Agricultural Export boom?

Agriculture was in the news this week. First the Council of Agriculture gleefully announced ag exports are rising:

The Council of Agriculture (COA) said yesterday that the overall value of Taiwan’s agricultural exports to China in the first 10 months of the year totaled US$536 million, up 26 percent year-on-year, thanks to a cross-strait trade pact and other incentives.

Taiwan's agricultural trade deficit with China fell, according to the COA:

As of October this year, Taiwan’s agricultural trade deficit with China was around US$110 million, and the projected figure for the whole year is US$140 million, much lower than in 2007, Chang said.

"Much lower than in 2007" wink, wink. That was Chen Shui-bian time, in case you missed that. The COA then goes on to make my bullshit sensor signal a five alarm fire:

In the Jan.-Oct. period, Taiwan farm produce exports to China, in 18 categories that were included on an ECFA early harvest list, totaled 14,242 tons at a value of US$95.7 million, according to Chang.

Ok, in the 18 ag product categories, there was a total gain of US$95.7 million. Now hold still, because a couple of paragraphs later come some numbers.

In the 18 categories, the sale of live groupers surged by a whopping 192 percent year-on-year to an export value of US$79.66 million, she said. Chang attributed the increase mainly to the ECFA “early harvest” tariff concession program and the opening of 15 Chinese seaports for direct shipping links.

So... maybe I am reading this wrong, but of the $95.7 million increase, $79.66 million is groupers. 83% of the increase is from one product! Add the number given by the spokesperson for tea exports, $7.37 million, and 90% of the gain is from just two products.  We're not succeeding in agricultural products, just in raising fish. Subtract that $79.66 million and the agricultural deficit sucks -- which shows how important definitions of what counts as agriculture are -- most people when they hear the word "agriculture" don't think of fish.

These numbers reinforce the point made a couple of months ago by academics written up in the Taipei Times, that most products on the "early harvest" list aren't benefitting from ECFA (discussed in the second half of this post).

Two other things jump to mind. First, the grouper benefits aren't going to Taiwan. As I wrote about months ago, big financial firms are investing in the grouper trade, pushing down prices received by producers in Taiwan, jacking up prices for grouper in China, pocketing the difference, and doing nothing for anyone's living standards. This is a purely parasitic application of channel power.

Second, I'd sure like to know about the effect of smuggling. Remember this?

With trade deficits across the strait on the rise, government efforts to crack down on smuggled Chinese agricultural goods into Taiwan are insufficient, Yang said, adding that the 67 tonnes seized by officials last year was only 1 percent of what was discovered in 2008.

I'd be curious to know what all those fishing boats are bringing back from Chinese harbors. Is increased smuggling shaving points off China's agricultural import growth by moving goods from formal to informal channels? There's no way to know.

In a bid to grab votes from the agricultural industry, DPP Presidential candidate Tsai Ing-wen was also out this week demanding that the government do something about awful fruit prices and excoriating the Ma Administration for the problems of the nation's agriculture industry. A couple of weeks ago a friend of mine and I rode the Rift Valley and all along the way we were deeply distressed to see good fruit simply rotting on the trees, unable to be harvested because prices are too low to make it worthwhile. The one goodie:

[Tsai] also proposed establishing a NT$100 billion agricultural development fund to modernize the sector and encourage younger people to work in the industry.

It would be great if we could get young people back into farming, but it feels like a pipe dream, with the price of land so high and wholesale prices so low, and farming so lacking in prestige.

Agriculture in Taiwan has been in the doldrums since the 1960s. It's a long-term problem, one that Tsai probably will not be able to make much progress on (and probably should be making carefully hedged promises about), and one that is not going to yield up a solution unless there are massive systemic changes in the way people think about food and its production in Taiwan.
_______________________
[Taiwan] Don't miss the comments below! And check out my blog and its sidebars for events, links to previous posts and picture posts, and scores of links to other Taiwan blogs and forums! Delenda est, baby.