Credit reform protest to go ahead

A leader of a national organization representing farmers' and fishermen's associations yesterday reiterated the associations' determination to mobilize 200,000 members to demonstrate in front of county governments nationwide on Oct. 29 to show their support for KMT and TSU plans to create a national agriculture bank.

The protest would also voice opposition to the central government's recently implemented scheme to reform the credit departments of those associations.

The threat, first made last week, was restated yesterday despite an agreement between Premier Yu Shyi-kun and seven county commissioners and representatives of their counties' associations Saturday.

"The premier sincerely tried to solve the problems, but his sincerity didn't help improve anything," said Yan Jian-sian (顏建賢), a senior official of the Self-help Association of Farmers' and Fishermen's Associations, which is organizing the protest.

A Ministry of Finance (MOF) plan to overhaul the credit departments of farmers and fishermen's associations because of their high non-performing loan (NPL) ratios -- which stand at an average of 21.5 percent -- was attacked by former president Lee Teng-hui (李登輝), opposition parties and many of the associations' staff, who feared for the associations' existence.

Premier Yu Shyi-kun reached a five-point agreement with seven county commissioners from southern Taiwan and financial officials from the associations at a closed-door meeting called in a bid to ease such fears on Saturday. He also promised to convene a national conference on agriculture financing by year's end.

But Yan, who did not attend Saturday's meeting, said that Yu's promises did not satisfy the majority of the associations' members.

The government's three-tier risk-control mechanism, introduced early last month, prohibits the credit associations with NPL ratios above 10 percent from receiving new funds from non-members. It also prohibits them from offering interest rates on savings that are higher than the rates of Taiwan Cooperative Bank (合作金庫). Granting unsecured loans or granting loans to their own board members is also forbidden.

Under Saturday's agreement, however, credit departments whose NPL ratios improve by certain percentages (depending on their current ratio) would be allowed to resume normal operations within a month. Credit units with NPL ratios over 25 percent would also be allowed to grant loans up to a maximum of NT$1 million instead of the current NT$30,000. The agreement also included incentives to encourage lower NPL ratios.

"Calling an assembly on agricultural finance won't help either. The government should submit all its proposals to the Legislative Yuan, rather than hold a conference of this sort to avoid the Legislative Yuan's scrutiny," Yan said.

Yan said the associations hope that they can be managed by the Council of Agriculture (COA) alone, rather than by both the COA and the MOF, as has been the case since the government's mechanism was introduced.

Yan also said that the self-help association is planning a demonstration in Taipei for the middle of next month at which some 100,000 protesters will take to the streets.

Reacting to the associations' continued objections, Cabinet Spokesman Chuang Suo-hang (莊碩漢) said, "The government and the grassroots financial institutions have the same goal on reform. There are disputes over implementation, but we will continue to discuss this with them," Chuang told reporters yesterday.