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China taking Taiwan¡¦s
markets
By Lee Wu-chung §õªZ©¾
International trade talks are all about giving and taking, but when the
Taiwanese government mentions the cross-strait Economic Cooperation Framework
Agreement (ECFA), it only talks about the good news. Not a single word has been
mentioned about any possible harm that the agreement could cause to local
farmers, nor has it said anything about appropriate government response
measures. Agriculture officials generally lack any crisis awareness or security
management and control abilities. However, it seems Taiwan¡¦s agricultural and
fishing industries are about to run into problems.
We have recently seen many media reports saying the grouper industry ¡X which has
been held up as a model example of the results brought by the ECFA ¡X is
flourishing no more. China has made major breakthroughs in terms of breeding,
cultivation and production techniques, and this has led to a sharp decline ¡X
more than 20 percent ¡X in the price of Taiwanese grouper on the Chinese market.
Taiwanese fish farmers are suffering big losses on their deliveries.
The latest available data shows that between January and October, 12,596 tonnes
of grouper valued at US$134 million were exported to China. That is more than 99
percent of all Taiwan¡¦s grouper exports. The volume exported to Japan, the US,
the EU and other main fish importers is tiny. Clearly this is not benefiting
long term development of the industry or in staking out a position on the global
market.
Government officials are, for the sake of short-term benefits and political
achievements, letting this situation continue.
This does not only apply to the grouper industry. The milkfish industry ¡X a
traditional Taiwanese industry ¡X signed a contract with China two years ago, but
because the fish has many bones, an unusual flavor and the industry lacks a
complete distribution system, Chinese consumers are not buying the fish.
The latest data shows that 7,324 tonnes valued at US$2.29 million were exported
to China between January and October, and the current market price has dropped
to NT$35 per 0.6kg. This is the lowest in three years. The ignorance of
officials will, in the end, only hurt disadvantaged farmers and fishermen.
Since China¡¦s production costs are generally lower than Taiwan¡¦s, their products
are more competitive. Although regulations on agricultural imports from China
have not been relaxed, these products have long found their way into Taiwan via
other Southeast Asian countries.
This nibbling away at the domestic market has already affected the livelihood of
farmers. If those who do not understand the situation rush to open Taiwan to
agricultural imports from China, the Taiwanese agricultural industry could
collapse, therefore, caution is required.
A few days ago, Chinese officials demanded that Taiwan abide by WTO regulations.
Agriculture officials later said Taiwan would allow imports of products from
China that are not produced in Taiwan or products that are already imported in
large volumes from elsewhere. These two statements caused panic among farmers
who said such deregulation would affect their livelihood or even cause the
industry to collapse.
The possible consequences of such a decision must not be ignored. The experience
of grouper and milkfish farmers should be a warning to the government that it
cannot allow the exportation of agricultural products to China. Doing so could
create excessive dependence on the Chinese market, seriously jeopardizing
national food security.
This is why the government ¡V¡V based on political, economic, trade, quarantine
and food security factors, the particularities of agricultural products and
financial management issues, should initiate structural adjustments and
upgrading of the agricultural industry before allowing wider deregulation of the
domestic market.
The government must not sacrifice farmers for the sake of the bigger picture.
Lee Wu-chung is a professor of agricultural economics.
Translated by Perry Svensson
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