The politics of agricultural exports

上一篇 / 下一篇  2017-08-11 11:58:27

Government-backed Taiwan International Agricultural Development Co is in talks with Japan’s largest trading companies and expects the nation to export large quantities of its “diamond pineapples” to Japan starting next year, the Council of Agriculture said.

The company also said that by early next year, the nation is to start selling bananas to Japan and Taiwanese banana farmers can expect to sell their product at twice the price of the Philippine bananas sold there.

A raft of other signs all point in the same direction: President Tsai Ing-wen’s (蔡英文) administration is focusing on Japan as the main export market for Taiwanese agricultural and aquatic products.

From a purely commercial perspective, the opening up of Japan and other markets to Taiwanese agricultural exports is good news — it will help regulate domestic supply and demand, and stabilize prices.

However, although farmers can sell their products in the Japanese market for a high price, they must also satisfy a large number of requirements, including passing testing and quarantine inspections, adhering to local standards and specifications, quality and safety requirements, maintaining a stable supply and adhering to Japanese packaging and labeling requirements, to name a few.

The exceptionally harmonious relationship between Taiwan and Japan means it is highly probable that the government is about to clinch these export deals.

If the nation is able to sign a free-trade agreement with Japan to eliminate tariffs on Taiwanese agricultural imports, it would help these products become even more competitive in the Japanese market.

For example, Japan imposes a 20 percent import tax on Taiwanese bananas, while bananas imported from the Philippines are only taxed at between 2.7 percent and 8.5 percent.

However, many of Taiwan’s agricultural products — such as pineapples and pineapples crossed with custard apples — are mainly exported to China. It is not a good idea to put all of one’s eggs in one basket, but this is the reality.

Considering farmers’ material needs, the government’s plan to extricate the nation’s economy from its over-reliance on China is being carried out behind the scenes.

When the time is right, the Tsai administration will no doubt make a public announcement, but for now it intends to keep its powder dry to avoid provoking a reaction from Beijing, which could decide to use agricultural products to pile further pressure on the government.

If this were to occur, it would damage Taiwanese farmers before their new export markets have a chance to get up and running.

Meanwhile, the Japanese government is acutely aware that with its shrinking population, annual consumption of domestically grown rice is falling by 80,000 tonnes year-on-year, while the production rate has stayed the same at 7.5 million tonnes per year.

The oversupply is to have a drastic affect on the income of Japanese rice farmers.

Furthermore, while China annually imports up to 5 million tonnes of rice from abroad, it is mostly from Vietnam, Thailand and Pakistan. China only imports 375 tonnes of Japanese rice per year, which equates to a paltry ¥160 million (US$1.45 million).

Last summer, Japan held an election for its House of Councilors — the upper house of the Diet. The ruling Liberal Democratic Party suffered a series of stinging defeats at the hands of voters in the main island’s northeast, where rice farming is an important part of the local economy. Party members blamed the Trans-Pacific Partnership for the loss of support.
Japan is about to hold an election for its House of Representatives — the lower house of the Diet — in which up to 1 million rice farming households are to vote. The nation’s officials are negotiating with China to increase Japanese rice imports to placate the anxieties of rice farmers.

Japanese officials openly say that the talks are tightly bound with political issues.

The Japanese market appears full of promise, yet there are just as many variables involved. The Tsai administration must act with caution and avoid becoming a bargaining chip in the negotiations of other nations.

Lee Wu-chung is an academic who specializes in agricultural economics.

Translated by Edward Jones






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