Under the service trade agreement signed with China last month, Taiwan would open up service sectors such as agricultural product processing and storage, and set up free economic zones in the hope of attracting overseas investment.
Agricultural officials keep telling farmers to be less conservative and more open-minded, but has the government given farmers a level playing field and taught them how to face these new trade challenges?
The big problem for Taiwan’s farming is in the low prices of agricultural products. Successive governments have held prices down out of concern for national food security, commodity price stability and industrial and commercial development. As such, prices are not decided by the market and farmers’ incomes have been consistently lower than the national average.
With incomes not matching effort, many farmers have left the countryside. This impedes new knowledge and new techniques, making farming less efficient or able to meet new challenges.
Past governments imposed various restrictions on the purchase and sale of farmland, leaving each farming household with an average of only about 1.1 hectares of land. Farmers can hardly compete with large-scale farming as practiced overseas. Also key to maintaining stable production and marketing is authorities having a firm grasp of the actual production situation. Yet they are unable to grasp the nation’s basic agricultural data, let alone plan production or establish early-warning mechanisms.
Lacking information, farmers make decisions based on current product prices and on what they see their neighbors planting. The inability to make rational predictions, means imbalances between production and sales occur almost every year, while many farmers live in hardship.
Under such circumstances, how can Taiwan open up its agriculture to compete with better-prepared countries?
Logistics is a very important link in the farm product supply chain, involving the processing, packing, storage and transport of agricultural products all the way up to consumers. In line with the “smiling curve” theory of added value, the supply of seeds and saplings at one end of the agricultural supply chain and branding and services at the other, are important for adding value to products and making the sector more competitive. They generate much greater profits than those earned by frontline farmers engaged in production.
Research shows only about 24 percent of the consumer purchase price of products goes into farmers’ or fishermen’s pockets, while 75 percent goes to the downstream stages of processing, transport, marketing, sales, hospitality and tourism, and to the upstream stage of agricultural inputs.
Therefore, helping farmers on the front line obtain a share of these profits is imperative to increasing their incomes and motivation to stay in the business.
Japan promotes such policies to ensure sustainable agriculture and fisheries industries as it faces the challenges of entering international trade organizations. The policies are centered on producers, encouraging farmers, people in fishing and forestry workers to do their own processing and sales. This can create local business opportunities and new kinds of business, making these sectors more competitive globally.
Yet Taiwan’s government intends to allow overseas companies, especially from China, to engage in agricultural product logistics and related services in Taiwan. In the end, the nation will likely lose its autonomy regarding all stages of agriculture, including production, processing, techniques, and marketing.
Furthermore, China’s agricultural product logistics is beset by many problems. For example, its basic transport and communication infrastructure is weak; most farming is done by small-scale individual household producers; it has insufficient equipment for transport, storage, and loading and unloading of agricultural products; the planning and distribution of farm product markets are irrational; and agricultural technology is not widely applied. All this makes it hard for Taiwan’s farming sector to link up with China’s and free trade will pose even tougher challenges.
Officials and academics often seriously underestimate the value of agriculture simply because it accounts for less than 2 percent of GDP.
In theory, free trade gives every country equal opportunities and rights to pursue its best interests, but the reality is rather different. Large economies manipulate free-trade negotiations to force others to accept their products. In view of this reality, agriculture should not be made entirely dependent on market forces.
There are many challenges ahead for Taiwan. Are we ready to face them?
Du Yu is chief executive officer of the Chen-Li Task Force for Agricultural Reform.
Translated by Eddy Chang
Two sets of economic data released last week by the Directorate-General of Budget, Accounting and Statistics (DGBAS) have drawn mixed reactions from the public: One on the nation’s economic performance in the first quarter of the year and the other on Taiwan’s household wealth distribution in 2021. GDP growth for the first quarter was faster than expected, at 6.51 percent year-on-year, an acceleration from the previous quarter’s 4.93 percent and higher than the agency’s February estimate of 5.92 percent. It was also the highest growth since the second quarter of 2021, when the economy expanded 8.07 percent, DGBAS data showed. The growth
In the intricate ballet of geopolitics, names signify more than mere identification: They embody history, culture and sovereignty. The recent decision by China to refer to Arunachal Pradesh as “Tsang Nan” or South Tibet, and to rename Tibet as “Xizang,” is a strategic move that extends beyond cartography into the realm of diplomatic signaling. This op-ed explores the implications of these actions and India’s potential response. Names are potent symbols in international relations, encapsulating the essence of a nation’s stance on territorial disputes. China’s choice to rename regions within Indian territory is not merely a linguistic exercise, but a symbolic assertion
More than seven months into the armed conflict in Gaza, the International Court of Justice ordered Israel to take “immediate and effective measures” to protect Palestinians in Gaza from the risk of genocide following a case brought by South Africa regarding Israel’s breaches of the 1948 Genocide Convention. The international community, including Amnesty International, called for an immediate ceasefire by all parties to prevent further loss of civilian lives and to ensure access to life-saving aid. Several protests have been organized around the world, including at the University of California Los Angeles (UCLA) and many other universities in the US.
Every day since Oct. 7 last year, the world has watched an unprecedented wave of violence rain down on Israel and the occupied Palestinian Territories — more than 200 days of constant suffering and death in Gaza with just a seven-day pause. Many of us in the American expatriate community in Taiwan have been watching this tragedy unfold in horror. We know we are implicated with every US-made “dumb” bomb dropped on a civilian target and by the diplomatic cover our government gives to the Israeli government, which has only gotten more extreme with such impunity. Meantime, multicultural coalitions of US