The Cabinet-level Council of Agriculture yesterday officially kick-started its finance division's operation, which is charged with overseeing the sector's financial affairs, including the proposed national agricultural bank.
Lai Wu-chi (賴武吉), 60, formerly an advisor to the nation's central bank, was appointed to head the council's agricultural finance bureau, said Council Chairman Lee Chin-lung (李金龍) at a press conference yesterday morning.
Lai outperformed the other candidate recommended by the Ministry of Finance and won approval from the Cabinet to head the newly-established finance bureau, Lee said.
The government had said it wants consolidation among the more than 50 banks and 300 credit cooperatives and farmer's and fisherman's associations to improve their efficiency and lower their number of non-performing loans.
At the bureau's launching ceremony yesterday, Lai said that he will make efforts to help improve the health of the grassroots financial sector in light of an economic recovery.
"Agricultural finance has its uniqueness, which the new bureau will address while supervising credit cooperatives of the nation's farmers' and fishermen's associations," Lai said.
Although the grassroots financial sector had a bad-loan ratio of 18 percent as of November, Lai yesterday expressed confidence that the sector's performance may quickly improve following a possible economic recovery.
"The worst is over," he said, refusing to set a goal for the sector to lower its ratio of non-performing loans.
But Lee told reporters that his council is short of talent regarding financial supervision, and has to turn to the Ministry of Finance and the Central Bank of China for help.
The bureau currently employs 50 finance experts and may recruit another 20 staff members in the near future.
In addition to financial supervision, Hsu Chen-ming (許振明), an economics professor at National Taiwan University, yesterday urged the bureau to establish a national agro-bank as soon as possible to address farmer's and fishermen's financial needs as well as the sector's credit crunch.
"Credit-backed loans should be granted to help upgrade the agricultural sector, which is negatively impacted by the nation's entry to WTO," Hsu said.
According to the Agricultural Financial Law (農業金融法), passed last July, the government will subsidize 49 percent of the agricultural bank's capital while the remaining 51 percent of capital will be funded by the private sector.
The agro-bank's establishment was viewed as a "compromise" aimed at satisfying requests made by the grassroots financial sector during the tug of war between the government and the farmers' and fishermen's associations, after 36 credit cooperatives burdened by bad loans were taken over by the government in 2001, analysts said.
Based on the council's plan, the proposed national agricultural bank is expected to be established sometime during the second half of the year, Lee said yestereday.
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