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Irrigation Agency


A brief history of modern industrial development in Taiwan

I. A brief history of modern industrial development in Taiwan

In the early days of Retrocession (1945), Taiwan faced a series of challenges. Economically, as a result of the ravages of war, more than half the industrial plants and mines on the island were destroyed, power generation facilities semi-paralyzed, farmland irrigation and transportation systems damaged to varying degrees and there were severe shortages of daily necessities. In 1945, about 46% of the population worked in agriculture, but rice production was only 640,000 tons, 220,000 tons less than the minimum consumption for the province as a whole, representing a major grain shortfall; In terms of industry, power generation, fertilizer and cement output were only 1/3 of earlier levels. In general terms, production fell, all industries were in decline, and living standards significantly dropped.

In order to ensure adequate food supply, post-war economic rebuilding focused on agricultural production. On one hand, it ensured people would not starve, but it also laid the foundation for industrial development. Thereafter, the relationship between agriculture and industry has been inseparable. From Retrocession to the present, Taiwan's agricultural and industrial development can be largely divided into six periods:

(I) Agricultural and economic recovery after Retrocession (1945-1952)

The cultivation of sugarcane fields in the early days of Retrocession.
The cultivation of sugarcane fields in the early days of Retrocession. Sugar was the first agricultural product to earn foreign exchange in the early period of agricultural development Taiwan (Source: The 70 year history of the Jianan Irrigation Association)
In the early days of Retrocession, land holdings were highly unequal. Landlords accounting for 10% of the rural population owned more than half the arable land. In order to break the feudal system of rural land ownership and ease the contradictions in rural society, the government implemented land reform. From 1949, the government has implemented various reform measures such as 375 Rent Reduction, Release of Public Land, and the Land-to-the-Tiller programs to improve the rural production environment. By 1952, agricultural production had bounced back to the highest pre-war level of 1.5 million metric tons.

(II) Developing agriculture and cultivating industry (1953-1972)

The industriousness of farmers boosted the development of light industry
The industriousness of farmers boosted the development of light industry in Taiwan and that planted the seeds of the "Taiwan Economic Miracle."

In the early 1950s, although the economy basically recovered, the economic situation faced by the government was still difficult. At that time, military spending was extremely high with a large fiscal deficit, and there was a shortage of industrial resources, capital, and technology. The surplus of sugar, rice, bananas and other agricultural products that were initially depended on to earn foreign exchange fell as the population grew rapidly and so earned less foreign exchange, with the unemployment rate rising to about 10%.
In order to ensure economic development took root the government rolled out the "Four-Year Economic Development Plan," which was implemented in five phases until 1972. Under the basic policy of "Agriculture nurtures industry and industry facilitates agriculture," increasing production was still the primary goal of agricultural development, and increasing land productivity the major means of increasing production. Therefore, in addition to actively implementing irrigation projects, the government adopted labor-intensive farming in agriculture to increase the cropping index, and reinforce agricultural production improvements and rural society reforms. After the promotion of various measures, exports of agricultural produce reached more than 80% of total production output. Indeed, much machinery and raw materials required by industries were exchanged for exported agricultural produce, and farmers' income and purchasing power increased, which resulted in the development of light industry.
After 1969, with the gradual rise of light industry, the agricultural labor force gradually decreased as did labor intensiveness, farmers' incomes were relatively low and the agricultural sector experienced negative growth. Therefore, in the fifth phase of the economic development plan, agricultural policy was reviewed, and shifted from increasing land productivity to improving agricultural labor, with the aim of increasing farmers' income.
In addition, the continuous growth of industry, increased number of factories, and accelerated population concentration prompted a rapid increase in new communities and factories, with domestic wastewater discharged into farmland drainage channels, resulting in agricultural irrigation water pollution. In 1969, to address the situation, the Enforcement Rules of the Irrigation Act were revised and a category of "area drainage" added, with area drainage thereafter considered independent.
In summary, in addition to maintaining a stable food supply to ensure social stability, Taiwan's farmland irrigation operations facilitated industrial development as highlighted by the basic policy of the Economic Development Plan.

(III) Industry-based rapid economic development (1973-1978)

The yellow rice fields are the way home.
The yellow rice fields are the way home.
In 1973, the government launched the policy of "Everything for the economy, everything for export." However, while continuing to vigorously promote the expansion of industry through imports and exports, it also developed heavy and chemical industrial products as part of an import substitution policy and established a comprehensive industrial development system. At the same time, infrastructure was strengthened, including electricity and transportation projects, improving the investment environment. In 1976, the "Ten Major Construction Projects" were launched to accelerate the adjustment of economic structure.
The "Ten Major Construction Projects" mainly focused on strengthening transportation and industrial development. In addition an "Accelerated Rural Construction Plan" was implemented for farmland irrigation projects, focused on strengthening the transformation of arable land and improving the functioning of existing irrigation and drainage facilities and systems, thereby minimizing the need to build new facilities. The goal of current agricultural policy was to improve the agricultural labor force and increase the income of farmers. At the same time, it also aimed to adjust the organization of agricultural production and how it was managed, while promoting modernization so as to adapt to the needs of future economic development.
At this stage, agriculture in Taiwan had declined from its peak and required restructuring. Moreover, farmland irrigation projects needed to work hand–in-hand with the new situation to reduce flooding disasters and maintain the function of existing facilities so as to assist agricultural production and operations.

