View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by IDS OpenDocs Agriculture in Taiwan and South Korea. the minimalist state?' Mick Moore Introduction agricultural economy in Taiwan and Korea since the As is discussed elsewhere in this Bulletïn issue, the early 1950s: degree of state involvement in economic decision- That in the early stages of industrialisation state making in Taiwan and South Korea has been action which considerably 'distorted' price ratios understated by adherents of the economic doctrines of affecting agriculture played an even more important laisser faire. This debate about the extent of state positive role in promoting agricultural growth than is intervention has focused mainly on the industrial implied by examining the transfer of resources from sector. The proponents of laisser faire have been agriculture to industry. This intervention also helped unable to garner much support for their interpretations to provide an appropriate supply of the 'right' kind of of the Taiwanese and Korean experiences from the industriallabour, and to maintain thepolitical policies practised towards agriculture. For the high quiescence of the rural population. degree of stateinterventionintheagricultural economy has been well documented. This is especially That even in countries like Taiwan and South true of Taiwan, where relatively fast agricultural Korea where senior bureaucrats and politicians growth since the 1940s is widely attributed to activist making economic decisions are to a relatively high public policy [eg Johnston and Clark 19821. Lee [19711 degree insulated from direct political pressures to in particular has detailed how in the early stages of alleviate the material conditions of large population Taiwan's rapid post-war growth, the state extracted groups [HoTheinz and Calder 1982], changes in from agriculture a large volume of material resources economic structure generate strong political pressures (finance, food, labour and exports) to support for the state to intervene in the economy in new ways. industrialisation. The main mechanisms used were: That market forces alone often cannot achieve obligatory rice deliveries from all paddy farmers at the kinds of economic restructuring which is required low prices; monopoly control over fertiliser supply, to adjust to, and facilitate further, rapid economic sugar cane processing and foreign trade in the major growth. agricultural commodities; and a quasi monopoly of the foodgrain trade. Monopoly state control of foreign These three conclusions have two broad implications trade in foodgrains and of agricultural input supply, for the debate about the relative roles of public action and widespread official coercion (in the l970s) to and free markets in the economy generally. One is that influence farmers' production practices have been state action in apparent violation of market principles documented for Korea [Aqua 1974; Ban et al 1980; can play a very positive role in promoting economic Brandt 1977; Reed 1979; Wade 1982, 19831. growth. The other isthat political and economic Is agriculture in some way a special case? Do the extent imperatives may make high levels of state involvement and consequences of substantial state intervention in in economic decision-making practically unavoidable. agriculture have little or no bearing on the debates about the actual, feasible and desirable degrees of Agriculture and Industrial Growth in the public regulation of the economy as a whole? This article argues that this is not so. It indicates three 1950s and 1960s conclusions about the relationship of the state to the After the land reforms of the late 1940s and early l950s [Thorbecke 1979:172-6; Ban et al 1980:ch 10] the The author is gratefut to Robert Wade and Gordon White for comments on an earlier draft of the paper. For reasons of space, no agrarian systems of Taiwan and South Korea were references or details are given when making points about changes in remarkably similar. Their main features were: the economic structure. predominance of small family farms averaging about IDS Bu/leus,984, vol5 uy 2. tustuute si Developroexi 5(udres. Sussex 57 one hectare; the dearth of large farmers, landlords and tended to see themselves only as temporary members landless agricultural labourers; the dominance in the of the industrial workforce, and were correspondingly cropping pattern of rice, which was grown by most particularly unlikely to organise politically. Labour farmers; a high degree of dependence of agricultural turnover was often high, and this proved especially production on current inputs supplied from within the convenient for employers during industrial recessions, family farm, notably labour and organic fertiliser; the when the small farm sector served as a temporary limited role of fixed capital other than land and refuge for those who would otherwise have expected publicly owned and managed gravity flow irrigation non-agricultural jobs. Equally, rapid labour turnover facilities; and the prime reliance of farm families on and the inability of the labour force to assert claims to agricultureasa source of income, with non- permanent employment made it especially easy for agriculture providing about 20 per cent.2 industrialists to respond quickly to changes in market opportunities and switch product lines. The structure of the agricultural economy made farmers relatively easy prey for sets of policies which In the third place, a rural economy comprising mainly subordinated agriculture to the goals of industriali- small family farmers found it especially difficult to sation and strengthening the state in relation to its organise politically to oppose the anti-agriculture bias external enemies and potential internal opponents. In of economic policy. This not only made it easier to the 1950s and 1960s agriculture contributed to these pursue thispolicy,but helped topreventthe goals in three ways. emergence of political conflict and instability which would have frightened domestic and foreign industrial In the first place, policies to depress agriculture's investors. terms of trade extracted significant surpluses of a) cheap food which lowered industrial wages and thus In the Korean case rural political instability was less of production costs; b) financial resources; and e), in the a threat in the l950s and 1960s because land reform Taiwanese case, agricultural exports, to fuel industrial- and the events surrounding the Korean war had isation. As ismentioned above, in Taiwan this largely ameliorated or eliminated the rural radicalism, objective required high levels of direct state control of especiallyanti-landlordism, which had been so foreigntrade, sugar cane processing, foodgrain prominent in the late 1940s. marketing and agricultural input supply and output procurement. Korea by contrast was and remains in substantial food deficit. The primary mechanism for In Taiwan the threat was more real, especially because the exploitation of agriculture was to deny it the of the danger of the fusion of farmers' occupational protection awarded industry and to import large grievances with the resentments of the mainly quantities of foodgrains, often on concessional terms. agricultural Taiwanese population against Mainlander Compared to Taiwan, state agencies did not intervene Nationalist rule. An important aspect of the response very directly in the domestic agricultural economy, of the ruling Kuomintang, both in rural and urban and indeed to a large extent ignored it [Kim and Jhoo areas, was what might be termed 'political gap-filling': 1982; Ban et al 1980]. thecreation, under state and ultimatelyparty sponsorship, and 'guidance', of monopoly organi- In the second place, adverse terms of trade for sations to fill, in a formal sense, every possible need. agriculture ensured a continual flow of new applicants This was closely allied with a) the attempt, largely to the industrial labour force. Since these migrants successful in a formal sense at least, to make the KMT came largely from farm families - rather than itself into a mass party and to induct into it those who landless households - they maintained rights and emerged as leaders in any sphere of activity; b) the connections in the rural areas which inhibited the close monitoring of religious institutions and sects, formation of proletarian consciousness in the urban which cannot be formally incorporated into civic and industrial environment. The demographic char- associations, and which, because of the strong ties of acteristics of the applicants for industrial jobs add religion with locality and community in Taiwan, have weight to this point. Married males tended to stay on a potential political dimension; and e) the establish- the farm. Industrial employers were able to recruit ment. albeit originally very reluctantly and under younger males and females. The latter in particular considerable direct and indirect American pressure, of a facade of extreme democracy: endless elections A few significant differences might he rioted; after ihe repair of the damage and dislocations caused by Second World War, the Korean (Tatwanese probably vote more often than almost any War, and the descent of the Chinese Nationalists upon Taiwan, other people in the world) to territorial government at Taiwan re-emerged with an export surplus of rtce and sugar while all levels (village, township, county, province, China) Korea, having been a rice exporter under the Japanese. became and and to 'civic associations',