Premier Yu Shyi-kun said yesterday that the government has no plans to phase out farmers' and fishermen's associations as reported by Chinese-language news media.
"Media reports that the Cabinet is planning to eliminate all farmers' associations are not correct," Yu said in response to a press query about the government's stance on handling financial problems of some of the nation's farmers' and fishermen's associations.
Yu said the Ministry of Finance will help the credit departments of domestic farmers' and fishermen's associations transform themselves into regional banks or integrate themselves into a national farmers' bank.
Noting that the overdue loan ratio of the credit departments of some farmers' associations has reached 25 percent, Yu said the government must tackle the problem.
"The abnormally high bad loan ratio indicates that some farmers' associations need to streamline their operations and enhance their supervisory mechanisms to rein in their lending activities," Yu said.
In the past few years, the finance ministry has taken over some farmers associations' poorly managed and cash-strapped credit departments. Earlier this month, the ministry served a notice to farmers' and fishermen's associations around the island restricting them from extending new loans or from setting up new branches if their overdue loan ratios exceed 10 percent.
The new restrictions sparked speculation that the government would wipe out all grassroots farmers' and fishermen's associations. The opposition parties have voiced support for continued operations of these grassroots organizations. Farmers' and fishermen's associations have formed a self-help alliance in an attempt to ensure their survival.
Despite protests from the grassroots associations, both President Chen Shui-bian (
Pai Tien-chih, president of the newly formed self-help alliance, said at a recent seminar on the future of farmers' and fishermen's associations that their credit departments have jointly accounted for 47.92 percent of total bank loans to the agricultural and fishery sector.
"The amount is roughly equal to that offered by the three state-owned banks appointed to offer loans to the agricultural sector -- the Farmers Bank of China, the Land Bank of Taiwan and the Taiwan Cooperative Bank," Pai said.
"This indicates that the credit departments of farmers' and fishermen's associations have played an important role in offering financing to the agricultural sector."
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