[17]. Note that there had been no trend toward increasing crop area for marginal crops in general before 1949. See DAF, Yearbook 1950, sec. 3. 4. B. The crucial evidence here, however, is that the crop area for marginal crops had increased relatively more than that for intramarginal crops under the share restriction. The three-year annual averages (1949-51) of the crop area for marginal crops used hereafter are less dramatic than two-year annual averages (1950-51), since the share restriction began in mid-1949. See table 3 for annual changes.
[18]. A "t" test was run on the observations of hectare yields before and after the share restriction for all marginal crops in tables 6 and 7. The statistics computed were the standardized mean difference of the twenty-one paired observations. The null hypothesis, that there was no systematic and significant difference between the before and after hectare yields, was rejected at the a = .01 level of significance. The hectare yields for the marginal crops under the share restriction were significantly lower, as is implied by the hypothesis of increased farming intensity.
[19]. Note that for items 16 to 20 (table 7), the decreases in crop area were associated with decreases in crop hectare yield. This is not difficult to understand. The exhaustion of better land and time and the higher cost of planting generated by a faster rotation rate combined to inflict "harmful" spillovers on crops of the same seasonal margin.
[20]. Information on the growing time required for most vegetables is usually in ambiguous terms such as "two to three months." That is why we cite here only the extreme cases for which the demarcation of growing time is clear.
[21]. See S. C. Hsieh and T. H. Lee, "The Effects of Population Pressure and Seasonal Labor Surplus on the Pattern and Intensity of Agriculture in Taiwan," (mimeographed, 1964), p. 5. A complete list of labor requirements for each vegetable is not available.
D.Crops Unaffected by the Share Restriction: Horticulture
The method I have employed to cope with the lack of separate output data for tenant and owner farms is to rank the prefectures according to the magnitudes of land resources affected by the control. The conclusions stemming from this method may be confirmed further by investigating a class of crops not included under the share restriction. We find this in horticultural crops:
Horticultural crops grow on dry land, but they differ significantly from other crops grown on dry land. They take several years of cultivation before the fruits can be harvested… , that is why the rules of rental share restriction could not apply to them.… Our decision for tenancy in horticultural crops was to leave the contracts as they had been.…[1]
As shown in table 3, the harvested area for horticultural crops declined. In table 8, we list all the horticultural crops on record. Of the twenty-three crops listed, the plant yield for all but four crops decreased.[2] Both observations may be interpreted as follows: Under the share restriction imposed on other crops and the corresponding reallocation of resources, farming inputs committed to horticulture declined. Some plants which had previously been harvested at the margin were now not harvested at all, which led to the decrease in the area harvested. By the same reasoning, the lower inputs committed to tree-climbing and annual upkeep of the plants led to the decrease in plant yield for the plants actually harvested.
For the marginal crops discussed in the last section, the increase in crop area associated with a smaller proportionate decrease in crop hectare yield implies a rise in the marginal product of land and a decrease in the marginal product of tenant input. In horticulture, however, the decrease in the land area harvested implies that the marginal product of land decreased (i.e., shifted downward). This, together with the decrease in plant yield, implies that nonland resource inputs declined, confirming rises in the marginal products of these inputs. Thus, the observations are consistent with the implication that the marginal product of land in horticulture was lower than that of other crops under the share restriction, and that the marginal products of farming resources other than land were lower in these other crops than in horticulture.
[1]. Chen, Records of Taiwan Land Reform, p. 37. Perhaps the fact that tenancy seldom exists in horticulture was the main reason Chen made this decision. I simply fail to see why the rules could not apply.
[2]. Apparently, the number of plants per hectare is not fixed, but we lack information on the yield per hectare. A "t" test was run on the observations of plant yields before and after the share restriction, by using the standardized mean difference of the twenty-three paired observations in table 8. The null hypothesis, that there was no systematic and significant difference between the before and after plant yields, was rejected at the a = .01 level of significance. The plant yields for horticulture under the share restriction were significantly lower.
E.Conclusions
Observable evidence obtained from the first phase of Taiwan land reform fails to falsify the implications of the hypothesis of increased farming intensity. These implications, derived from the theory of share tenancy with the added share constraint, are inconsistent with efficient allocation of resources. My findings confirm that under the rental share reduction the marginal product of land in tenant farms was higher, and the marginal products of tenant inputs were lower, than those of similar resources employed elsewhere. Combining the findings of chapters 7 and 8, let me summarize:
