After the farmhouse construction regulations were introduced, farmland transactions shrank; a price drop has yet to be seen
The Yilan experience of rampant farmhouse construction led to the amendment of the Regulations Governing the Construction of Farmhouses in ROC year 104 (2015), stipulating that farmhouses may not be built in the middle of fields and that only farmers enrolled in farmers' insurance and members of farmers' associations and irrigation associations may build farmhouses, which amounts to a major restriction on farmhouse construction. But has the volume of farmland transactions actually been dampened? Have prices fallen too? Operators in Yilan, Nantou and Kaohsiung, which rank among the top of the farmhouse construction league table, have all admitted frankly that transactions have indeed shrunk substantially, yet farmland prices have not been much affected, and a fall will "still take some waiting."
According to statistics from the Council of Agriculture, the counties and cities with severe rampant farmhouse construction across Taiwan include Yilan, Nantou and Miaoli, among others. From ROC year 97 (2008) to ROC year 103 (2014), the top-ranked Yilan County issued a total of 4926 farmhouse construction permits, Nantou issued 3046, Miaoli issued 2423, and Hsinchu had more than 1600.
Increase in number and proportion of farmhouses in each county and city from 2000 to March 2013
Violation inspections from two years ago still unreported; Council of Agriculture sighs: local governments are just brazen
In order to curb the emergence of "luxury farmhouses" in various places, the Regulations Governing the Construction of Farmhouses was formally amended and passed in ROC year 104 (2015), and the Council of Agriculture also held meetings with local governments, demanding that they promptly "carry out inspections" of the more than a thousand violations across Taiwan; but the actual reported results were pitiful. Reporters repeatedly asked the competent authority, and it turned out that for the violation spot checks from the year before last, there were still local governments that had not reported back to this day. The Council of Agriculture could only shake its head and sigh repeatedly, "Local governments are just brazen!"
In the absence of territory-wide statistical data, reporters separately asked the Yilan and Nantou county governments, which rank at the front of the farmhouse construction league table. Among them, Yilan County, which ranks at the top, responded through Chen Te-hsing, director of the Department of Agriculture. He pointed out that in the whole of 2015, the violation cases found in spot checks totaled only about 217, including unauthorized additions to farmhouses and stealthily built perimeter walls, and the total amount of fines imposed was NT$14 million. As for what the total base number subject to spot checks should be? He said it "remains to be inventoried." As for the "report and demolish immediately" that the new government vigorously called for after taking office, Chen Te-hsing admitted frankly that "it is not being done now."
In Nantou County, which took the "runner-up" spot in farmhouse construction, its director of the Department of Agriculture, Chen Jui-ching, stressed that 48 violations had already been spot-checked, but the specific amount of fines could only be confirmed after the cases complete all statutory procedures.
Farmland not used for farming; Council of Agriculture corrected by the Control Yuan
The Council of Agriculture and local governments, which appear powerless in inspection, not only drew criticism from farmers around the island, but also, because large amounts of farmland are not used for farming, were corrected by the Control Yuan early last year. The case pointed directly at how "the Council of Agriculture has not actively supervised and evaluated local governments, strengthened inspections and crackdowns on violations in the use of farmhouses and their agricultural land, resulting in large-scale violations in the use of farmhouses and their agricultural land across the country, seriously damaging the agricultural production environment and hindering rural development."
Current state of farmland buying and selling? Transactions down sharply, prices still high
More than a year has passed since the amendment, which was meant to bring farmhouse construction under the rule of law, but in reality, has the ever-hot farmland trade been affected? Legislator Chiu Yi-ying pointed out during an interpellation that after the new law took effect, farmland transaction volume across Taiwan shrank by 46%, and transaction value fell sharply by 56%, indeed effectively curbing the problem of farmland speculation.
In addition, a broker surnamed Lee with more than ten years of buying and selling experience also said that after the ROC year 104 (2015) amendment, farmland buying and selling fell sharply, and farmhouses also became a "high-priced rare item"; NT$8 million can only buy farmland on the outskirts of Yilan, and coupled with the restrictions on farmers' insurance eligibility and the rule that land must be held for two years before a farmhouse may be built, farmland transactions have slowed. She also pointed out that the government uses aerial photos to determine the location and scale of use of farmhouses, and imposes fines whenever it catches one, so she advised reporters that they should choose to buy a farmhouse that is already built, so that whether to make money or to live in it themselves, they can "seek good fortune and avoid disaster."
Chen Pi-yuan, a real estate appraiser at Gao Yuan who knows Yilan farmland transactions very well, pointed out that after the ROC year 104 (2015) amendment tightened the qualifications for building farmhouses, farmland transaction volume did indeed fall sharply, and the number of transactions now is roughly only half of what it was before the amendment, but farmland prices, after the turbulence, fell by only 10%, because whether for investment or personal use, these landowners absolutely will not sell at a loss after buying; instead they choose not to build farmhouses and leave the farmland idle, since after all, if no farmhouse buildings or agricultural facilities are built, there is no need to pay land value tax.
As for Yilan County Acting Magistrate Wu Tse-cheng's move to cancel the additional tax on farmhouses, Chen also stressed that it could set off another peak in the farmhouse transaction market.
Besides Yilan, Meinong, known as the "back garden of Kaohsiung," has also seen its farmland prices soar amid speculation in recent years. Has the amendment really cooled the speculation? Lin Chun-ching, secretary-general of the Anti-Reservoir Alliance, who also runs a homestay in Meinong, said that the situation here now, simply put, is "there is a market but no buyers"; transaction volume has fallen sharply, but farmland prices have not dropped much, because after the legislation it became much harder to apply to build a farmhouse, and with no intention of trading, many landowners simply let things go.
How can farmland prices return to the right track?
After farmhouses came under regulatory restrictions, many farmers hoped that farmland prices would also fall and that farmland would fulfill its substantive function of being used for farming, but in fact, after transactions cooled, these unsellable plots became what legislators called an after-effect: abandoned farmland.
As to how to solve such consequences, Chen Pi-yuan pointed out that existing regulations appear on the surface to be able to curb transactions, yet cannot make farmland prices fall sharply. To bring prices back to the right track, the best approach is to return to the strict controls in place before the 2000 amendment of the Agricultural Development Act, so that farmland cannot be freely bought and sold.
Lin Chun-ching stressed that improving the problem requires holistic thinking. Farmland is not merely pure production; it can also provide alternative values such as environmental protection and education. As long as farmland prices are made equal to the prices of other land uses, while raising farmers' incomes, it should be possible to minimize the chances of land being sold and speculated on, while also promoting the use of farmland for farming. After all, these lands are precious assets left by ancestors; otherwise, who would be willing to sell their own roots? He called on the government to carry out reform gradually.