Agriculture should be supported

By Du Yu 杜宇  / 

Tue, Feb 26, 2013 - Page 8

Agriculture has once again become front-page material in local media. Whether to deregulate the import of US pork and Chinese agricultural products has touched a sore spot among local farmers. Protests are likely to increase.

If the government continues to avoid answering questions posed by farmers’ organizations, it will create mistrust toward the government among farmers, and rational debate and the reaching of a common understanding is unlikely.

In the end, all Taiwanese will suffer from this zero-sum game.

Many of the current controversies have not addressed the core problem — how Taiwanese agriculture should adapt to trade liberalization.

Agriculture is a productive sector of the economy and a living eco-industry, and even economically advanced countries such as the US, Japan and EU member states are careful not to neglect its importance and aim to protect it.

Although cultivators of high-quality fruit, orchids, tea and mariculture products can earn approximatley the same as the average national income, most other cultivators, such as rice, grains, vegetables and freshwater aquaculture, have to rely on income sources outside of agriculture and government subsidies to make ends meet.

Studies have shown that the signing of free-trade agreements impact on domestic agriculture, especially in smaller countries.

Once domestic agricultural markets have been deregulated as part of international trade agreements, there are varying impacts on different domestic industries. Therefore the government should first carry out evaluations so it can provide appropriate complementary measures and not give up its bottom line of defense.

The question of how to develop the agricultural sector in the face of trade liberalization and deregulation is a serious issue that the government must face.

The impact of deregulating agricultural imports will vary depending on agricultural management differences, and the government must prepare a varied set of response measures.

Farmers that use organic and natural agricultural methods can rely on market differentiation to minimize the impact since they are directly targeting specific consumer groups.

The problem is that the products a majority of farmers rely on command low prices and low profits, because they lack any clear advantage over others.

These farmers also frequently incur losses due to imbalances in supply and demand, and will be the ones who suffer most from the deregulation of cheap foreign agricultural imports.

One solution would be to encourage farmers to produce products without fertilizer residues, that have low-mileage, local flavors and strict labeling. In addition, education to strengthen consumer understanding of and preferences for local products would also boost local farmers. Examples of these tactics can be seen in South Korea and Japan.

“Senary [sixth-level] industry” integration — a Japanese concept for integrating the primary production industry with the secondary processing industry and the tertiary service industry (1 + 2 + 3 = 6), could also be employed to increase the added value of agricultural products, improve product competitiveness and raise farmers’ profits so they can compete with foreign producers in diversity and price. This would stabilize the domestic market and help local farmers gain a foothold in the international market.

Apart from passive defense, the limited absorption rate in the domestic market for agricultural products and the reliance on the international market to adjust supply and demand, and price stability, should also be considered.

After consolidating the domestic market, localized agriculture should be used to promote “customized” agriculture directed at global consumers and make sure that agricultural products are top quality by using special production zones to allow product selection and breeding, special feed and fertilizer mixtures, pest extermination, long-term regulation, post-harvest management, strict food safety controls and specialized storage and transportation techniques to satisfy the particular preferences of consumers in different countries and regions.

The government should then help obtain international agricultural quality and safety certifications to gain a successful foothold in international markets.

Since there is a group of technologically capable domestic farmers, a smooth response to the trade liberalization could be achieved, relying on the uniqueness and superior quality of their products to reach the top global consumer segment, turning the nation’s agricultural products into trendy foods.

If these steps are taken, there would no longer be cause to fear deregulation of the domestic agricultural market. Instead, trade in agricultural products could be changed from a stumbling block to a strong bargaining chip.

Only by changing our thinking can we stop the nation’s agriculture from wasting away.

Du Yu is a member of the Chen-Li task force for Agricultural Reform.

Translated by Perry Svensson