The government will outline the key points of its plan to reform the grassroots financial sector at a two-day national agricultural conference which starts tomorrow.
The Cabinet said that it will not make concessions on key points in negotiations with farmers and has no plans to return control of 36 credit units to the grassroots farmers' associations after spending NT$90 billion of its financial reconstruction fund to clean up the units' bad loans.
The two-day meeting will take place at the Taipei International Convention Center one week after local farmers held a protest demonstration against the government's move to clean up the credit units of farmers' and fishermen's associations.
Non-performing loans at the credit units of these associations totalled NT$137 billion as of June this year, according to official government data.
The meeting will invite 200 participants from government, the associations as well as academic and banking circles to discuss methods to reduce the non-performing loans.
Minister-without-Portfolio Hu Sheng-cheng (胡勝正), tasked with chairing the meeting, told lawmakers on Wednesday that the Cabinet will stick to its plan to form a national agricultural bank.
The bank, set up by the Cabinet and farmers' and fishermen's associations, will act as a headquarters for the associations' credit units eventually to take over the operations of these credit units and release loans to farmers.
"The agriculture bank will be under the jurisdiction of the Council of Agriculture but will be supervised by the [proposed] financial supervisory board, which will be formed and presided over by the Minister of Finance," Hu said.
The move was designed to address charges that the COA has no financial talent to supervise the operation of an agricultural bank, he added.
The government has also stated that its stake in the proposed agricultural bank will not exceed 49 percent.
In addition, the Cabinet will add a third senior management position to each farmers' or fishermen's association, separating out control of their credit units from the main association body.
Currently, each farmers' or fishermen's association has only a chairman and secretary-general at the helm.
"The general manager will be in charge of the financial businesses and the secretary-general will be responsible for promoting agricultural affairs," Hu said.