Thu, Feb 16, 2012 - Page 2 News List

Farmers pensions syetm may hurt production: study

By Lee I-chia  /  Staff Reporter

The current insurance and welfare pension regime for elderly farmers could undermine agricultural productivity and development of the sector, researchers told the National Science Council yesterday.

Funded by the council’s Department of Humanities and Social Sciences, Chang Hung-hao (張宏浩), an associate professor at National Taiwan University’s department of agronomy, studied the impact of the farmers’ insurance and elderly farmers’ welfare pension on farming households.

“Raising elderly farmers’ monthly payments from the welfare pension has always been a political issue during presidential elections in past years,” Chang said. “However, what impact the welfare pension has on the productivity structure or welfare of farm households is seldom investigated.”

Using the latest national statistical data on the agriculture, forestry, fishing and livestock industries from 2005 released by the Directorate-General of Budget, Accounting and Statistics, Chang looked into how the insurance policy affects land use and labor time of farming households, whether the welfare pension affects the inheritance of farmland and how different social insurance policies for the elderly affect the behavior of retired farmers.

According to the data from 2005, the nation had 703,278 farming households, while the average age of a farmer was 62, Chang said, adding that compared with Western nations, Taiwan’s agricultural labor structure showed a serious aging problem.

His research showed that farmers on the insurance policy regime tended to increase the amount of time they spent farming and the size of farm land they tilled, which shows an unwillingness to allow land to go fallow.

In addition, farmers on the welfare pension were less willing to hand over their farmland to younger generations, Chang said, adding that compared with other social insurance policies, farmers on the insurance plan showed a higher level of willingness to continue working after the retirement age of 65.

Chang said the current farmers’ insurance policy requires farmers to own a certain amount of land and to work the land over a certain period of time each year, to remain qualified to receive insurance, however the qualification requirement may cause a decrease in productivity by aging farmers and rigid farmland ownership.

Farmers’ insurance policies in some European countries include a requirement to relinquish land ownership upon retirement to receive monthly welfare payments, Chang said, adding that instead of only providing cash through the current mechanism, the government could think about providing additional incentives for elderly farmers to transfer farmland rights to younger farmers.

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