Wednesday, November 17, 2010

Taiwan and Food Security

Every day we put food in our months here on The Beautiful Isle, but seldom think about how dependent Taiwan is on the global food economy and on global markets. The obstreperous, intrusive presence of global food chains like Mcdees highlights, without illuminating, the reality of how dependent Taiwan is on imports of food.

Imagine if I ask you, as I asked my class today, to estimate, just quickly on a piece of scratch paper, what percentage of food across the various food categories consumed in Taiwan is actually produced here. Consider these categories: cereals, potatoes & similar, beans & nuts, vegetables, fruit, meat, eggs, milk & related, fish & shellfish, sugar & related, oils & fats. What percentage do you think comes from home?

Here is the actual table:

A recent paper on food security issues in Taiwan noted:
In Taiwan, the per capita food consumption in terms of energy was 2,821 kilocalories per day in 2007. This level of energy for a population of 23 million was equivalent to 22,357,000 metric tons food and was composed of cereals 88 kg (including rice 47 kg), vegetables 103 kg, fruits 128 kg, meats 74 kg, milk 20 kg, eggs 17 kg, sea-food 37 kg, and oil and fat 25 kg.
It also observed:
Taiwan’s food self-sufficiency ratio is only 30.6% weighted by energy in 2007, which is almost the lowest among East Asia countries.
The foods that give us energy, fats and carbs, mostly come from outside Taiwan. As the Taipei Times noted back in July:
The Agriculture and Food Agency’s latest data show that domestic production of crops, including rice, wheat and corn, in 2007 totaled 1.18 million tonnes of Taiwan’s total consumption of 7.6 million tonnes of these crops.
Even where Taiwan performs well, in seafoods, this performance is an illusion. Most fish taken by Taiwanese fishermen are actually taken far from the seas around Taiwan. Even in its most successful area, Taiwan again depends on global agreements and understandings about the use of the sea.

Looking at food tonnage, in 2007 Taiwan imported 12,142,000 metric tons of food and produced another 10,930,000 metric tons, according to the article cited above. Note also that not all the food produced here is consumed by humans. Food for feed was 5,267,000 tons; for manufacturing, 2,463,000 tons; gross food, 13,766,000 tons; and for seed and waste, 862,000 tons.

Table 17 from the FFTC above shows the stark dilemma the government faces:

Consider the issue from the perspective of a government planner. Taiwan is absolutely dependent on exports to survive in the most basic sense -- in order to import food Taiwan must generate export earnings. Look at the total exports of industry and agriculture in columns A and B, and recall that in Taiwan agriculture accounts for a mere 1.5% of GDP but occupies 22% of the island's land area. Now imagine that you, Mr. Government Planner, have a piece of land in mind. You can let it remain agricultural, or you can build a hi-tech factory on it. If you put in the factory, that plot of land will generate so much revenue that you can devote a portion of it to importing food and still retain a healthy surplus and eat better than you would have if you had left it in crops. Whereas if you kept it in crops, it would generate far less revenue and actually provide an income and food to fewer people. If you, like most economic bureaucrats, are focused on GDP boosting, agriculture will always come in second, an annoying impediment to further GDP growth.

Of course, agricultural land offers numerous other benefits. But in the narrow "cost/benefit" calculus bureaucratic decisionmakers are so fond of, these benefits are ignored.

Huang et al, the paper I instanced above, lists a number of issues facing food security and production in Taiwan. First and most critical is the island's low level of food self-sufficiency. Taiwan is terribly vulnerable to spikes in the price of food -- recall that in the wheat crisis of 2008, hundreds of small bakeries around the island closed. Second, average farm size in Taiwan is small, less than one hectare on average (US = 190 ha). This is conventionally thought to impair productivity, though the conventional ideal for raising productivity is more mechanization, not sustainable cultivation, permaculture technology and similar. Third, Taiwan's farming population is aging. The average age of farmers is 58. Older farmers "tend to be less efficient and more likely to depend on subsidies". Fourth, Taiwan is impacted by rising prices for fertilizers and other inputs to farming. Fifth, the world food economy is changing with the rise of India, China, Brazil, and other nations, which create both new sources of supply and new demand. As incomes rise in populous, productive nations, they push up food prices globally. Finally, global warming with its concomitant shifts in rainfall, rise in natural disasters, and changes in climate and planting seasons, is already impacting Taiwan.

One unique way the global market affects Taiwan: because Taiwan is must purchase imported rice under its WTO agreements, it has in recent years permitted 200,000 hectares of land lie fallow to keep rice prices up. In 2008, with the crisis in the grain markets, the government began a program to get farmers to grow corn on the fallow land.

What is the government's food security policy? There isn't one. A Taipei Times editorial described:
The annual administrative guidelines drawn up by the Executive Yuan since the Ma administration took office in 2008 do mention the idea of maintaining food security, but only briefly.

The Executive Yuan says in its guidelines that it will “revive fallow farmland and adjust the production and sale structure of rice in a bid to ensure food security.”

Unfortunately, that is where all mention of food security ends.

There are not even independent sections outlining the government’s food security strategy in the Executive Yuan’s annual administrative goals.

The editorial correctly calls for a formal White Paper on the issue. The lack of a food security policy for an island threatened by both invasion and blockade, and heavily dependent on international markets for food, is a serious problem that threatens the security of the entire nation.
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1 comment:

Okami said...

Hey I topic I pay a lot of attention to, shame it got bumped to the bottom by all that much less interesting stuff.

Taiwan and pretty much the rest of the world has a serious food problem coming up and it's basically going to effect everyone everywhere in really bad ways.

-Farming worldwide is a heavily subsidized occupation with sometimes gross inefficiencies. Subsidized industries tend to do a lot worse business wise than unsubsidized businesses. This also leads to govts also setting food prices further worsening the situation.
-Farming is time, labor, capital and mentally intensive. People who go into farming either tend to be people who were born into farming or people who romanticize it. You saw this with the organic farm boom and bust in the US.
-Farming to be profitable either has to rely on cheap, often imported, labor or mechanization.

So why should your average Taiwanese person go into farming, when the distribution is govt controlled, land is expensive and you have very little access to cheap labor and the smallness impeding mechanization? Then you have the situation where a place like Hualian for large scale cereal production basically has no transport links to move the cereals for further processing and distribution.

I'd also add that you fail to mention the bio-fuels mandate. I believe the Euros just set a new mandate that will require the space equivalent to Belgium be used to grow the crops for bio-fuels.

That's all before you get into the capital intensive part of it. I'd think that if you looked at it from a ROI perspective that you'd find that farming was a loser return wise compared to relatively safer investments.

Oddly I didn't see anything for mushroom farming. This actually has a great ROI and low capital costs and excels in Taiwan despite it being monopolized.