basic source of their
food, raw materials and investment capital as needed by industrial sector. Agriculture sector
contributes passively to the development by providing food as well as labor to process of
industrialization. This view has been swept aside by dynamism of green revolution in the Asian
countries during the year 1960. This green revolution succeeded in increasing production and
since then this sector grew faster in developing world. In this aspect, the engagement of modern
techniques and technology used by the nations to enhance total productivity is also discussed in
this study. In addition, some of the key aspect of agricultural sector and its role in contribution to
economic and social aspect of Taiwan is also analyzed in this paper. The report also illustrates
about some problems faced by this sector in recent decades. Furthermore, few programs and
measures such as land reforms used by Taiwan are also elucidated in this study.
Agriculture is given subsidiary role in development policy even though it is vital to food
security and employment
In the 21st century, agriculture has been considered as the fundamental tool for reduction of
poverty and sustainable development. Taiwan economy has been hugely dominated by this
agricultural industry as it makes huge contribution to gross domestic product (GDP) and the total
exports and employment. In addition, it also contributes to rural development, food security and
conservation of this nation. Even though agriculture is important to food security and

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employment, this has been given subsidiary role in the development policy (Boestel 2013). The
Agricultural development Statute program promulgated by the government of this nation has
been identified as the milestone, which marked transformation of their development policy from
squeezing to supporting agriculture. There are many features stated in this Statute that provides
basis for favorable contemplation to this sector. These includes-
 Farmland tax exemption and tax inheritance for the lands that continues farm usage
 Rise of public spending for strengthening rural infrastructure and for adopting farmers
welfare measures
 Adoption of insurance program relative to agriculture for enhancing farmers income and
maintain social order
Refer to appendix-(Figure 1)
Following this Statute program, the development policies are illustrated below:
 Improvement in industrial as well as service sectors- The productivity as well as growth
of these sectors are generally based on the productivity of agriculture. However, the
government of Taiwan focused on improving the agricultural sector as the pace of
industrial and service sector development dovetails with this sector.
 Subsidies on both input as well as farmers welfare- The Taiwan government has allocated
budget for subsidizing different farming inputs and enhance farmer’s welfare. The main
reason behind this policy is to reduce the cost of production as it is considered as the
effectual method for enhancing farming profit (Otsuka 2013).
 Import regulation measures- Regulation of import have been integrated on the agriculture
products that this nation imports. There are many kinds of indicators that estimate the

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protection level as provided by regulation of imports. One of these indicators that have
been widely used for measuring intervention of government in agriculture is the PSE
(Producer Subsidy Equivalent). This measure has been mainly used by the Taiwan
government if import regulation of product is the kind of non-tariff barrier.
 Supply of agriculture savings for the industrial investment- This policy involves that the
savings from this industry will not be again invested in this sector itself as it does not aids
in creating marginal productivity. However, the savings from this agriculture industry is
again reinvested in the industrial sector for economic development.
Key aspect of agricultural sector
Owing to huge competition in global market, improvement in quality of product and increase
in value of output have become vital components of “blue-ocean” strategy for Taiwan’s
agricultural sector. Some of the key aspects of the agricultural sector of Taiwan are –
 Leisure agriculture- This aspect of the agricultural sector in Taiwan presents
opportunities for horizontal as well as vertical growth in this industry. Development of
this leisure agriculture has basically provided incentives for this industry for restructuring
and upgrading itself (Guangcai et al. 2012). In addition, this aspect of agricultural sector
is attributed to recreational lifestyles as well as ecological awareness. It has also helped to
attract large number of tourists and provided relaxed living conditions to the people
living in rural areas.
 High yields- Smart farming significantly leads to rise in yields along with lower
consumption of water. The high yield crops also curbs expansion of agricultural land,
which in turns benefits the farmers.

