The old farmer allowance should be reformed as soon as possible, lawyer Zhan Shungui speaks out

Photo / Guo Zhirong

Whenever elections come around, all kinds of money-pit bills are recklessly proposed or topped up without any discrimination. Recently the old farmer allowance has been a hot topic. The Democratic Progressive Party was the first to call for an increase of one thousand yuan, but its ten-year policy platform (also the main axis of Tsai Ing-wen's election campaign platform), in the agriculture section, clearly only mentions "continuing to administer the old farmer allowance," with no policy proposal for an increase. Yet now it has become the party's unified mainstream policy position from top to bottom, and it opposes means-testing. Kuomintang legislators from the south then demanded an increase of two thousand yuan. The Kuomintang or the government knows full well that a simple increase is inappropriate, and does not want to do the DPP's work for it, yet also does not want to lose votes. So should it increase again? Should there be means-testing, or how should means-testing be done? To this day it remains hesitant and undecided.

The government has long neglected agriculture and shortchanged farmers, causing widespread hardship in farmers' lives. Therefore, at this stage the author does not oppose the old farmer allowance, but believes it should no longer continue indefinitely in an unclear and unexplained "provisional" manner. As for how to handle the old farmer allowance issue, one should first examine its nature and the purpose for which it was originally established, so as to be able to serve up policy meat that truly helps revitalise agriculture and care for farmers. 

Professor Wu Mingmin, a scholar at the DPP's think tank, believes this is not a top-up of a policy subsidy, but a means of supporting old farmers' minimum standard of living and realising basic social justice. In fact, the nature of the old farmer allowance can be understood simply from the name of its statute, the Provisional Regulations on Welfare Allowances for Elderly Farmers: since it is a "provisional" "welfare allowance," in nature it is more like a kind of social welfare measure, and so naturally should have "means-testing"; and because it is named a "provisional regulation," it should only be a transitional measure. Moreover, the legislative purpose set out in Article 1 of these regulations is to care for the lives of elderly farmers and enhance farmers' welfare, so there should all the more be supporting criteria to determine who is genuinely engaged in agriculture. This is also where the current debate over whether to increase the allowance is most challenged.

These regulations were enacted in 1995. Named provisional regulations, they were originally expected to be merged into the national pension in the future. But under politicians' election-first thinking, not only has this been delayed to this day, but increases of one thousand yuan each were added in 2003, 2005 and 2007 respectively. Judging by the current atmosphere, this year will inevitably be the same. In addition, after the means-testing restriction was abolished in 1998, the number of allowance recipients has surged from about 450,000 to the current 687,000, far higher than the population actually engaged in agriculture. May I ask each presidential candidate: after this, will you continue to make it provisional and top it up at every election? Or are you willing, after taking the highest office, to reconsider and rethink?

In institutional terms, since it is only a transitional provisional regulation, it should sunset as soon as possible and return to being a long-term policy. To achieve the original legislative purpose of these regulations, there are in fact many better alternatives. First, the value of agriculture should be recognised. Second, agriculture should be given a future: this includes encouraging the local economy, curbing middlemen from exploiting both farmers and consumers, establishing a production-and-marketing monitoring and early-warning system that can avoid production-and-marketing going out of control as much as possible, and implementing direct payments (livelihood support payments) and area-based payments.

The direct payments or area-based payments here are paid to genuine farmers who properly care for farmland and engage in agricultural production. Their substance lies in the government budgeting funds to compensate farmers for income losses from supplying food at fair prices to feed the urban population due to the government's planned suppression, for maintaining national food security on the government's behalf, and as subsidies to protect the intangible public good of the agricultural production environment. Among these, livelihood support payments can continue all the way to care after old farmers retire, equivalent to the state giving old farmers a pension.

Under such an institutional design, the key to whether one can receive these two kinds of payments lies in whether one is actually engaged in agricultural production and whether one properly cares for farmland. Naturally there is then no question of means-testing or not, and because both life when young and life when old are protected, it can truly attract more young people to return home to farm, which in turn can protect farmland from being used in violation of regulations and lower the unemployment rate.

According to estimates by agricultural economists, with the existing old farmer allowance plus various visible and hidden subsidies, the annual budget from next year will reach nearly 85 billion yuan, accounting for 44% of the Council of Agriculture's annual budget. But these provisional regulations have been in effect for 16 years now, and the Agricultural Development Regulations have been in effect for nearly 40 years. The current situation, however, is that agriculture is increasingly declining, old farmers are gradually passing away, and even the farming workforce cannot be sustained. I advise those competing for the highest office to make good use of this huge budget and take this opportunity to put forward clear transformative policy proposals, winning broad recognition from farmers and the general public, rather than competing to top up the allowance and engage in short-term speculation to win votes! (The author of this article is a lawyer.)