The nation's banana glut has caused quite a stir. According to media reports over the last few days, there is also a glut of oranges and milkfish, leaving many farmers wondering when poor sales will perk up.
Slow sales for agricultural products is a serious problem year round. Its root cause is that over the years, government agencies responsible for agricultural policy have not devoted themselves to establishing a system for managing the transportation and sale of agricultural products that clearly distinguishes among the different kinds of produce. This has become especially apparent in recent years, during which time the government has simply purchased excess supply, fostering dependency on the government when business is bad. Either that or officials return to their old practice of making television appearances eating agricultural goods to temporarily appease farmers. However, these are only piecemeal measures which have no real long-term effect.
Other countries like the US, Canada, Japan and EU countries have adopted a supply management strategy to prevent surpluses from gutting prices. This strategy includes production management, market supply and exports.
When managing production output, Canada has an agricultural marketing association to regulate local production. For example, it regulates the number of chickens permitted at each egg farm, thereby controlling national egg production.
Taiwan also once had a system to restrict production, during the 1960s and 1970s, when the nation exported mushrooms to Europe. Farms were only allowed to produce a certain quantity of mushrooms per ping (3.3m2) of land.
Another example was when the former Taiwan Provincial Tobacco and Wine Monopoly Bureau controlled tobacco production by putting quotas on the prices of different grades of tobacco and land used for tobacco cultivation. However, agricultural administration agencies have not continued to use these successful models to manage production and sale of other agricultural products. Its success came from a contracted production system between producers and distributors. This has been successfully adopted by large companies such as the Taiwan branch of Thai poultry conglomerate Charoen Pokphand Enterprise's in its successful application of contract farming, under which it buys products from local farms and markets them itself.
As for regulating market supply, the success of the US government's directives for agricultural product marketing is a model example. These directives adopt standards for market quantity, and include the following measures.
First, transport bans on specified holidays. Just as butchers in Taiwan are forbidden to slaughter pigs on the 15th day of each lunar month, the US government bans transport of agricultural products from the place of production to markets during the Christmas and New Year's holidays.
Second, the processing of surplus produce: the directive regulating the transportation and sale of agricultural goods primarily focuses on classification and standardization. That is, only produce meeting certain criteria can be brought to the marketplace, while other produce will be stored in freezers for processing later. In Taiwan, processing is only considered at times of production surplus -- for example, during winter -- while US regulation means that a certain amount of agricultural produce will always be set aside for processing.
Third, there is seasonal storage: Just like in Taiwan, the harvest season for sweet onions grown in the US state of Georgia begins in mid-April and ends in mid-June. Sweet onion growers usually begin to store their harvest at the end of May and put them up for sale during the Christmas holiday. This allows them to avoid underpricing their produce during the harvest season and raise the prices after the storage period.
Fourth, the adoption of biotechnology to delay harvest, which in the US has been particularly successful in growing apples.
The successful implementation of these transport regulations depends on a number of preconditions. They require the existence of a good cooperative association production and marketing committee as well as a concentrated, complete production and marketing plan within each area of production. The main characteristic is that local growers and distributors jointly direct and put up the funds for the operation of the regulations. The US Department of Agriculture and state governments are only responsible for supervising the system and do not provide any financial aid. At present, a large proportion of fruit, vegetables and nuts in use are distributed under this system. The Sunkist oranges and Washington apples that the Taiwanese are so familiar with also rely on the successful operation of this system.
Taiwan's bananas, oranges and milkfish fulfill the requirement of being concentrated in a certain production area. However, whether Taiwan has good production or distribution cooperative associations, not to mention a good distribution program, is still an open question. In fact, farmers' associations can no longer direct operations to the same extent they used to. Agricultural cooperatives in Taiwan are still regulated by the Cooperative Society Law (合作社法) which defines them as non-profitable organizations.
The farmer's associations and cooperatives that used to be the main force behind marketing and distribution in the past are now powerless when faced with slow sales. Instead, they expect the government to purchase their surplus yields or subsidize their losses. The Taiwan Provincial Fruit Marketing Cooperative, which used to excel in helping Taiwanese farmers export fruit, in particular bananas to Japan, now seem incapable of dealing with the surplus issue.
I hope that the government's agricultural agencies would be able to meet slow sales by looking to past successful production and distribution systems, such as contract and export management. They should also consider the special character of domestic agricultural production and marketing organizations, such as farmers' associations and cooperatives, and discuss distribution mechanisms for agricultural produce such as the Canadian agricultural marketing organization and the US' transport directive in order to reinvigorate Taiwan's agricultural producers and distributors.
I hope that by this time next year, we will no longer see government officials eating bananas on TV or civil servants being forced to buy bananas.
Huang Wan-tran is a professor in the department of Logistics and Management at the Chungchou Institute of Technology and the institute's academic vice president.
Translated by Marc Langer, Daniel Cheng and Perry Svensson
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017
RSS