Agriculture subsidies belong to the farmers

By Warren Kuo 郭華仁  / 

Sat, Aug 08, 2009 - Page 8

Council of Agriculture Chairman Chen Wu-hsiung (陳武雄) said last month that the Agricultural Development Act (農業發展條例) was a contradictory piece of legislation because it would be detrimental to long-term agricultural development.

Since it is not easy to amend the act, the council has instead proposed that a Rural Revitalization Act (RRA, 農村再生條例) provide a NT$200 billion (US$6.1 billion) budget over 10 years for improving rural facilities.

Premier Liu Chao-shiuan (劉兆玄) has said the RRA could be beneficial to not only 4,000 farming and fishing villages and 600,000 farming and fishing households across the nation, but also to rural development.

This cosmetic proposal, however, has received scathing criticism from all sectors of society and failed to pass a final legislative review. Yet the government continues to promote the bill, thinking that agriculture will flourish as long as farming villages are cleaned up and renovated. High-level government officials are thus seeking to convene an extraordinary legislative session in an attempt to have it passed.

Passing the RRA would be ludicrous. Even if the government spent money on renovating rural areas, things would return to their current state within a few years if farmers cannot afford maintenance.

Were the government instead to develop a policy that raises the income of farmers, their living standards would improve and they would be able to beautify their environment on their own. This is the right way to go about the process. One wonders if top government officials lack common sense or if they are merely feigning stupidity.

Rural incomes have been meager and unstable, and this is the result of inappropriate policies over an extensive period. Imbalances between the production and marketing of fruit and vegetables have caused farmers to incur great losses.

The problem lies in the overproduction of vegetables and fruit, which can be stored for a limited period only, and this state of affairs can be attributed to historical factors. In the past, because the government imported grains to replace domestic produce, farmers began to grow fruit and vegetables. After Taiwan joined the WTO and the guaranteed purchase program was scaled back, the domestic fallow area has increased. As a result, farmers cannot be guaranteed a basic income from farming even as the government continues to import large quantities of flour and grains, leading to a low self-sufficiency rate.

Farmers should be guaranteed sufficient income by growing grains under WTO regulations. The EU’s environmental subsidy program is the best example of how this could work. The program requires that farmers manage farmland in accordance with environmentally friendly agricultural practices in order to receive subsidies. In such a system, the government does not need to intervene by setting market prices for agricultural products, while farmers still receive subsidies.

An environmental subsidy program would ensure good quality food and protect the environment, while farmers would be guaranteed a stable source of income.

However, it would require a large budget to implement this program. The government should immediately publicize all of its budget items; any item irrelevant of or detrimental to agricultural development should be scrapped and pooled into that program. Only then could the agricultural predicament facing Taiwan be solved and will taxpayers be willing to pay these taxes.

The RRA budget of NT$200 billion should be used to this end so that farmers, not landscaping companies, will receive government subsidies.

Warren Kuo is a professor at National Taiwan University’s Department of Agronomy.