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Taiwan's Agriculture
Taiwan's agricultural sector has faced increased pressure from rapid economic development and soaring labor costs in recent years. WTO accession in January 2002 and subsequent trade liberalization have made the situation worse, as Taiwan fulfills its WTO commitments of opening its market and eliminating protectionist trade measures. In light of this situation, the government has implemented new policies to develop the agricultural sector into a highly competitive and modernized green industry.

The New Plan on Agriculture for the 21st Century implemented in January 2001 was designed not only to develop a sustainable green industry, but also to create a dignified and dynamic life for farmers. The plan emphasizes quality over quantity. Thus, the number of people in the agricultural sector will be reduced 4 percent annually to 633,000, and labor productivity will be raised by 4.17 percent each year from 2001 through 2004. The annual income from agricultural products for every farming household will be increased to US$5,230.


Agricultural modernization has been inhibited by the small size of farms and a lack of investment in the facilities and training necessary to develop large and profitable businesses. The unattractive future prospects of farming have pushed many youths to seek better-paying jobs in the cities. As a result, the agrarian workforce has aged rapidly, with the number of farmers aged over 65 increasing annually, accounting for about 15 percent of the total farming population. To encourage young farmers to stay on the farm, the Council of Agriculture(COA) has introduced modern farm management, provided technical training, and offered guidance on the establishment of an entrepreneurial production and distribution system. As of 2001, it had trained 90 professional farm management counselors, offered about 6,500 courses on production and distribution integration, and given over 1,500 young farmers professional technical and management training.
The COA also recognized the need to provide alternative forms of assistance to aging farmers and presently offers monthly stipends of US$96 to farmers over the age of 65 who have been covered by the farmers' health insurance program for more than six months. About US$700 million was allocated to subsidize elderly farmers and fishermen in 2001.




In recent years, the diminishing GDP share of the agricultural sector and large increases in farm imports following Taiwan's WTO accession have underscored the need to make better use of farmland. The government has worked with farmers' organizations and other agencies to convert unprofitable farmland to other uses, consolidate plots into larger areas of land that are easier to farm, and gradually reduce excess farmland. Approximately 80,000 hectares of farmland is expected to go idle or be used for non-agricultural purposes by 2004.

In 2000, the Agricultural Development Act was revised to facilitate the transfer and division of farmland, the re-designation of land use, and farming operations by corporate bodies. To prevent windfall profits, those who transfer farmland for industrial or commercial use are required to pay a usage fee of up to 12 percent on the current assessed price of the transferred land. To encourage businesses to move to remote areas of Taiwan and to accelerate offshore island development, farmland released in designated remote areas on Taiwan proper and offshore islands is exempt from such usage fees.

With regard to farmland consolidation, odd plots have been integrated and then redistributed, giving each farmer a better proportioned plot of land about the same size as the one he formerly owned. Farm roads and irrigation ditches that serve these areas have also been improved, rebuilt, or repaired, thereby reducing production and marketing costs and increasing operational efficiency.

Under the General Farmland Utilization Project, county and city governments and grassroots organizations receive guidance in setting up agricultural districts to meet the needs of farmers based on environmental, economic, and technical requirements. In 2001, the COA spent US$3.3 million on the project, affecting 58,127 hectares of farmland.

Irrigation works are the key to agricultural production. Although Taiwan has an annual average precipitation of 2,515 mm, about 80 percent of this is concentrated from May to November. Thus, water transfer and conservation measures have to be made in advance to counter the occasional regional or seasonal water shortage or drought. In addition to strengthening irrigation management, the COA allocates water resources to facilitate agricultural production. The Ministry of Economic Affairs' data for the year 2000 shows that irrigation, aquaculture, and livestock activities used 12.3 billion cubic meters, or 70 percent of the total water used during the year. The agricultural sector is expected to contain the amount of water it uses to between 11.73 and 14.28 billion cubic meters by the year 2011.
Both the types and quantities of crops produced in Taiwan have changed over the past two decades. Taiwan's accession to the WTO has pressured farmers to diversify crop production into horticulture, agrotourism, exotic fruits and vegetables, chemical-free organic produce, and other high-value products. The Taiwanese people have changed their dietary habits, and are now eating more wheat-based foods and dairy products while consuming less rice. Taiwan's rising standard of living has boosted demand for such products as exotic flowers and processed foods.

