For Japan, entry into the Trans-Pacific Partnership (TPP) will seriously affect the country’s domestic agricultural production, with a predicted reduction in production value of about ￥3 trillion (US$32.2 billion) and a drop in Japan’s food self-sufficiency rate from 39 percent to 27 percent.
Despite this, Japanese Prime Minister Shinzo Abe’s government has announced its intention to participate in US-led negotiations on joining the TPP out of political, economic, trade and national security considerations.
One would think the news would encourage Taiwan’s government to more actively seek to join the TPP.
Although the finalization of talks on entering the TPP is a long way down the road, some government trade officials have said that once Taiwan enters, domestic agricultural production value will fall by about NT$70 billion (US$2.3 billion) — although they are a bit short on actual details.
The idea that the nation’s agricultural production will be hit to such a degree was denied by the government departments concerned, but by then, the damage had been done and farmers have started to worry. After all, official predictions are cold facts and the farmers are only human.
The importance of agriculture goes without saying. Even advanced economies feel the need to protect their farming industries. Experience tells us that, when faced with a global food crisis, and in unusual periods when the main food-producing countries ban food exports, a high GDP does not necessarily translate into food for people.
Our government is always reminding us of the importance of food security, but would rather splash out tens of billions of New Taiwan dollars in subsidies to get farmers to leave more than 200,000 hectares of farmland fallow, or keep rezoning large swathes of farmland so that industrial business areas or science parks can be built.
In some cases, land speculators are also buying up the land and putting it to non-agricultural use. This loss of productive farmland is gradually depleting the nation’s agricultural production areas. The farming industry is shrinking and many farmers are having to rely on non-farming sources of income or government subsidies to get by.
Farming in Taiwan is failing to adapt and if the domestic market for agricultural products is opened up, or import duties are slashed, the market is going to be severely affected.
It is important that the government departments concerned review this situation and come up with the appropriate policies so that the damage is kept to a minimum. This is not something that can be solved through sound bites from our national leaders: The government must act, not merely talk about the problem.
Even though Taiwan’s agricultural sector will not be one of the core issues in talks, either for signing free-trade agreements (FTA) with other countries or for joining the TPP, these agreements will have just as much of an impact on the industry as entry into the WTO had.
The questions that need to be asked are: Has the government done all that it can in devising its strategy to reduce the unfavorable impact FTAs are going to have on the industry, especially with regard to the scale of the industry, business models and the competition strategies it is to adopt going forward?
Has it done all it can to make sure the industry, given the current liberalization of trade, has the space it needs to survive and to grow, without having to rely on government subsidies?