Since President Tsai Ing-wen’s (蔡英文) inauguration, which put her Democratic Progressive Party (DPP) in charge of the executive branch of government as well as the legislature, relations across the Taiwan Strait have entered a period of cool observation — and farmers and fishermen whose biggest export market is China are understandably anxious.
They hope that Tsai’s government can handle relations so that there is no negative impact on their livelihoods. Former president Ma Ying-jeou (馬英九) was criticized for an overreliance on the Chinese market, and recently some people have said that the nation’s agricultural products are superior and there is no need to depend on China.
However, this is based on generalizations and risks “throwing the baby out with the bathwater.” Such suggestions do not present the best options for Taiwan’s agriculture. What the nation needs is a pragmatic approach to cross-strait agricultural trade.
Whether Taiwanese like China or not, the reality is that China has overtaken Japan to become the most important market for Taiwan’s agricultural exports, and indeed it is the world’s largest importer of agricultural goods. Given China’s importance, we cannot pretend that it is not there.
To protect Taiwan’s agriculture from overconcentration on the Chinese market, which would mean putting all our eggs in one basket, the Tsai administration is justified in wanting to diversify export markets.
However, we need to recognize that Taiwanese agricultural products are of variable quality. From time to time there are reports about unacceptable chemical residue found in some products. Not all of the agricultural products are high-grade, and not all comply with other nations’ strict regulations on food safety, anti-pest inspections or product specifications.
Given these shortcomings, opening up new markets is not something that can be achieved in the short term — it would require comprehensive planning and complementary measures.
South Korean businesses that want to reduce their reliance on the Chinese market are adopting a “China plus one” strategy by strengthening their links with Vietnam and other Southeast Asian countries. The Japanese government clearly distinguishes between areas of cooperation and competition.
However, the Tsai administration has not proposed any specific measures for moving out of China’s orbit. In the absence of any clear policy it is no wonder farmers are anxious.
Over the years, as cross-strait relations became friendlier, most important Taiwanese agricultural products — especially fruit — have come to be grown in China too, and while they might not be equal to Taiwanese produce in terms of quality, they are much cheaper.
Given that China grows much of the same produce as Taiwan, a ban on Taiwanese products entering the Chinese market would not have much of an impact on Chinese consumers, but it would have an immediate impact on the livelihood of Taiwanese farmers.
With this in mind, we should first think about how to stabilize cross-strait trade in agricultural products. When that is done, we can gradually work on developing markets in other countries.
In the past, when political considerations took precedence over economic factors, cross-strait trade in agricultural products became divorced from market mechanisms, and this artificial trade has resulted in today’s stagnant market for farmed fish such as grouper, milkfish and Taiwan tilapia.
In the long term, cross-strait trade in agriculture should still be encouraged, but it should return to a supply and demand market mechanism. There is no need for one side to concede profits to the other, nor is there any need to impose limits on Taiwanese agricultural products, which might alienate farmers for no good reason.
Although some Taiwanese agricultural products, such as green soybeans, orchids, pineapples and mangoes, are a cut above those grown in China, it would be unwise to exaggerate Taiwan’s research abilities in agricultural science.
The capacity of Taiwan’s experimental and research establishments to innovate and make new developments, limited as it is by personnel and systemic factors, as well as matters of intellectual property rights and technical transfer fees, cannot compare with the way it used to be.
With the help of foreign investors, the production technology and operating efficiency of China’s agriculture and fisheries has been gradually closing the gap with Taiwan, and for some products China’s quality is even better than Taiwan’s — tiger groupers and abalone are clear examples.
Most Chinese agricultural and fisheries export products now comply with international food safety regulations. This shows that China has made considerable progress in ensuring the safety of its edible farm products, and that its agricultural and fisheries science and technology are not far inferior to Taiwan’s.
Taiwanese businesses, government and academia all need to have a sense of urgency. As well as allowing product varieties, technology and equipment that emerge from the hard research and development work of state-run scientific research establishments to be quickly transferred for use by farmers, it is still more important to continually pursue technical advances and help make agricultural producers more competitive. By so doing, Taiwan can avoid playing out the fable of the tortoise and the hare.
Lee Wu-chung is a professor of agricultural economics.
Translated by Julian Clegg
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