Despite the decrease in rice consumption, however, rice still ranked as Taiwan's most valuable crop, followed by betel nuts, pineapples, mangoes, sugar cane, watermelons, tea, bamboo shoots, pears, and peanuts. In terms of harvested area, rice again ranked first, followed by betel nuts, sugar cane, peanuts, bamboo shoots, tea, mangoes, corn, watermelons, and sorghum.

According to the COA, there were approximately 332,000 hectares of rice fields in Taiwan, producing 1.7 million tons of rice, or 10 percent less than the previous year, during Taiwan's two crop seasons. Despite reduced production due to two major typhoons, rice harvest in Taiwan continued to exceed the annual demand. This surplus was largely attributed to changes in people's dietary habits, which caused per capita rice consumption to fall by 60 percent between 1974 and 2001, from 134 kilograms to 54 kilograms. As Taiwan entered the WTO in January 2002, foreign competition intensified the downward pressure on rice prices.

Since then, the COA has adjusted paddy field utilization to better balance the supply and demand of rice. As of 2001, it had diverted nearly 189,000 hectares of paddies, of which 130,500 hectares were left fallow and the remainder was planted with other crops; reduced the total area of rice cultivation from 384,300 hectares in 1997 to 332,200 hectares in 2001; and decreased rice yields by 1.66 million metric tons to 1.4 million metric tons.

The government purchases rice from farmers through the Food Stabilization Fund, purchased some 421,000 metric tons of rice for US$7.14 million. However, the government is reviewing the subsidization system and paddy field utilization program as part of its effort to establish a stable rice production and marketing system. It is also working to strengthen the international competitiveness of domestic rice, upgrade cultivation techniques, and encourage the production and marketing of quality rice.

Most vegetables produced in Taiwan are for domestic consumption. In 2001, about 174,000 hectares of land was devoted to vegetable cultivation, mainly in Yunlin, Tainan, Changhua, and Chia-I Counties. Vegetable production was 3,046,000 metric tons, and crop yields per hectare of land were 17,500 kilograms.

Bamboo shoots, watermelons, vegetable soybeans, leafy vegetables, cabbages, garlic, and cantaloupes were the leading vegetables in terms of area planted. The most important vegetable crops by value were watermelons, bamboo shoots, cabbages, cantaloupes, garlic bulbs, scallions, water bamboo, radishes, and Chinese cabbages. Currently, more than 100 kinds of vegetables are produced in Taiwan. In northern Taiwan, radishes, Chinese cabbages, leaf mustard, and garlic thrive in the cooler climate. In southern Taiwan, tomatoes, cauliflower, bamboo shoots, and beans are cultivated.

Over 30 types of fruit are cultivated in Taiwan. Such deciduous varieties as apples, pears, and peaches thrive at high elevations, while citrus fruits, bananas, pineapples, lychees, longans, mangoes, papayas, persimmons, loquats, and guavas are grown in the lower plains and undulating slope lands. The main crops are citrus fruits, mangoes, lychees, bananas, pineapples, wax apples, and Asian pears. In 2001, 2.57 million metric tons of fruit were grown in Taiwan on a total planted area of 222,000 hectares. Wax apples and apples enjoyed a respective 39 and 33 percent increase in production from the previous year.

Local growers have suffered tremendously from foreign fruit imports, which have flooded the domestic market after the reduction or elimination of tariffs on imported fruit. To face this growing competition, Taiwan fruit growers have applied advanced horticulture technology to modernize their operations. Through the effective control of diseases, adjustments of fruit maturation, cultivation of improved fruit strains, and implementation of multiple annual harvests, fruit farming has become a profitable and growing industry. Orchards are also diversifying into the agrotourism business.

  Sugar Cane
Taiwan's sugar industry has lost most of its former vitality due to a stagnation in global sugar prices and the importation of sugar. Both of these signs spell transition for the state-run Taiwan Sugar Corporation (TSC), which has expanded its product line and diversified into biotechnology, land development, and overseas investments in order to remain competitive.

Taiwan was formerly one of the world's leading sugar exporters. In the 1950s and 1960s, it had over 100,000 hectares of sugar cane fields and produced over one million metric tons of sugar annually. By 2001, however, farm labor shortages and a steady decline in world prices had reduced Taiwan's sugar cane fields to 32,000 hectares, more than two-thirds of which were farmed by the TSC. Decreases in domestic sugar production led to a subsequent increase in sugar imports, and Taiwan imported 2,180,000 metric tons of sugar.

