One of the terrible truths of the 20th century is that it was a blight on small farmers or peasants everywhere. Before looking at the question of whether Asia’s farmers need protection, it is necessary to consider this historical background.
In both wealthy capitalist economies and in socialist countries, farmers paid a heavy price. Asian industrialization also was carried out largely on the backs of the rural population as farm policies were manipulated to favor the needs of industry.
In advanced capitalist countries like the United States, a deadly combination of economies of scale, capital-intensive technology and the market led to large corporations cornering agricultural production and processing, thus reducing small and medium farms to a marginal role in production and a minuscule portion of the work force.
While the big-business-biased dynamics of the market in capitalist societies eliminated farmers as a class, they were eliminated by state repression in the Soviet Union, which took to heart Karl Marx’s snide remarks about the ’idiocy of rural life,’ and transformed them into workers on collective farms. Expropriation of the peasants’ surplus production was meant not only to feed the cities but also to serve as the source of the so-called ’primitive accumulation’ of capital for industrialization.
In Asia, government policies placed the burden of industrialization on the peasantry during the phase of so-called ’developmentalist’ industry-first policies. In Taiwan and South Korea, land reform first triggered prosperity in the countryside in the 1950’s, stimulating industrialization. But with the shift to export-led industrialization in 1965, there was demand for low-wage industrial labor, so government policies deliberately depressed prices of agricultural goods. In this way, peasants subsidized the emergence of ’Newly Industrializing Economies.’ Peasant incomes declined relative to urban incomes, and the resulting stagnation of a once vibrant countryside led to massive migration to the cities and a steady supply of cheap labor for factories; this left farmers poor, aging, and an increasingly small part of the national work force.
In the Philippines and Thailand, industry-first strategies led to similar policies. In Thailand, for instance, a tax on rice exports insulated the domestic market from price movements in the international market, depressing the price of rice and reducing the wage costs of non-agricultural employers. A transfer of real wealth from the countryside to the city took place every year between 1962 and 1981, except for 1970. Not surprisingly, despite the image of Thailand as an agricultural superpower, a large percentage of the rural population remains poor. Read