Change to farm construction law could be risky

A proposal by KMT lawmakers to revise the Agricultural Development Act and allow single-housing construction on farmland may not provide the financial windfall predicted, an analyst said yesterday at a public hearing.

It may not help farmers' associations market their land or aid big business, instead the move could reveal hidden financial problems with farmland that is being used as collateral.

"It looks as if farmland will be much more marketable if buyers do not have to be professional farmers and houses can be built on each piece of newly purchased farmland," said Lin Chung-cheng (林忠正), an economist and DPP legislator.

"But when hundreds of farmers' associations nationwide are dumping land used for collateral at the same time, an oversupply of land will only lower land prices and make things worse."

Lin was speaking at a forum held yesterday by the DPP at a public hearing on agricultural policy at the Legislative Yuan.

The hearing comes hot on the heels of a controversial proposed amendment to the law, which is waiting to be reviewed by the legislature. The Council of Agriculture had proposed liberalizing the market by allowing non-professional farmers to buy farmland.

But advocates said newly purchased farmland should be used to build housing estates or collections of houses, and not a single house on every parcel of land.

KMT legislators, however, are trying to push a different version through the legislature.

Yesterday the KMT pushed forward a revised proposal to allow individual farmhouses be built on agricultural land.

While the revised bill was rejected by KMT caucus leader Tseng Yung-chuan (曾永權), the party leader said another proposal would be made next week.

Because the KMT enjoys a comfortable majority in the Legislature, it is likely that it will be able to finesse an amendment through sooner or later.

Farmers' associations accumulate a large amount of land used as collateral because their credit cooperatives extend loans to farmers against their farmland.

When borrowers fail to pay back their loans, farmers' associations are supposed to sell the collateral, which is often difficult to do, as it is stipulated by current law that only professional farmers are qualified to buy farmland.

"The government doesn't dare demand farmers' associations clear their bad debt because there is no possible solution under current laws and regulations," Lin said.

"But when there is a possible way out, such as making land marketable, those associations will find themselves in an even more difficult position."

Critics also said that allowing houses to be built on newly purchased farmland would deplete farmland, as big business groups will buy up farmland and develop them into small pieces of land built with villas to be sold to people seeking a house as a second home instead of farming the land.

Some disagree, saying that allowing construction of farmhouses on each plot of land would create more incentives for buyers.

"If the farmland market is liberalized without tightening current restrictions on farmhouse construction, farmers' associations will be in a better situation to deal with land used as collateral and bad debt," said Lien Ta-yen (3s1F彥), an official at the Farmers' Association in Yunlin.

COA chairman, Peng Tso-kwei (彭作奎), offered his resignation Wednesday in defense of farmland being transferred for other use, on the assumption that President Lee Teng-hui (李登輝) had agreed to more liberal farmhouse building.