Fri, Sep 09, 2011 page8

• Rethinking agricultural policies

  • By Du Yu 杜宇
  • • 
    • 
    • 

  Following the recent glut of bananas and papayas, prices for guavas have dropped sharply and alarm bells are ringing for pomelos and sugar apples. The supply and demand imbalance seems to be a nightmare that just won’t go away for local farmers and fishermen.

  Apart from making political comments such as talk of “B-grade produce” and saying that being too gloomy will only make matters worse, the government’s emphasis is still on its expectation that China will extend a helping hand to deal with the crisis. This despite China itself being a major fruit-growing country: It is the world’s biggest producer of longans and lychees.

  Moreover, a free-trade agreement between China and ASEAN has driven tariffs for agricultural produce to almost nothing. China now imports big quantities of tropical fruit grown in Thailand and Vietnam, and prices for these fruits have dropped by 10 to 25 percent on average. Fruit from Southeast Asia is very popular with Chinese consumers and competes strongly with Taiwanese produce.

  Although China has done a lot to make things easy for Taiwan in terms of customs clearance, inspection and tariffs, the government still needs a global vision for marketing Taiwanese agricultural products. The growing interest worldwide in “green,” environment-friendly agricultural and fishery products suits Taiwan very well. This trend offers new business opportunities, so there is no need for Taiwan to become dependent on China.

  At present, Taiwanese fruit is marketed in China as fine--quality produce. Taiwan-grown fruit is sold mostly in supermarkets, which in China account for only 2 to 3 percent of all fresh fruit sales. Taiwanese fruit is relatively high-priced and is bought mainly by high-income consumers. Although supermarkets in China hold Taiwanese fruit festivals every year, general consumers find the prices rather high and so are not very keen to buy Taiwanese produce. There is also cheaper fruit falsely labeled as being grown in Taiwan, and these fake Taiwanese fruit also sell very well.

  Quite a number of Taiwanese producers have sought to cut their costs by planting Taiwanese fruit varieties in southern Chinese provinces, such as Fujian, Guangdong and Hainan. Although the quality of these Taiwanese varieties grown in China is not up to the standard of fruit produced in Taiwan, they sell for about half the price, making them more attractive to consumers. Moreover, Taiwanese fruit production is limited by seasonal factors and the land area available for planting, so the quantity and quality of supply can vary considerably. That is another factor that makes Chinese supermarkets less willing to sign up and sell Taiwanese produce.

  The government claims that the Cross-Strait Agreement on Intellectual Property Rights Protection and Cooperation can protect producers’ rights over plant varieties; however, a year after the agreement was signed, many critics say that the protection afforded to Taiwanese varieties in China is severely lacking. Falsely labeled and counterfeit goods proliferate in China, yet Beijing seems oblivious to protests from other countries. In light of this, Taiwanese farmers are doubtful whether the Chinese government can enforce the intellectual property rights protection contained in the agreement. The Taiwanese government should therefore come up with tangible measures to make sure that the techniques and varieties that are key to the survival of Taiwan’s agriculture stay here in the country.

  Taiwan has excellent production techniques and produces high-quality goods, but its production costs are relatively high. Given these characteristics, the nation should focus its marketing on high-end markets around the world, or at the emerging middle class. This emerging group of consumers favors goods and services that are elegant but not too expensive — ones that represent good value for money. They are looking for luxury at a reasonable price. This kind of demand has gradually become the mainstream. Taiwanese products such as farm-raised mullet roe, mangoes, cantaloupes and sea bream fins are worthy of development as suitable items for this market.

  Taiwan is increasingly relying on China’s broad consumer market to get its farmers and fishermen out of trouble every time there is an oversupply, instead of facing up to the underlying problems of the agricultural sector and focusing on the unique features of local produce. To survive, farmers have grown increasingly dependent on non-agricultural income and various government subsidies. What future can there be for a farming sector under such conditions, and what dignity can there be for farmers?

  Producers have to contend with ever-fiercer market competition and ever-higher consumer expectations. The existing practice of free export fails to address these problems because it scatters the available marketing energies and often leads to negative competition that disrupts the market. In future, we should integrate Taiwan’s many small-scale exporters of agricultural produce, concentrate all available manpower and assets, and use them to develop our presence in upper-end consumer markets around the world.

  A worthy case for reference would be Norway’s success in marketing Norwegian salmon around the world. The Norwegian Seafood Export Council set up permanent overseas representative offices to promote the country’s salmon in strategic overseas markets. It contracted creative and experienced local public relations companies in each market to help with promotion, and successfully found ways to integrate the product with local customs and culinary culture.

  Aside from rushing to provide subsidies and relief each time agricultural production and sales get out of balance, the government would do well to study the Norwegian model and adopt similar measures.

  Du Yu is chief executive officer of the Chen-Li Task Force for Agricultural Reform.

  Translated by Julian Clegg
• Most Popular

  • 1

    Chinese technicians join airport MRT project

  • 2

    A train for whom? Is a new monorail helpful for Cairo?

  • 3

    Apple is giving Intel’s turnaround some momentum

  • 4

    Taiwan firms eye Philippines amid shift to non-China supply chains: CIER

  • 5

    Taiwan wants bilingual, AI-ready graduates — but tests for yesteryear