Wed, Nov 20, 2002 page3

• Cabinet vows new approach to reforms

  • By Ko Shu-Ling / STAFF REPORTER
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  After the Cabinet suspended the reform measures of the farmers' and fishermen's cooperatives, it announced that it intends to hammer out a new measure to tackle the problem and will submit it to the legislature before the year's end.

  "We hope to reach a consensus and come up with a feasible resolution to deal with the long-standing problems associated with the grassroots cooperatives of farmers' and fishermen's associations on Nov. 30," Premier Yu Shyi-kun said.

  The Executive Yuan is scheduled to hold a summit next Saturday to discuss agricultural financing and the consolidation of grassroots credit units.

  Another summit will be called in late February and early March. It will address other issues such as the production and marketing of agricultural produce and how to upgrade the industry's competitiveness following Taiwan's accession to the WTO in January this year.

  Responding to rumors that the Cabinet might cancel the summit, Minister without Portfolio Hu Sheng-cheng (胡勝正), who is in charge of coordinating the event, dismissed the speculation yesterday.

  "Although we talked about it during the meeting, we failed to reach a final consensus over the topic," Hu said. "The summit will take place as scheduled. We've already sent out the invitations."

  Hu met with representatives of farmers, fishermen and related government officials at the Executive Yuan yesterday morning. Six conclusions were drawn, including making the Council of Agriculture the supervisory body of the institutions.

  Minister without Portfolio Hsu Chih-hsiung (許志雄), who was also present at yesterday's meeting, dismissed talk that the government may reinstate the 36 credit units with a non-performing loan (NPL) ratio of over 25 percent that the government has already forced to close or merge with commercial banks.

  "It's totally impossible," Hu said. "We made our stance clear on Sunday when we met with the farmers' and fishermen's representatives."

  The Cabinet announced on Sunday that it will relax restrictions on credit units with a NPL ratio of between 15 percent and 25 percent.

  It also pledged to return real estate assets that belonged to 20 of the 36 credit units that were transferred from the associations after 1975. The real estate assets don't affect the day-to day business of the cooperatives.

  Yu said that although the Cabinet has suspended the three-tiered risk-control mechanism -- launched on Aug. 22 -- the government's resolve to push for reforms remains unchanged.

  "If the control mechanism is a means to solve the problem of agricultural financing, our determination to push for agricultural reforms is the ultimate goal," Yu said. "While we are adjusting the means, the ultimate end is still there."

  Yu also took the opportunity to explain the Cabinet's about-face on the policy.

  "Because we hate to see government policy cause social instability or confrontation, we thought it was a good idea to halt the reform measure after we considered the impact the planned march may have on social stability," Yu said.

  Farmers and fishermen have planned to protest the government's reform measures on the co-ops on Saturday.

  "When the legislature approved the draft amendments to the statute regarding the establishment and management of the financial reconstruction fund (行政院金融重建基金設置及管理條例) on June 14, it requested the government take care of the financial problems of grassroots cooperatives," Yu said.

  In addition, as the financial problem of the grassroots co-ops is less severe than that of the entire banking system, it only makes sense to tackle the grassroots co-ops first, Yu said.

  According to Yu, the amount of the NPLs incurred by grassroots co-ops stands at about NT$180 billion this year, while that of the entire banking system is recorded at NT$1.8 trillion.

  June's statistics from the Bureau of Monetary Affairs state that the government needs at least NT$1 trillion to deal with the NPLs of the entire banking system and the grassroots credit units' account for NT$67.3 billion of the nation's NPLs.
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