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COA must revamp its plans for vegetables

VEGETABLE PRICES soared once again during the typhoon season last year and the media reported that the price of cabbage had reached NT$300 apiece. Recently, however, vegetable prices have dropped sharply, with the price of cabbage dropping to NT$2 per kilogram. A standard cabbage weighs about 2kg to 3kg.

Authorities in charge of agriculture have been criticized for the drastic price fluctuations. Elected representatives complain loudly -- regardless of whether prices go up or down -- and the media has exacerbated the matter with their reporting.

In the end, however, it is the nation's disadvantaged farmers who suffer most.

Vegetable prices often rise before a typhoon arrives, mostly over consumer fears. Legislators who claim to have the consumers' interests at heart then express their discontent, sometimes even bringing vegetables to the legislative floor to make a point.

The media, meanwhile, assist those legislators by providing extensive coverage.

All these antics confirm the fears and expectations of consumers, who rush out and hoard vegetables.

Seeing all this, farmers on the supply side abandon other produce and focus on growing the types of vegetables that are expected to remain highly priced as a result of consumer behavior, hoping to make a profit in the process.

After they harvest their vegetables a few months later, supply has increased sharply while demand remains unchanged. Even people with only the most basic economic knowledge know that prices will inevitably drop.

When the price of vegetables goes up, elected representatives in urban areas -- especially in northern Taiwan -- become apprehensive, as their supporters -- vegetable consumers all -- grumble about high costs.

The representatives then pressure agricultural authorities, followed by plans from the Council of Agriculture to import vegetables to stabilize prices.

Elected representatives in agricultural areas, meanwhile, hold their silence and the agricultural authorities do nothing to warn farmers from rushing to plant vegetables. Anyone warning that prices might fall will be criticized for not supporting the agricultural sector.

As a result, prices drop because there are no controls on excessive planting of vegetables. By this point, representatives in agricultural areas come forward and criticize the government for ignoring farmers' rights -- or even repressing them -- but that criticism always comes too late to resolve the problem.

The solution lies in education and economics awareness.

First of all, natural disasters will inevitably cause vegetable prices to go up. The priority in this phase is to increase supply and stabilize demand, which can be achieved by agricultural authorities helping farmers to quickly repair damaged equipment and importing vegetables based on market demand.

For their part, consumers should avoid buying overpriced vegetables. Representatives should stay away and even if they do intervene, the public should ignore them. The authorities should repeatedly urge farmers not to rush to plant vegetables, as prices are likely to collapse a few weeks hence.

The council should remain aware at all times of the overall supply situation so that it can issue warnings as soon as excessive planting occurs.

In a word, agricultural authorities should take measures to facilitate the monitoring of supply and demand rather than wait until prices collapse, only to encourage people to buy to bring the prices back up.

James Ho is an associate professor in the Department of International Business at National Taipei College of Business.

Translated by Eddy Chang
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