The Executive Yuan yesterday decided to cut tariffs on apples, nectarines and kiwis by half, effective on Saturday for two months, in an attempt to keep annual inflation below 2 percent, Vice Premier Jiang Yi-hua (江宜樺) told a press conference.
Torrential rain and a number of typhoons over the past months have created a shortage in supply and pushed up the price of fruit by 60 percent on the wholesale fruit market in Taipei last month, near a five-year high, according to the Executive Yuan.
Market transaction volumes last month saw a 16 percent decline compared with the same period last year, the Executive Yuan said.
Jiang said that the two-month measure would help lower market prices by increasing fruit supply to relieve consumer demand, before the harvesting season for locally grown bananas, oranges and tangerines begins.
The measure is expected to generate a loss of NT$115 million (US$3.9 million), Jiang said, adding that the government would evaluate the effects of the scheme before it decides whether to extend the cuts.
At a separate setting, Cai Jing-qiang (蔡精強), director of the Greater Taichung Government’s Agriculture Bureau, opposed the policy, saying it would disadvantage producers of locally grown fruit.
“Last year, fruit farmers suffered huge losses from a collapse in fruit prices due to overproduction. It’s natural that a decrease in fruit production has kept fruit prices high. There is no reason to manipulate the prices of imported fruit,” Cai said.
The government has been struggling to keep the consumer price index (CPI) for the year below 2 percent, as inflation in August hit 3.42 percent from a year earlier, partly due to increases in vegetable and fruit prices in the wake of two typhoons and the increases in electricity rate and fuel prices.