The Council of Agriculture (COA) has decided to focus on its export guidance and assistance efforts in order to boost the competitiveness of Taiwan fruits. Those efforts will be directed primarily at the production of 10 kinds of fruit: mango, banana, litchi, oranges and tangerines, papaya, pineapple, grapes, pomelos, starfruit and wax apple. The COA has asked agricultural experts from the Bureau of Animal and Plant Health Inspection and Quarantine, the Agricultural Chemicals and Toxic Substances Research Institute, Agricultural Research Institute and Agricultural Research and Extension Stations to form a technical and consultative task force to design a model for a high-quality production farm for those fruits and to publish a guidance handbook for farmers.
These measures are all part of the COA plans “Increasing Global Sales of Agriculture Products” that also seeks to encourage market diversification.
“We do this by supporting marketing and promotion activities done in overseas markets, working to eliminate tariff and non-tariff barriers, helping build supply chains for fruit exports, providing export information and training manpower for agriculture product exports,” says COA Minister Lee Ching-lung.
“We would like to promote the export of high-quality and high-value agriculture products to markets whose consumers have high purchasing powers and not simply to export agriculture surplus.”
After the implementation of the plan, Taiwan’s exports reached US$3.55 billion in 2004, a 10% increase over 2003. Bananas are the most important fruit export for Taiwan. In 2004, its export value reached US$10.3 million, 30% of the total fresh fruit exports of US$33.82 million. Mangoes made up 14% (US$4.82 million), litchis 13% (US$4.52 million) and all kinds of oranges 12% (US$4.17 million).
Japan, the United States and Southeast Asia are the main export destinations due to quarantine measures and limitations on the means of transporting fresh fruits. In 2004, Taiwan exported US$14.2 million worth of fresh fruits to Japan, 42% of the total. Exports to the U.S.A. were worth US$7.6 million (23%) and merely US$340,000 were exported to Mainland China, 1% of the total.
“We don’t reject exportation to Mainland China,” says Mr. Lee “but some people have misrepresented and twisted our original policy. We are doing what we can to support farmers who would like to develop their Mainland Chinese market.”
The whole world looks highly at the Mainland Chinese market. But according to the COA minister, we have to look at a foreign market’s export entry threshold. “This reflects its demand for quality and consequently the prices that market is willing to pay for the product quality,” he says. “The Mainland Chinese market threshold is very low while that of Japan’s is very high.”
While the Taiwan government has never opposed exportation to China, it does not consider that market as having much potential. Moreover, China is world famous for infringing on intellectual property rights. They could declare that some of their agricultural products are made in Taiwan and mislead consumers.
“This is why we still think Japan, the U.S.A. and Europe are more stable markets; their demand for quality is high and therefore they pay higher prices,” says Mr. Lee
How does the government plan to further encourage fresh fruit exports?
The Agriculture and Food Agency of the COA will promote total quality control in the production and export of three kinds of fruits: mangoes, papayas and bananas. These three will lead the way in the establishment of a production and marketing record system that traces the path of a fruit from production to the post-harvest processes of packaging, transit, wholesale distribution and finally retail sales. Each item will have a number that can be utilized by international organizations in tracing how a fruit was produced. Such a system would boost the sustainability of fruit exports. The seven other kinds of fruits will go through the same process that will eventually be extended to other agricultural products.
“This is one way of building supply chains and promoting quality control throughout the export process,” Mr. Lee says.
After joining the WTO, Taiwan’s agricultural production value rose by 5 percent. This is because, prior to joining WTO, exports were restricted. But agricultural products exports were liberalized after joining the WTO.
“The increase in production value and demand for our products show that Taiwan’s high-quality and safe agriculture products still enjoy a high level of competitiveness in the world market,” says Mr. Lee.
For Taiwan, joining the WTO is an opportunity and also a challenge. Small farms are the norm in Taiwan. The average size of land cultivated is 1.1 hectares. A single farm can never have price-setting power and will have to negotiate the price with buyers. If they could ally and bond together to supply agricultural products, they could have a price-setting capacity.
“President Chen has requested the Taiwan External Trade Development Council (TAITRA) to establish an Agricultural Department to provide farmers with information and organize international exhibitions. Every year, the COA cooperates with TAITRA in organizing exhibitions. This is one way to help our farmers enhance their competitiveness,” says Mr. Lee.