Role Of Agriculture In Development Policy: A Case Study Of Taiwan

Agriculture is often given a subsidiary role in development policy even though it is vital to food security and employment. “ Discuss with reference to an Asian economy of your choice.
 

Agriculture sector and its contribution to the economic development of Taiwan

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.

In the 21^st 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 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 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. 

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.
• 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. 

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 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

The subsidiary role of agriculture in development policy

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)

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 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). 

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.

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 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

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Thorbecke, Erik, and Henry Wan, eds. Taiwan’s Development Experience: Lessons on Roles of Government and Market. Springer Science & Business Media, 2012.

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