Wed, Oct 09, 2002 - Page 3 News List

KMT unveils draft bill to create agriculture bank

By Stephanie Low  /  STAFF REPORTER

The KMT yesterday unveiled a draft for an agriculture finance law that proposes establishing a national agriculture bank to supervise the troubled credit departments of farmers' and fishermen's associations.

The draft is an effort by the KMT to block the DPP government's plan to close down these credit cooperatives. The opposition has called the DPP measures a means to eliminate the farmers' and fishermen's associations under the pretense of financial reform.

According to the KMT bill, a national agriculture bank would hold a minimum capitalization of NT$20 billion. While government investment would comprise 49 percent of the capitalization, the rest would come from the credit cooperatives.

These cooperatives would need to earmark at least 20 percent of their usable capital funds for the investment and become branches of the new bank.

Ling Shiang-nung (林享能), former chairman of the Council of Agriculture and a member of the KMT-backed National Policy Foundation, said the credit cooperatives must be maintained for the well-being of farmers and fishermen.

Without the credit cooperatives, the associations' promotion, training and benefit programs would all come to a halt, a situation tantamount to having the associations eliminated, Ling said.

Given the circumstances, it is necessary to establish a national agriculture bank to supervise the management of the credit cooperatives and to help the flow of capital funds, promote agriculture and stabilize agricultural finance, Ling said.

He added the matter is urgent given that the existing three agricultural banking institutions -- Farmers Bank of China, Land Bank of Taiwan and Taiwan Cooperative Bank -- will be privatized soon.

KMT draft

■ The party wants to see a national agriculture bank created to look after the financial problems of farmers' and fishermen's associations.

■ The KMT-proposed bank would hold a minimum capitalization of NT$20 billion.

■ Credit cooperatives would be required to earmark at least 20 percent of their usable capital funds for the new bank.


Also yesterday, the TSU, which has raised a bill similar to the KMT's, discussed reforming the credit cooperatives with Minister of Finance Lee Yung-san (李庸三).

According to Su Ying-kwei (蘇盈貴), convener of the TSU legislative caucus, Lee doubted the feasibility of having the credit cooperatives invest in a national agriculture bank, in light of the fact more than 100 of the farmers' and fishermen's associations now have a negative net worth.

However, Lee agreed that the problems of agricultural finance are different from those of commercial finance and should be dealt with separately, Su said.

Su said Lee promised to use the Financial Restructuring Fund (金融重建基金) to bail out the credit cooperatives, which hold overdue loans worth NT$140 billion.

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