Tea was once a mainstay of Taiwan's economy. This situation has since reversed, however, and Taiwan has been a major tea importer since 1991, one year after the domestic market was opened to Southeast Asian tea imports. Since then, annual tea imports have multiplied. From 2000 to 2001, tea imports increased to 16,500 metric tons while local production dropped 2.5 percent to 19,800 metric tons. Taiwan has transferred tea-processing techniques to Vietnam, Indonesia, and Thailand in order to take advantage of these nations' lower labor costs, and the tea produced in these countries is usually exported back to the Taiwan market.
With a wide variety of fresh, beautiful flowers to choose from, Taiwan's horticulture industry has been flourishing in recent years. In 2001, its output value was US$345 million, while its export value was US$47.4 million. About 11,000 hectares of farmland was used for raising flowers in 2001. Flower farms usually devote half of their planting area to producing cut flowers, while the other half is used for orchid cultivation and nursery production. Major export markets include Japan, Hong Kong, and the US. However, a global economic recession reduced flower production in 2001, with dahlias and chrysanthemums experiencing the greatest drop in cultivation, decreasing 24 and 13 percent, respectively, from their 2000 production levels.
  Recreational Agriculture
  While traditional farm operations continue to be an economic activity, recreational agriculture is a relatively recent development in Taiwan. This new form of recreation for the busy people of a modern society integrates agricultural production, rural life, natural ecology, and local cultural resources. As of 2001, about 2,170 hectares of land had been officially converted into tourist farms, where visitors could pick fruits and vegetables themselves. As of July 2002, the COA had approved the establishment of 33 recreational farms in 12 counties and cities around Taiwan. Recreational farms are similar to tourist farms, but also offer visitors areas for picnicking, bird watching, and other low-impact activities, in addition to the opportunity to harvest their own agricultural products.

The COA provides assistance and counseling on recreational farm management and services. Domestic recreational farms have been encouraged to form strategic alliances and participate in international tourism exhibitions. An agrotourism website offers online information and services while Taiwan Agriculture Identity Cards have been issued to promote recreational agriculture.

As part of an effort to counter the impact of WTO accession, the Recreational Agriculture Guidance and Management Measures were revised in January 2002 to allow recreational farms as small as 0.5 hectare to be established, land to be re-designated for the construction of board and lodging facilities, and accommodations to be set up for visitors to farm residences.

  Fishing Industry
Over the past half-century, Taiwan's fishing industry has developed from small-scale coastal fisheries to deep-sea commercial fishing. In 2001, Taiwan had 128,000 fishermen households, 42 percent of which were engaged in coastal fishing, 26 percent in inland aquaculture, and 22 percent in offshore fishing. Taiwan's fishing fleet totaled 27,500 ships, of which 26,200 were powered craft, and had an annual catch of one million metric tons. Total fishery production, including aquacultural products, was 1.32 million metric tons in 2001, which represented a 3 percent decrease from the previous year.

In 2001, Taiwan produced US$2.7 billion worth of fish. Of this, 51.72 percent came from deep-sea fishing, 26.15 percent from inland aquaculture, 13.62 percent from offshore fishing, 4.77 percent from coastal fishing, and 3.71 percent from marine aquaculture. Deep-sea fishery production fell 10 percent from 2000 due to disruptions in international cooperation. Declining fish resources in the waters around Taiwan also contributed to a continuous decrease in coastal fishing, which dropped 6 percent in 2001. About 39 percent of Taiwan's total production was exported, with skipjack, squid, yellow fin tuna, and tilapia as the leading exports.

Taiwan's aquaculture has been growing steadily over the years. In 2001, aquacultural production was 313,000 tons, accounting for 24 percent of Taiwan's total seafood production. Taiwan's geography and climate are ideal for aquaculture, offering fish farmers tropical, subtropical, and temperate climates in which to raise a wide variety of fish. Even the North American rainbow trout can be cultivated in some of Taiwan's mountains. In 2001, aquaculture was conducted on 60,000 hectares of land and in over one million cubic meters of cage culture.

One of Taiwan's most important aquacultural products is eel, with an annual production of 34,000 metric tons, worth more than US$22 million. Other important aquacultural products in Taiwan include milkfish, tilapia, grouper, tiger prawn, giant river prawn, oyster, hard clam, and small abalone. Increased tilapia and milkfish production pushed inland aquacultural production up 25 percent, while marine aquaculture decreased 5 percent.