Taiwan’s domestic market for agricultural products is limited. Agricultural exports are therefore important to keep prices stable and balance inventories.
The government’s agricultural policies have always been centered around increasing exports, particularly to Southeast Asia. However, many Southeast Asian nations are major producers and exporters of agricultural and fishery products themselves. For instance, Vietnam exports basa fish and prawns; Thailand exports hom mali rice, rambutans and prawns; the Philippines exports bananas, pineapples and milkfish; and Indonesia exports palm oil, rubber, cocoa and tea. As a result, exports of Taiwanese agricultural products to these countries have been limited.
To increase agricultural exports, from the early 2000s, the government has been trying to duplicate the success of New Zealand’s kiwifruit exports by emulating its export model. In New Zealand, all kiwifruit are exported through one company, under the brand Zespri.
However, due to differences in culture, education, production scale, farmers’ organizations and the government’s ability to carry out policies, opinions are divided over whether Taiwanese domestic produce would benefit from the same model. In fact, many Taiwanese agricultural products that sell well abroad — such as moth orchids, green soybeans, mangoes, pineapple cakes and eels — do not follow the Zespri model.
This is particularly true with the eel industry, which has been successful for half a century, despite a number of problems to overcome. Uncertainty over the number of eel elvers available for capture each year is a major challenge — Japanese eel breeding still has not been established on a commercial scale — and the fact that most of its overseas market is in Japan further raises the risks.
Nonetheless, the Taiwanese eel industry was able to achieve long-term success through continual and coordinated efforts to improve. It would be worth the government’s effort to study the eel business model.
Models that have worked for other countries are not necessarily better than domestically developed models. In the past, the government has encouraged Taiwanese entrepreneurs to invest in agricultural and fishery businesses in ASEAN as part of its past southbound policy. That approach was of little help to the development of Taiwanese agriculture, not to mention that it did not provide many domestic job opportunities.
Moreover, Taiwanese business owners and employees are often marginalized in these countries due to salary differences, cultural barriers, management styles and rivalry with local farmers. With no diplomatic ties or free-trade pacts between Taiwan and these countries, it is difficult to ensure that Taiwanese companies receive fair treatment.
Recently, a Formosa Plastics Group subsidiary was fined US$500 million in Vietnam. The incident highlighted the risks involved in the government’s “new southbound policy.” Those who hope to follow that policy and invest in Southeast Asia should undertake due diligence and carefully manage risks before it is too late.
The priority of the “new southbound policy” should be to export agricultural and fishery products — including processed goods — to Southeast Asia. To increase agricultural exports, the government should work on creating a better trade environment for agricultural businesses exporting to Southeast Asia by taking a number of steps.
It should study the regulations on agricultural imports and consumer preferences in the target markets. It should also understand the local competition and alternatives, and engage in trade talks to establish deals that would benefit Taiwanese exports.
It should then set down regulations for exporting goods, covering areas such as quality and safety control, contract farming, factory management and a grading system for exported goods to create a healthy competitive environment for agricultural and fishery product exports. It must allow farmers to freely compete with each other based on their gradings, product advantages and individual market goals to avoid price wars and monopolies.
Taiwanese land and fish farmers have long had to deal with problems inherent in the supply chain system, but the government can transform the system by promoting the application of the Internet of Things (IoT) in the agricultural industry. The technology can change the life of farmers by allowing them more control over production and better access to information. The exchange of agricultural products would take place online rather than through retail or wholesale channels.
This would result in improved efficiency and economic benefits for the industry, while consumers could gain direct access to a wider range of products in a faster and safer manner, farmers would make more profit without the middleman.
In Japan, more than half of all farmers are now using IoT solutions. The US government has built the world’s largest Internet system for the agricultural industry, AgNet, which serves as a powerful basis for the IoT with its rich sources of information. Likewise, Taiwan needs to develop better IoT solutions, which would help alleviate many problems faced in agricultural marketing.
With better IoT technologies and more opportunities in overseas markets, Taiwan’s farmers would have a much better chance of success.
Du Yu is chief executive officer of the Chen-Li Task Force for Agricultural Reform.
Translated by Tu Yu-an
After decades of empty threats, much of the world tunes out when North Korea vows to unleash destruction on its enemies. But in the past few months, some prominent analysts began warning that Kim Jong-un might actually be serious about preparing for war. Now in his 13th year running North Korea, Kim is more aggressively testing the boundaries of what his adversaries will tolerate. Backed by rapid progress in his nation’s nuclear capabilities and missile program, the 40-year-old dictator began this year by removing the goal of peaceful unification from North Korea’s constitution and declaring he had the right to “annihilate”
Last week, it was reported that former president Ma Ying-jeou (馬英九) might be granted an audience with Chinese President Xi Jinping (習近平). If true, Ma would be afforded an opportunity few get. Even US President Joe Biden has met Xi only twice since he assumed office in January 2021, neither meeting occurring in Beijing. It is an invaluable opportunity for the former president of Taiwan to speak directly and candidly with Xi, the “chairman of everything” in China, who sits atop a hierarchical system that has powerful incentives to transmit to the leader only the information that he would like
On Wednesday, an earthquake with a magnitude of 7.2 struck Taiwan. The epicenter was 25km south-southest of Hualien County at a depth of 15.5km. It was the largest earthquake to hit the country in 25 years and triggered tsunami warnings in Japan and the Philippines. The earthquake caused significant damage, and loss of life and injuries, but the extent was relatively controlled. The international community can learn valuable lessons from Taiwan’s efforts in disaster prevention and management. Additionally, the outpouring of international solidarity and support demonstrates that humanity extends beyond national boundaries. Taiwan, situated in a disaster-prone region, has developed a comprehensive
Developing nations around the world are grappling with a choice of allegiance to the US or China on matters of trade, financing and security. Nowhere is that tougher than in Argentina. The South American country’s 276 percent inflation, history of sovereign bond defaults and six recessions over the past decade have made it more financially dependent on Beijing than any of its neighbors in Latin America, where the US has lost ground to China. Eight months ago, Argentine presidential candidate Javier Milei vowed he would curb ties with China if he became Argentina’s leader. “Would you trade with an assassin?” he asked.