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 Terracing- This is a kind of landscaping that is mainly done for decreasing erosion as
well as surface runoff and utilized for growing those crops that needs irrigation. These
terraces have been built for making efficient utilization of the shallow soil and enable
crop irrigation.
 Multiple cropping- This refers to method in which the farmers grow multiple crops on
same land. In Taiwan, multiple cropping technique has been used for increasing the
productivity of land. Even this also helped their farmers to become diverse and use new
inputs.
 Extensive utilization of fertilizers- In Taiwan, the agricultural sector extensively applies
fertilizers as well as pesticides (agrochemicals) for obtaining higher yield. But this
excessive utilization of nitrogen fertilizers increases the risk of contaminating
groundwater and acidifies soil.
 Intertillage- This refers to ploughing operation that eliminates weeds that might form
owing to precipitation and irrigation. This aspect benefits the agricultural sector as it
positively impact on environment of crop growth, improve availability of nutrient and
eradicate weeds.
Role of agricultural sector in contributing to economic and social aspects of Taiwan
According to recent statistics of the year 2016, it has been seen that the agricultural sector of
Taiwan contributes to about 62064 TWD million of the Gross Domestic Product (GDP). In
combination with tourism and agriculture sector, it basically contributes to 11% of this nation
GDP. This nation exports around USD $5 billion worth of agricultural commodities to many
countries such as US, Japan, China, Canada etc. In addition, this country also imports some of
the agricultural products. Imports of the agricultural commodities also increase owing to WTO

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accession, which in turn help to open protected agricultural markets (Islam 2016). This industry
employs near about 540,000 individuals in this nation that is about 5% of total population. For
the last few years, the agricultural sector of this nation has also diversified their trade markets.
This sector also contributes to meeting the societal goals that includes development of some rural
areas, preservation of their cultural heritage, security of food and so on. This sector leads to
development of the rural sector, which in turn aids in reducing poverty of this nation. As large
number of individuals gets employed, it leads to improvement in their standard of living. It has
been stated by Islam (2016) that there is direct relationship between the cultural heritage
preservation and agriculture mainly because of two reasons that includes-
 System of utilizing land for economic activities
 For conservation as well as limits on the use of land
Furthermore, preservation of cultural heritage in this nation is also actualized via role of this
sector as manufacturer of collective products. However, this is also used as resource for local
communities of this country.
Refer to appendix-(Figure2)
Engagement of modern techniques and technology to enhance agricultural productivity
Green revolution led to engagement of modern techniques as well as technology in the
agricultural sector of this economy in order to increase overall productivity. It has been argued
by some researchers that owners of agriculture farms are the adapters of new technologies
mainly because of higher access to irrigation, fertilizers, seeds and water (Conway, Gordon and
Edward 2013). This nation used cloud information technology for increasing competitiveness of
agricultural sector in this nation. The government of this nation has also instituted traceability

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system of agricultural commodity that utilizes cloud technology and provides service to those
individuals who requires it in agri- business. For increasing safety of agricultural products, the
government of Taiwan promotes several certification systems that includes organic agriculture,
GAP and strengthening the verification as well as certification bodies for labeling to manufacture
safe goods and protect their consumers health (Pingali 2012).
Problems faced by Agricultural sector at present time
The agricultural sector of this nation faces several problems at the present time, which
includes-
 Aging population of farmers- The Taiwanese agriculture has been facing aging farmer’s
workforce, which in turn adversely impacts on the productivity growth and output of
land.
 Small as well as scattered arable land area- Scattered land area hinders modernization of
agriculture, reduces efficiency of resource utilization, increases marketing cost as well as
production, increases difficulty level for the framers in coordinating production and also
enhances social cost while promoting concentration of land (Yang, Dennis and Xiaodong
2013).
 Diseconomies of scale- Economies of scale always exist in agriculture sector that
measures the increase in agricultural inputs by same proportion. Diseconomies of scale
occur when the cost of production increases per unit (Wiseman 2014). The Taiwan
agricultural sector faces this issue in the present years.

