Liberty Times (LT): The price of persimmons led to a war of words between the two main political parties that seemed to focus on each criticizing the other over pictures and the prices for astringent and non-astringent persimmons. Does this help resolve problems surrounding the production and sales of agricultural products?
Lee Chin-lung (李金龍): The original purpose of the DPP’s flier was to point out the imbalance between the [over-]production of fruit and [low] sales, causing prices to plummet. However, the issue of using the wrong picture sadly led to a blurring of the focus.
Even though the government initiated an emergency policy to buy astringent persimmons that were being sold for very low prices, both the KMT and the DPP have yet to rationally discuss the issue of the imbalance between the sale and production of vegetables and fruits. Neither have they talked about how to raise [the efficiency of the] system.
The production and sales imbalance of agricultural products is a result of government policy and administration problems.
The prices of both astringent and non--astringent persimmons have dropped from last year; that’s a fact. The primary reason [leading to the drop in prices] is because there were no major weather events this year. This led to a good harvest, so the quantity affected the pricing.
Therefore, the most important thing is that the agricultural sector’s administrative organizations are alert to such factors.
Persimmons are harvested once a year, so the government’s agricultural advisers should know the total production area, yield estimates and the competitiveness of persimmons compared with other recently picked fruits so they can initiate regulation mechanisms, if necessary.
Take the German government’s actions on the harvest of apples as an example. The German government begins to survey the production of apples in France, Spain and other countries, as well as plans appropriate distribution methods, long before apples in Germany are ripe and ready to be harvested.
Depending on the situation they face, the government can assist in either distributing the apples locally, exporting them or having the fruit processed.
Take bananas, which also saw their prices plummet recently, as another example. Bananas grown in the south of Taiwan are harvested every 10 months, while bananas grown in central ares are harvested every 14 months. The harvest period is usually in May. The government could start intervening in the production of the fruit as early as February. For example, it can tell farmers to reduce their average production per hectare from 20,000kg to 15,000kg. It could also negotiate with Japan to increase banana exports, or have fruit processing plants place larger orders.
However, in recent years, the agricultural ministry seems to be losing its focus. It holds press conferences to criticize others, but its ability to discover problems early on and then solve them is decreasing.
LT: Farmers have called for the re-introduction of the “95 system” [a mechanism which would see the government buy up major agricultural goods that have experienced drastic price drops at 95 percent of the overhead cost]. The ministry did not order a mass buy-up of persimmons to help farmers until President Ma Ying-jeou (馬英九) said this should be done. Was the timing right?
Lee: Taiwan’s agricultural sector operates in a free economy, so it can be hard to regulate what farmers plant and on how many hectares. And if you add in the unpredictability of natural disasters, it is hard to avoid the issue of overproduction.
However, the most important thing is to have good midterm warning and dispersal systems, as well as something like the 95 system as an end-of-the-line option to prevent the yearlong efforts of farmers being wasted.
What is truly lamentable is that the 95 system I established in 2004 during my tenure as minister of agriculture has not been widely used over the past two years, and when it is used, its seems to take a long time until it is applied.
When the price of rice dropped last year because of a natural disaster, it took the government until this year to raise the purchase price of grain by NT$3. There are many cases of prices for agricultural products falling over the past two years, including garlic last year. This year we have seen a drop in the price of bananas and pears, and even non-mainstream fruit, such as persimmons.
Many of the problems weren’t solved until they were exposed by the media or because farmers protested. If ministry officials have the time to hold press conferences, they should also have the time to visit farms; and then maybe problems can be solved earlier, or even avoided.
LT: What are your suggestions on how the production and sale of agricultural products can be improved? Can the Economic Cooperation Framework Agreement (ECFA) help resolve the problem?
Lee: What I am currently worried about are the oranges that are being harvested this month. This year’s [orange] harvest is predicted to be a bountiful one and this could be the next fruit to see a pricing problem.
The government should have been on the lookout and made provisional measures to prevent another wave of protesting farmers.
Unlike communist or other authoritarian countries where agricultural output can be closely controlled, Taiwan’s agricultural sector more or less operates in a free economy. Also, Taiwan’s farmers are in a fairly weak position when it comes to setting prices, while the middleman are often in a stronger position.
How to systematically adjust production and sale rates [of agricultural products] and streamline the channels between farmers and consumers is therefore an important task.
In comparison with Europe or the US, both of which cover large areas and therefore need middlemen with regard to transport and sales, Taiwan is much smaller and has short transport times, and the government has more room to streamline the sales channel.
As for the frontline production, the government could also try to reinvigorate the Taiwan Agricultural Research Institutes and Farmers’ Associations to further understand how farmland is actually used.
Also, through advertisements and incentives, the government can also decrease the planting of the most popular agricultural products [that season] and influence where agricultural products are being planted.
Hopefully, [the government] will make gradual improvements and help resolve the problems the sector faces, rather then expend all its energy on fighting over prices with the opposition party.
Although the government keeps saying that the ECFA will be able to solve the sale and production imbalance problem, statistics comparing the pre-ECFA and post-ECFA periods show that although Taiwan’s trade deficit for agricultural products with China has shrunk by US$52 million, the trade deficit in terms of agricultural products from around the world has increased by US$1.8 billion. We’re losing about 35 times the amount of what we gain, not to mention the loss of Taiwanese agricultural technology and talent.
This country produces very high-quality fruit and we should be aiming for high-end agricultural products that fetch high prices. With the US, Europe and Japan as markets for such higher-priced fruits, they could help push the development of Taiwan’s agricultural sector.
The government should not place too much emphasis or rely too much on China. Rather, it should focus more on important international markets.
LT: With natural disasters damaging agricultural products and prices plummeting during the harvest season, farmers have a fluctuating and unstable income. What are your views on the farmers’ subsidy?
Lee: Compared with civil servants or workers who have a fixed salary every month, a farmer’s income depends on the weather, meaning their income fluctuates.
In recent years, agricultural families have seen their income drop, falling from NT$940,000 (US$31,000) in 2006 to below NT$870,000 last year, raising concern in various sectors.
The farmers’ subsidy isn’t a kind of social subsidy, but rather a manifestation of social justice for farmers.
In the past, when the KMT government first came to Taiwan, the majority of the people were farmers. However, the government’s suppression of agricultural prices to control the prices of other commodities caused the younger generations in farming villages to turn to industrial or processing jobs, jump-starting the development of industry and, later on, even technology.
[However] agriculture is the root of Taiwan’s economy. It’s like in a family; it’s always the eldest son or daughter who goes to work, making money so the younger siblings can go to college or study abroad. However, after the younger siblings get better jobs and starting making money, are they going to cast aside their elder sibling, or repay them for their sacrifices?
Our society is obligated to take care of retired farmers.
Translated by Jake Chung, Staff Writer
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