***(This is a brief review I wrote for my professor. The Taiwanese economic turnaround was a real miracle. They went from 700% inflation to 8% in just a few years)***
After the KMT government took control of Taiwan, it sought to implement the 1930 Land Law. Chen Cheng, Land Reform in China 21 (China Publishing Company 1961). However, the Land Law only contained general principles of land reform. Id. Therefore, beginning in 1949, the KMT government promulgated a number of regulations, which aimed to implement Sun Yat Sen’s vision of land regulation Id. at 22.
The first regulation was the “Regulations Governing the Lease of Private Farm Lands in the Taiwan Province.” Id. This regulation had three essential goals, reducing rental rates, protecting the tenant’s rights, and clarifying the landlord’s rights and remedies. Id. The regulation provided that the rents the tenant had to pay to the landlord could not exceed 37.5% of the total annual yield of principle crop. Id. at 23. Before the regulations, only about one in ten tenants had written contracts with their landlords. Id. at 10. Without a written contract, the landlord would often raise rental rates or break their lease at will. Id. Thus, the regulations aimed to stem this problem my requiring that all contracts were to be in writing and no shorter that six years. Id. at 23. Finally, the regulations clarified the landlord’s rights and remedies by providing that rents were to be paid on time and contracts which were in arrears for two years could be canceled. Id.
The second wave of land regulation came in 1951 when the KMT government started selling public lands to tenant farmers. Peter Chen-main Wang, A Bastion Created, A Regime Reformed, An Economy Reengineered, 1949-1970, in Taiwan: a new history 320, 324 (Murray A. Rubinstein ed., M.E. Sharpe 2007). This public land was land acquired by the government from the Japanese nationals and Japanese administration after the conclusion of World War II. Id. During this period, the KMT sold nearly a fifty of the arable land in Taiwan to landless tenant-farmers. Id.
This policy paved the way for the implementation of the Land-to-the-Tiller Act which was promulgated in 1953. Chen at 71. The act’s goal was to abolish land tenancy by limiting the amount of land a landlord could own. To that end, the act required that the government purchase all tenant-cultivated land in excess of a prescribed retention limit. Id. The government purchased land was then “resold to Taiwanese tillers at a price of 2.5 times the value of the main crops.” Wang at 324.
These policies had a tremendous effect in Taiwan. From 1949 to 1952, number of tenant families dropped from 39 percent to 11 percent and average income of the tenant farmer rose 81 percent. Id. at 325.