Mon, Sep 08, 2014 page8

• ECFA gutted nation’s fishery sector

  • By Du Yu 杜宇
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  There are many different interpretations of the impact of the Economic Cooperation Framework Agreement (ECFA) on the nation’s industries.

  Certainly, as far as the agricultural sector is concerned, it could be argued that it has helped with exports to China, at least on a cursory reading of the figures. For example, last year Taiwan enjoyed a trade surplus with China for agricultural and fishery products of US$17.8 million.

  However, the market for certain agricultural and fishery products is very competitive and Taiwan is now finding itself behind China in some sectors. The government needs to address the reality of what is happening, instead of just reporting the good news and ignoring the bad, intentionally misleading the public.

  Taiwan cannot turn away from the prodigious consumption of the Chinese market, but the government needs to think more carefully about how it is to keep a grip on Taiwan’s core competencies when dealing with China, so the nation can maintain its competitive advantage and diversify risk.

  Take, for example, the grouper fish. The fish, very much in demand, is a product of high economic value, although the government had previously largely ignored it, failing to chalk it up as a flagship product. It was down to the painstaking efforts of producers to promote it.

  However, after it had been included on the ECFA early harvest list, the government started pushing it in earnest and the production of domestically farmed grouper has grown rapidly in terms of total area of the farms involved and the volume produced.

  Unfortunately, the export market is concentrated entirely in China and Hong Kong. According to the latest figures, from January to last month, Taiwan’s farmed grouper export volume to China, including Hong Kong, was 10,964 tonnes — 99.67 percent of the total export volume of 11,000 tonnes. By comparison, only 18 tonnes were exported to Japan, while farmed grouper export volume to the US was negligible. In other words, there is no diversification of risk.

  More recently, with China’s crackdown on the offerings of luxury gifts among officials, and the increase in China’s own domestically farmed grouper, Taiwan’s grouper export volume has fallen in value considerably compared to the same period last year, and this has repercussions for how farmers plan for the long-term development of the nation’s grouper production.

  The authorities should shift their focus now to developing the domestic market and overseas markets besides China, instead of relying solely on the Chinese market.

  Another fish heavily promoted by China and Taiwan is the milkfish. In Taiwan the milkfish has traditionally been an inexpensive dish, and it was also included on the ECFA early harvest list. China even signed a deal to buy milkfish from Greater Tainan’s Syuejia District (學甲).

  However, milkfish is very bony and has a strong, earthy flavor, and because not many people know how to prepare it, it is unpopular. Consequently, it is not in high demand among the Chinese public and it has been difficult to sell.

  Neither Beijing nor Taipei seem willing to get to the bottom of this issue. According to recent official statistics, only 1 tonne of farmed milkfish was exported to China in the first eight months of the year, much lower than the 183 tonnes last year. The government needs to account for this staggering drop and not evade the issue.

  Domestically produced eel, tilapia and abalone are not as competitive in the export market as they once were. Even though this is not directly attributable to the signing of the ECFA, it cannot be overlooked.

  A major problem lies in the Taiwanese businesses and technicians who have gone to China, taking with them technical knowledge — production, processing and management models — initially gained through costly research and development in Taiwan, and equipment. Coupled with the low cost of land, labor and fish farms in China, this has allowed China to quickly overtake Taiwan in terms of production scale and wrestle away the market share formerly held by Taiwan’s processed eel and tilapia products.

  Meanwhile, tilapia produced in China has been introduced into the EU market, with its stringent quarantine and inspection requirements — 16,014 tonnes of frozen tilapia fillets were exported last year. Also, low-priced China-produced abalone has found its way into Taiwan’s domestic market, leaving Taiwanese producers to rely solely on quality to protect their share of the domestic market.

  The examples given serve as a warning to the government and the public of the need for vigilance against market infiltration as exchanges with China accelerate.

  The government cannot allow the few remaining core advantages that Taiwanese agriculture and aquaculture has to be gutted in the name of opening up to the international market.

  Taiwan’s agriculture and fishery sectors are facing a crisis, and government officials have to sit up and take note of what is happening.

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

  Translated by Paul Cooper
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