Farming policy needs a revamp

By Du Yu 杜宇  / 

Thu, Feb 09, 2012 - Page 8

Following the Jan. 14 presidential election, the government has had a Cabinet reshuffle to bring in new approaches. Newly appointed Council of Agriculture Minister Chen Bao-ji (陳保基) declared that farming is not a sunset industry and he says he has many ideas about where the nation’s agriculture could go from here. Now farmers are waiting to see whether the sector will really undergo a renewal.

The nation’s farming sector has reached a bottleneck and whether it can get back on the broad track will depend on finding the right policy direction.

There are some issues that call for priority solutions.

The first of these is that farming families’ incomes generally tend to be low, so that they depend on supplementary earnings from non-agricultural activities to make ends meet. The pricing system for farm produce is not based entirely on value or determined purely by supply and demand. Farmers’ interests have always been sacrificed for the sake of national security and a stable life for the public as a whole. In future, farm produce prices should be raised to a reasonable extent through market mechanisms and more relaxed policies, so that agricultural production can generate respectable incomes. That is the only way the difficulties faced by farmers can be resolved.

The next point is that relief measures for losses suffered by farmers should be strengthened. The country lies in a high-risk climate zone to begin with, and now, with the additional threat of climate change, conventional agriculture is likely to be hit by even worse natural disasters and suffer even greater losses as time goes by. The risk posed by natural disasters can be reduced through technical innovations, like solar-powered greenhouse facilities, plant factories and so on, but it also needs to be tackled at the institutional level.

The government’s usual response when farms suffer damage is to provide relief through administrative departments. Although the amount of government relief on offer has recently been increased, it is still not nearly enough to cover the real losses suffered by farmers.

Improving protection for farmers by spreading the risk more widely should, therefore, be made a priority.

The government should set up a natural disaster relief system with agricultural insurance as its main theme and backed up by other means of administrative disaster relief. This would be the best policy for promoting Taiwan’s agricultural development, ensuring that farmers make a steady income and bringing about social justice.

The next item is to change farming subsidies. Agricultural subsidies have two main purposes — to protect farmers’ interests and to ensure food security. Despite much talk of trade liberalization, farm subsidies in the US, EU and Japan are not being cut, but increased.

Many countries used to take measures to support agricultural prices, but now it has become common practice to support incomes instead, irrespective of production. However, the nation is still stuck at the stage of price support policy. As a result, while Taiwan spends as much as NT$70 billion to NT$80 billion (US$2.37 billion to US$2.7 billion) a year on agricultural subsidies, farmers’ incomes are still below the national average.

Clearly, it is time to review and reform existing measures, such as subsidies for leaving fields fallow and the state purchasing of rice at guaranteed prices. Academics here keep calling on the government to abolish guaranteed prices for rice purchases and to apply land subsidies instead, saying that this is the only way for farmers to enjoy real benefits.

However, considering the nation’s basic data about agricultural production is rather incomplete, a hurried change to land-based subsidies would probably give rise to even greater disputes, so any such move should be approached with caution.

Another issue is to guarantee that agricultural and fishery products are safe to eat. Although the situation in Taiwan concerning harmful additives and agricultural chemical residues is much better than it used to be, substandard foods still often slip through the net. There is still plenty of room for improvement when it comes to pre-sale or pre-export checks on food.

Besides that, to get to the root of the problem one has to proceed right from the start of the farm and livestock product supply chain, which is the point of production down on the farm. It should be recognized that production, not testing, is the starting point for safe agricultural and livestock products. Making Taiwan a center for safe agricultural and fishery products should be a key point in future agricultural policy.

Finally, agricultural policy departments should set up a comprehensive production, sale and supply chain for agricultural products as soon as possible, so as to cut costs and reduce exploitation by middlemen. Good use should be made of new forms of marketing like home delivery and group sales via mobile phone and the Internet.

Farmers can be given guidance on how to use production and marketing teams to grade their own products, set reasonable prices for them, package them and then sell them online or auction them through marketing and distribution companies. Giving farmers access to more varied and comprehensive sales channels and to information such as market prices would allow them to make a reasonable income from their hard work out in the fields.

As to questions of how to put life back into the land and stop the misuse of farmland for other purposes, these also call for overall planning and should not be tackled in a haphazard manner.

Du Yu is chief executive officer of the Chen-Li Task Force for Agricultural Reform.

Translated by Julian Clegg