Thu, Jul 19, 2018 - Page 3 News List

INTERVIEW: Managing agriculture a difficult balancing act: minister

Overproduction and falling produce prices have hounded Taiwan’s agricultural industry for years, if not decades. Council of Agriculture Minister Lin Tsung-hsien talks about the government’s plans and measures to address this chronic supply-and-demand imbalance in an interview with ‘Liberty Times’ (sister newspaper of the ‘Taipei Times’) staff reporter Jennifer Huang

Council of Agriculture Minister Lin Tsung-hsien gestures during an interview in Taipei on Thursday last week.

Photo: Huang Yao-cheng, Taipei Times

Liberty Times (LT): What are the causes of the recurring supply-and-demand imbalance and unstable prices of agricultural produce?

Lin Tsung-hsien (林聰賢): Taiwan’s climate and geographical conditions are both a blessing and a curse. Expansions of area under cultivation, easy-to-grow fruit and vegetables, and agricultural techniques have led to leaps in production volume.

At the same time, climate change has increased the frequency of natural disasters. There are one to three typhoons each year, as well as excessive rainfall and droughts that harm fruit and vegetables. So, when prices for certain fruit and vegetables go up, producers jump on the bandwagon. Production of these crops increases, but their quality suffers. Supply and demand imbalances and price fluctuations go hand-in-hand.

Take bananas for example. With near-perennial harvests, total area under cultivation increased from 13,788 hectares in 2011 to 16,842 hectares last year. After cold temperatures drove prices up in 2016, production volume rose by 100,000 tonnes.

As for pineapples, total area under cultivation increased from 9,030 hectares in 2011 to 17,090 hectares this year, while production rose from 400,000 tonnes to 580,000 tonnes.

Farmers boost production volumes in hopes of increasing their value. Instead, they are rewarded with falling prices. Notably, many of those who jump on bandwagons are part-time farmers.

For instance, about 3,000 hectares of betel-nut land in Pingtung have been converted to grow low-quality bananas. Such land is usually tended by part-time farmers tempted by good prices. This flooded the market with sub-par quality bananas and prices dropped to unreasonable levels.

To make matters worse, the city and county elections [on Nov. 24] this year are producing a lot of misinformation that are intended to agitate [the public] or promote [China’s] “united front” [tactics]. Fake news about prices collapsing — often accompanied by old photographs or photographs from China — are circulating on the Web. Those exaggerated stories about low-quality produce probably added pressure to prices.

LT: Do you agree with the comments made by Chen Pao-chi (陳保基) when he was the minister of agriculture during the former Chinese Nationalist Party (KMT) administration that it is counterproductive for the government to have fixed-price purchases of produce when prices fall below 95 percent of cost?

Lin: Since 2007, the government has spent NT$1.7 billion (US$55.6 million) on adjusting vegetable and fruit prices, and close to NT$40 billion on natural disaster relief subsidies. Those expenditures are widely panned. There are reports that some farmers intentionally left produce on the field unharvested or refused to switch crops to receive the NT$75,000 per hectare subsidy.

Money only fixes short-term problems, not the long-term problem with the supply and demand structure. It does not help with upgrading the industry and we should not expand it further.

The council protects the livelihood of farmers through disaster relief subsidies, which compensate for 20 percent of cost and help farmers recover land for cultivation. We are working to legislate an agricultural insurance bill to cover the other 80 percent of cost.

A pilot program for grafted Asian pears, mangoes and custard apples has been implemented. Income security and protection against natural disasters would free full-time farmers to focus on improving agricultural techniques and quality.

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