Fallow land subsidies cost 102.7 billion, yet become a stumbling block for young people entering farming
Text by Lu Hsun (Director of the China Grain Products Research and Development Institute) and Liu Chih-wei (Adjunct Assistant Professor at Shih Hsin University)
While Taiwanese society is in an uproar over retirement benefits for military, public and teaching personnel, few realize that in recent years the government has spent nearly 10 billion on fallow-land subsidies. Of the landowners receiving fallow-land subsidies, 58% are not farmers at all. We pay our taxes through hard work, which amounts to handing over shining silver to a group of landowners to maintain the asset interests of their farmland.
Moreover, fallow-land subsidies are not only inconsistent with fairness and justice, they are of no help to agricultural development. More importantly, they seriously hinder young people's willingness to take up farming, causing Taiwanese agriculture to decline even further.
Since 1997, in response to the impact of joining the WTO, the government simply rolled out a fallow-land subsidy policy. From 1997 to 2010, the amount spent on fallow-land subsidies totaled 102.777 billion yuan! This approach of waving the white flag before the battle has even begun has completely strangled the possibility of Taiwan's agricultural transformation.
When farmland is left fallow and receives subsidies, the farmland not only fails to serve its purpose, it also directly drives up farmland rental prices. Unless rental income substantially exceeds the subsidy amount, landowners and elderly farmers would rather leave their land fallow than rent it to other young people who are interested in agricultural production. And since the fallow-land subsidy policy appeared, many landowners and investors have treated farmland in Hualien-Taitung and central and southern Taiwan as an investment target, using fallow-land subsidies under the protective umbrella of low-interest-rate policy to pay low loan interest.
Since the fallow-land subsidy measure appeared, young people interested in farming, unless their own family happens to have a plot of land for them to cultivate, generally find it very difficult as non-farming youth to rent farmland in rural areas. Even if they do rent some, the rent is high, making it completely uneconomical.
Although agricultural authorities have in the past held agricultural drifters' camps and today have established farmers' colleges, hoping to guide young blood into the ranks of agriculture, the reality shows that most "non-farming youth" are stuck on the farmland problem and cannot find a way in. And some young farmers who are already farming and who have a corporate management philosophy, when they try to break free from the constraints of traditional smallholder farming and move toward scaled operations, likewise cannot rent farmland at a reasonable price.
Today the distribution of farmland use in Taiwan has become extremely distorted: on the one hand, fallow farmland is everywhere, and farmland owners happily collect fallow-land subsidies; on the other hand, a group of young people are distressed because they cannot rent farmland, yet they must pay taxes to support the fallow-land landowners.
At the same time, in addition to the 10 billion spent each year on fallow-land subsidies, agricultural authorities must also pay 50 billion each year in elderly farmer allowances; these subsidies have completely squeezed out the space for agricultural research, agricultural development and agricultural extension funding. Taiwan's agriculture not only lacks the addition of young new blood, its agricultural competitiveness is weakened as a result!
It is urgent to re-examine fallow-land subsidies and think about how to revitalize fallow farmland. If the right to use fallow farmland could be released to young farmers, whether for growing coarse grains, or for using the sunshine of central and southern Taiwan to build solar greenhouses and grow high-value vegetables and fruits, or even for organic cultivation, the economic benefits that could be generated would all be far higher than fallow land. More importantly, only then could Taiwan's agriculture have an opportunity for developmental transformation and improved competitiveness.
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