EMPIRICAL INVESTIGATION OF THE RICE PRODUCTION STRUCTURE IN TAIWAN, 1976‐93

N the early period of Taiwan's economic development, in particular during the 1950s and 1960s, rice production increased rapidly, not only meeting the needs of domestic food consumption but also providing a surplus for export. However, since around the mid-1970s, Taiwan's agriculture has witnessed a gen- eral decrease in the production of rice which fell from a peak of 2.71 million metric tons (in terms of brown rice) in 1976 to 1.82 million metric tons in 1993, corre- sponding to a 33 per cent reduction during the seventeen-year period. Needless to say, the total production is a product of the total planted area and the yield per unit of land. How did these two factors change in the course of rice production in Tai- wan? To begin with, the total planted area for rice production has shown a strong downward trend. It decreased drastically from 790,248 hectares in 1975 to 391,457 hectares in 1993, corresponding to a 50 per cent reduction during the eighteen-year period. There are two main reasons for such a decrease in the rice production: (1) a switch in 1977 from a policy of unlimited purchases to one that limited purchases by the government; and (2) the paddy field diversion program launched in 1984. On the other hand, however, there has been a significant increase in the yield per hectare from 3,450 kilograms in 1976 to 4,655 kilograms in 1993 (in terms of brown rice), corresponding to almost a 35 per cent increase during the seventeen- year period, and implying a compound annual growth rate of 1.8 per cent which is fairly high on an international standard (see Hayami 1995, p. 101). The higher