(IV) Economic transformation and industrial upgrading (1979-1985)

Expanding farmland re-adjustment
Expanding farmland re-adjustment and promoting the transformation of fragmented cultivated land into larger plots to improve the agricultural production environment and expand the scale of farm operations.

The second Oil Crisis in 1979 impacted Taiwan's economy, and the competitiveness of exports declined due to the substantial increase in energy prices and wage levels. As a result, the government began to adjust its strategy of continuing to develop heavy and chemical industries, and instead focused on technology-intensive industries, proactively developing industries with high added value and low energy intensity, including machinery, electronics, information, electrical machinery and vehicles. These were defined as strategic industries and given development priority.
However, despite rapid economic development, the growth of agricultural production remained slow, and farmers’ income was still relatively low. In 1982, the government promulgated the "Second Stage Agricultural Land Reform Plan,” the main content of which was to provide land purchase loans, implement agricultural land readjustment (with 70,674 hectares completed in that period), implement agricultural mechanization, and introduce methods of joint, entrusted and cooperative management to expand the scale of farm operations. In this period, the focus of agricultural policy was still to adjust the structure of agricultural production and management methods to improve the agricultural labor force, and increase farmers’ income. Consequently, the government concentrated on minimizing the impact of natural disasters on agricultural production for farmers, and how to reduce disaster damage to society and people's livelihood in general so as to ensure social stability and guarantee the results of economic construction. As a result, "Accelerating the Improvement of Critical Farmland Drainage Systems" became an important part of the "Twelve Major Construction Projects".

(V) Comprehensive adjustment of agricultural modernization (1986-2001)

Farmer families have fewer free months, and it is twice as busy in May.
Farmer families have fewer free months, and it is twice as busy in May.

After the launch of the "Twelve Major Construction Projects", Taiwan's economy grew steadily, but despite the transformation of agricultural production, farmers’ incomes remained low, and agricultural modernization did not achieve its expected goals. In order to ensure agricultural modernization adapted to future economic development and achieved sustainable development the government continued to promote agricultural construction plans to meet the needs of the times. For example, the "Program to Improve Agricultural Structure and Increase Farmers' Income" (1986-1991), and the "Comprehensive Agricultural Adjustment Program" (1992-1997). These were based on the principle of maintaining farmland irrigation projects, and ending large-scale new investment and construction. As a result, the government began to implement a renewal and improvement plan for large-scale irrigation facilities to maintain their normal functioning.
With increases in average income and changes in eating habits, Taiwan's surplus rice production gradually increased so the government introduced the "Six-Year Plan for Rice Production and Rice Field Conversion." The number of hectares dedicated to rice production fell to 363,000 hectares, a decrease of 44%; during the same period, the yield of brown rice dropped from 2.48 million metric tons to 1.68 million metric tons, a fall of 32%; the amount of rice purchased by the government also decreased from 1.1 million metric tons to 450,000 metric tons, a fall of 59%. About 180,000 hectares of paddy fields were converted to fallow land under guidance, of which more than 60,000 hectares were fallow and green manure, and more than 110,000 hectares were converted to grain, horticulture and miscellaneous crops. The conversion of rice fields had a positive impact on cutting surplus grain and reduced the financial burden on the government, but it also impacted the original three-generation function of rice fields.
After joining the World Trade Organization (WTO), in response to the further liberalization of agricultural trade, the government embraced three policy goals: stabilizing supply and demand and food prices in order to ensure domestic food security; complying with WTO norms while maintaining the well-being of farmers; and strengthening farmland ecological conservation and maintaining the sustainable utilization of farmland. In 1997, the "Paddy and Upland Fields Utilization Adjustment Plan" was implemented to promote the planned production of rice, and encourage districts to leave fields fallow in concert with irrigation system guidance, to balance of supply and demand of rice.

(VI) After Taiwan joined the World Trade Organization (from 2002 onwards)

Upland farming irrigation pipeline facilities save water
Upland farming irrigation pipeline facilities save water, labor and time, and are able to resolve irrigation difficulties in hilly areas, reduce the cost of irrigation, increase yield per unit area of crops and improve crop quality.

In 2002, Taiwan officially joined the World Trade Organization (WTO). To cope with related economic and trade liberalization, domestic agricultural management developed towards producing competitive and high-quality agricultural produce, so the management of irrigation water had to be upgraded to more precisely provide water, some farming migrated to use more precise irrigation methods and water supply management, and modern upland farming irrigation technology was adopted. Furthermore, alternative water sources had to be offered in areas where irrigation water was polluted and could not be improved. As such, the effective utilization of agricultural water became an issue of increasing importance.
On the other hand, industry and commerce also faced the pressure of global competition, with the demand for industrial water and stable water supply increasing and public demand for water consumption and quality not far behind. However, due to the difficulty of developing new water sources in Taiwan, there was increasing pressure to divert agricultural-use water. Accordingly, how to release surplus water to meet other water demands without undermining agricultural operations, farmers' rights and interests, and ecological environment protection etc. became important issues faced by future irrigation work.