The development successes of East Asia–Japan and the four ‘Tiger’ economies; South Korea, Taiwan, Singapore and Hong Kong are associated with rapid industrialisation. While this is true what is often overlooked is the agricultural revolution that preceded the industrialisation and laid the foundation for sustained growth. Japan, South Korea and Taiwan undertook extensive land reforms after World War II when their economies were reliant on agriculture and farms employed a large share of the workforce. In the decade following reform, agriculture production in Japan increased 50 percent.
South Korea’s land reform saw rice yields per acre nearly double, while rice exports climbed an average of 40 percent per year in the 1960s and 25 percent per year in the 1970s. In Taiwan, rice yields increased by 60 percent per hectare in the decade following land reform, while the value of rice exports grew from 9 percent of GDP in 1952 to 50 percent by 1979. Surpluses from agriculture were reinvested in industry.
Parallel investments in education meant that the farmers sent their children to school, creating the educated workforce for the industry that followed. These may hold some lessons for Sri Lanka where agriculture employs 28% of the workforce but contributes only around 8% of GDP. Although Sri Lanka did carry out land reform, the land taken over from large landlords was not redistributed to tenant farmers but remained in state hands.
Ownership of agricultural land, pre-reform in Japan, Korea and Taiwan was dominated by a small number of large landlords who owned the majority of the land and rented it to tenant farmers. Monsoon rice farming by family labour was the predominant form of traditional agriculture in all three cases (Oshima 1986). The Japanese invasions in Asia played a role both in the development of agriculture and the bureaucracy of its colonies. Japan invaded Korea and Taiwan during its imperialist expansion from 1895 lasting until the end of WWII.
In Korea and Taiwan, the occupying Japanese government invested in irrigation projects and extension services for new seed varieties and fertilisers with the intention of convertingthem into suppliers of cheap rice. The Japanese also conducted extensive land surveys and registered land holdings for better tax administration and collection; this was done in Taiwan from 1898 to 1905 and in Korea from 1911 to 1918 (Yoo and Steckel 2010).
This pre-existing legal infra-structure: reliable land records and proper titles, would later facilitate postWWII land redistribution. Proper land records are important The implementation of agrarian reform was facilitated by the existence of a competent bureaucracy and the presence of adequate records on land ownership and tenure relations.
The success of any policy is dependent not only on its design but also in its implementation. A competent bureaucracy is therefore the prerequisite for successful implementation. The low level of corruption within the bureaucracy ensured the policy was not distorted during implementation.
The different outcomes between the Philippines and the other countries of East Asia is blamed on corruption.
“In the Philippines, failed land reform maintained high inequality and domination of the landed elite in both politics and economy, which led to persistent political clientelism, increasing patronage in bureaucracy, and policy capture by the powerful elite. In contrast, successful land reform in South Korea and Taiwan dissolved the landed class and produced egalitarian socioeconomic structure, which helped to maintain state autonomy, contain clientelism, promote meritocratic bureaucracy, and develop programmatic politics over time.” (Jong-sung You, 2014)
“When Korea, Taiwan and the Philippines gained independence after World War II, they were all similarly poor; if anything, the Philippines was ahead of the other two countries in terms of per capita income as well as educational attainment.” (Jong-sung You, 2014)
Among the three countries, Korea had the most unequal distribution of land and the lowest per capita income. Japan had a higher initial income per capita than the other two and the distribution of land was less unequal than that of Korea, whereas Taiwan initially had the most equal distribution of land before the reforms, and its income per capita was lower than that of Japan. In Japan, in 1941 only 54% of farmers owned their land. In South Korea, in 1945 only 36% did so.
In Taiwan, in 1946 the number was 56%. Post re-distribution, land ownership by farmers reached 91% in Japan (1955), 82% in S.Korea (1965) and 85% in Taiwan (1956). In all cases, reforms set a ceiling on the farmland size but there is no evidence that these ceilings were a constraint on farm productivity. In South Korea, reforms helped political stability in the newly established republic which had just emerged from a war with North Korea.
The agrarian reform in Taiwan was implemented against the background of a popular uprising in 1946 and the need for the Kuomintang government to gain popular support in the countryside, as well as impose its authority on the local Taiwanese elite. Landlords were obliged to sell all tenanted land above three hectares of paddy field (or equivalent) to the government, which then resold it to tenants.
Although politically inspired, the land reforms contributed significantly to the pace of their subsequent economic growth. It did so in three ways: by releasing labour from agriculture to industry, by supplying low-cost food to the industrial workforce, and increased farm incomes resulted in a higher savings rate and faster capital accumulation. Land reform, done well can pay good dividends, both politically and economically.
The writer is an independent consultant