For Japan, entry into the Trans-Pacific Partnership (TPP) will seriously affect the country’s domestic agricultural production, with a predicted reduction in production value of about ￥3 trillion (US$32.2 billion) and a drop in Japan’s food self-sufficiency rate from 39 percent to 27 percent.
Despite this, Japanese Prime Minister Shinzo Abe’s government has announced its intention to participate in US-led negotiations on joining the TPP out of political, economic, trade and national security considerations.
One would think the news would encourage Taiwan’s government to more actively seek to join the TPP.
Although the finalization of talks on entering the TPP is a long way down the road, some government trade officials have said that once Taiwan enters, domestic agricultural production value will fall by about NT$70 billion (US$2.3 billion) — although they are a bit short on actual details.
The idea that the nation’s agricultural production will be hit to such a degree was denied by the government departments concerned, but by then, the damage had been done and farmers have started to worry. After all, official predictions are cold facts and the farmers are only human.
The importance of agriculture goes without saying. Even advanced economies feel the need to protect their farming industries. Experience tells us that, when faced with a global food crisis, and in unusual periods when the main food-producing countries ban food exports, a high GDP does not necessarily translate into food for people.
Our government is always reminding us of the importance of food security, but would rather splash out tens of billions of New Taiwan dollars in subsidies to get farmers to leave more than 200,000 hectares of farmland fallow, or keep rezoning large swathes of farmland so that industrial business areas or science parks can be built.
In some cases, land speculators are also buying up the land and putting it to non-agricultural use. This loss of productive farmland is gradually depleting the nation’s agricultural production areas. The farming industry is shrinking and many farmers are having to rely on non-farming sources of income or government subsidies to get by.
Farming in Taiwan is failing to adapt and if the domestic market for agricultural products is opened up, or import duties are slashed, the market is going to be severely affected.
It is important that the government departments concerned review this situation and come up with the appropriate policies so that the damage is kept to a minimum. This is not something that can be solved through sound bites from our national leaders: The government must act, not merely talk about the problem.
Even though Taiwan’s agricultural sector will not be one of the core issues in talks, either for signing free-trade agreements (FTA) with other countries or for joining the TPP, these agreements will have just as much of an impact on the industry as entry into the WTO had.
The questions that need to be asked are: Has the government done all that it can in devising its strategy to reduce the unfavorable impact FTAs are going to have on the industry, especially with regard to the scale of the industry, business models and the competition strategies it is to adopt going forward?
Has it done all it can to make sure the industry, given the current liberalization of trade, has the space it needs to survive and to grow, without having to rely on government subsidies?
On these questions, the government has yet to provide any satisfactory answers.
If the government wants to complete the international economic and trade negotiations with as little trouble as possible, it is going to have to win over the hearts and minds of Taiwanese farmers, and gain their trust, understanding and support. Only then will it be able to keep unrest to a minimum.
There have been many changes recently — the lifting of the ban on ractopamine-tainted US beef imports; amendments to the small landlords and big tenant-farmers program; the policy U-turn on planting trees on uncultivated land; the new system of reducing fallow land incentives by half; the setting up of value-added shipping and sales centers for agricultural products in the new “free economic pilot zones”; and the new farmers’ insurance system — alowwing people to see the arbitrary and unilateral decisionmaking of authorities within the government, carried out in a way lacking the patience or sincerity to consult farmers, farmers’ movements or the local governments expected to implement them.
Farmers are up in arms over this arrogant approach to policymaking and have lost faith in the government. If these departments want to regain farmers’ trust, they have to introduce policies that people find acceptable and stop forcing new policies on farmers, or holding them ransom with threats of economic stagnation.
More worrying is that, at a time when the domestic agricultural sector is producing more than it can sell, is losing valuable farmland, is suffering manpower shortages, farmers’ salaries are dropping and water supplies are restricted, the government departments concerned have delivered another blow: They have announced that the government is to allow unprocessed agricultural products from overseas to be imported into Taiwan, tariff-free, where they will be processed in free economic pilot zones. These are also to be sold under the MIT (Made in Taiwan) label, claiming they have been made on the “front shop, back factory” model.
This measure does nothing to help the domestic agricultural sector, and other MIT-branded products — genuinely domestically produced, with higher costs — are now going to have to compete on the global market with these other products bearing the MIT label.
The government needs to come clean about who is profiting from this endeavor, or it will find it difficult to avoid being branded as the government that allowed the nation’s agriculture to collapse on its watch.
Du Yu is a member of the Chen-Li task force for Agricultural Reform.
Translated by Paul Cooper
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