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Programs or measures used by Taiwan
The programs or measures applied by this nation are given below:-
 Training program for the framers- The COA( council for agriculture) of Taiwan promotes
this program for improving professionalism of young farmers in farming. This program
has also been implemented for motivating young farmers to move into agri- business.
 Land Reform- Taiwan implemented this program for solving the agricultural problems.
The method used by this nation for implementing this program involves- Decrease in
total rent amount, providing security to the tenants against eviction and lease termination
and land-to-tiller program to assist tenants for acquiring their land (Prosterman, Roy and
Tim 2012).
I agree with the statement that agriculture is given subsidiary role in the development policy
even though it is important for food security and employment. The main reason behind this is
that this sector contributes to livelihood, economic activities and also provides environmental
services. But there are certain cases that reflect that there are several failures relative to
utilization of agriculture fir development. However, in several agriculture based nations, anemic
per capita growth in agriculture has been seen along with less structural transformations.
Conclusion
From the above report, it can be concluded that agriculture sector plays vital role in
development policy of Taiwan. This nation has achieved success in adopting advanced
agricultural technology specifically research stations, extension services etc. Due to this, it leads
to improvement in the agricultural development in the economy. This however improved both
the industrial as well as service, reduced poverty, developed rural areas and thus enhances

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economic growth of this nation. Furthermore, although this nation faces huge agricultural
problems, the programs implemented by their government helps them to mitigate these issues
and enhance agricultural growth.
References
Boestel, Joanna, Penelope Francks, and Choo Hyop Kim. Agriculture and economic development
in East Asia: from growth to protectionism in Japan, Korea and Taiwan. Routledge, 2013.
Bowler, I. R. "3 STRUCTURAL CHANGE IN AGRICULTURE." Progress in Rural
Geography (Routledge Revivals) (2014): 46.
Conway, Gordon R., and Edward B. Barbier. After the green revolution: sustainable agriculture
for development. Routledge, 2013.
Council of Agriculture, R. (2018). Taiwan’s New Power of Agriculture – the Training and
Prospective of Young Farmers － Council of Agriculture, Executive Yuan, R.O.C.(Taiwan).
[online] Eng.coa.gov.tw. Available at: https://eng.coa.gov.tw/ws.php?id=2505305 [Accessed 27
Feb. 2018].
Guangcai, Xu, Shi Yajun, Xie Xiangyan, Wu Huimin, and Ma Xiaolei. "Study on the Standard
System for Leisure Agriculture [J]." Chinese Agricultural Science Bulletin 15 (2012): 061.
Islam, Nurul, ed. Agricultural policy in developing countries. Springer, 2016.

10CHANGING ECONOMIES OF ASIA
Nedunchezhiyan, Maniyam, Susantha K. Jata, and Gangadharan Byju. "Sweet potato-based
cropping systems." Fruit Veg. Cereal Sci. Biotechnol. 6, no. SI 1 (2012): 11-16.
Otsuka, Keijiro. "Food insecurity, income inequality, and the changing comparative advantage in
world agriculture." Agricultural Economics 44, no. s1 (2013): 7-18.
Pingali, Prabhu L. "Green Revolution: Impacts, limits, and the path ahead." Proceedings of the
National Academy of Sciences 109, no. 31 (2012): 12302-12308.
Prosterman, Roy L., and Tim Hanstad. "Land Reform in the Twenty-First Century: New
Challenges, New Responses." Seattle Journal for Social Justice 3, no. 1 (2012): 25.
Shaojun, Z. H. A. N. G. "Effect of Intertillage and Subsoiling on Soil Moisture of Different
Crops." Agricultural Science&Technology and Equipment 4 (2012): 012.
Thorbecke, Erik, and Henry Wan, eds. Taiwan’s Development Experience: Lessons on Roles of
Government and Market. Springer Science & Business Media, 2012.
Tradingeconomics.com. (2018). Taiwan GDP From Agriculture | 1981-2018 | Data | Chart |
Calendar. [online] Available at: https://tradingeconomics.com/taiwan/gdp-from-agriculture
[Accessed 12 Mar. 2018].
Wiseman, Hannah J. "Remedying regulatory diseconomies of scale." BUL Rev. 94 (2014): 235.
Yang, Dennis Tao, and Xiaodong Zhu. "Modernization of agriculture and long-term
growth." Journal of Monetary Economics 60, no. 3 (2013): 367-382.

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Appendix
Figure 1: Contribution of agriculture in Taiwan’s employment
Source: (Boestel et al. 2013)
Figure 2: contribution of agriculture to Taiwan GDP
Source: (tradingeconomics.com 2018)