ECFA = Negative Benefits

Gravel operation moonscape on the Dajia River.

I love that phrase, negative benefits. Farmers groups complaining about what everyone knows -- food smuggling from China is rampant (Taipei Times):

The associations highlighted statistics released by the Coast Guard Administration (CGA) showing that smuggled produce confiscated during the Lunar New Year holiday — when smuggling operations peak — dropped 80 percent last year compared to 2013 and stood at just 0.6 percent of the 2008 level.

The farmers said that there is still a huge quantity of smuggled produce on the market, and accused President Ma Ying-jeou’s (馬英九) administration of colluding with smugglers working with Chinese.

Statistics released by the coast guard show that the volume of illegal agricultural products smuggled from China fell from 6,632 tonnes in 2008 to 57 tonnes in 2011, before dropping further to 41 tonnes last year.

Everything about the article suggests serious collusion to destroy local Taiwan producers. For example, take tea leaves:

No Chinese tea leaves have been confiscated since 2011, when authorities discovered two tonnes of contraband.

Taiwan Tea Farmers Self-help Group chief executive officer Chen Chien-nung (陳鑑農) said the coast guard had failed to intercept smuggled Chinese tea leaves over the past three years.

“You can find as many Chinese tea leaves as you want in the marketplace,” Chen said, adding that if the Ma administration requires proof, he could immediately provide evidence.

He said that most tea circulating in distribution channels is brewed from Chinese tea leaves, which leads him to believe that at least two freight containers, or 36 tonnes, of Chinese tea leaves disguised as being from other countries are being smuggled into the nation on a daily basis.

"No Chinese tea leaves have been confiscated since 2011..."

One of the reasons the services pact is so unpopular is widespread awareness of these issues. In order to secure even limited public support for ECFA, the Ma Administration had to put Chinese agricultural products on a banned list. The Administration's answer to this problem appears to be to serve Beijing by turning a blind eye to smuggling. Taiwan importers use third party routes, which the government must surely be aware of. For example...

The smuggled tea leaves were first shipped to a third country, such as Thailand and Singapore, before being transported to Taiwan, where they were mixed with locally produced tea leaves and then processed into oolong tea, green tea and jasmine tea before being sold to unsuspecting customers.

An investigation found the unscrupulous business people had carried out 50 smuggling trips, shipping around 1,000 to 2,000 metric tons of cheap Chinese tea to the island, prosecutors said.

Moreover, this is not a new problem. I stumbled across this piece about the 1980s:

It appears that smuggling tea in from the mainland is causing major difficulties for established processors. Those who respect the law and don't deal in mainland tea are at a major disadvantage. Processors and retailers have been urging the government to reconsider the current ban and legalize mainland imports. It is significant that, of the legal imports of 565 tons in 1985, 95% was fermented and semi-fermented tea and only 5% green tea. By 1989, of the total 1,333 tons imported, 29 % was green tea. It is highly likely that this tea originated from the mainland.

Given the massive jump in smuggling from ECFA, coupled with the amazing fall in enforcement of smuggling laws, it should be obvious what the consequence of the Ma Administration's proposed Free Economic Zones will be. Those clunkers out of the 1960s would permit Chinese agro-materials to be processed in zones with little oversight, once again spurring massive increases in smuggling. The government's policy called for a formal lifting of the ban on the over 800 agricultural goods currently not permitted to enter Taiwan (TT) so that they could be processed in the zones -- with the government laughably claiming that goods made with materials on the forbidden list wouldn't be permitted to enter Taiwan. As if the government could or would stop them...

This knowledge is one reason Taiwanese rejected the CSSTA pact. They know perfectly well that letting in China in X amounts means that in reality X + SMUGGLING will enter. Hence any statistical claims about the effects of the agreements are meaningless since they never take the illegal trade into account.

One reason I find westerners who are boosters of ECFA so detestable is precisely their simpleminded, deliberate neglect of this destructive issue, their refusal to face what increased trade with China has meant for Taiwan and the health of its people and its economy. Such boosters, as in the Drysdale piece I linked to below, invariably neglect the military and political threat as well, as if trade with China were like trade with Canada or Thailand. As the TT article above notes, prices of tea buds in Taiwan have plummeted. This forces local tea farmers who would rather not to use Chinese teas if they want to stay in business and remain cost-competitive, while at the same time destroying the made-in-taiwan brand value. It is hard for me to see that outcome, easily predictable since adulterating Taiwan teas with cheap Chinese crap teas is a habit that dates back to the 19th century, as something other than a deliberate policy. A policy that extends to many areas of the economy...
____________________
Daily Links:

• EATS Young Scholar Award
• DGBAS growth forecast to 3.78%
• Ma Administration/MOE war on Taiwan history thumbnailed in this Taipei Times editorial
• The always good Danshui history blog: watermelon of Taiwan
• Drysdale at EAF: Can Taiwan survive in the shadow of China?

_______________________
[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!

Pilot Zones: Does Ma government plan to destroy Taiwan agricultural products?

As you can see, the number of people identifying as "Taiwanese" is reaching record highs, just as the number of people identifying as Taiwanese-Chinese and Chinese is reaching record lows. This is from the former political warfare university, but my experience is that it is pretty close to reality. Among the young even more would identify as Taiwanese. 

The free economic zones are looking more and more like a plot to flood Taiwan with cheap China crap and destroy its agriculture. A few days ago, after noting that the government is attempting to focus the discussion on trivia, a piece in the Taipei Times observed that Taiwan's competitiveness lies in its ability to distinguish itself from other places:

The heart of Taiwan’s agricultural competitiveness lies in technology, management and certification, because this is what allows it to produce the high-quality agricultural products that make Made in Taiwan (MIT) products so popular overseas. It took many people many years of hard work to achieve these results, and it is the only thing that allows Taiwan to resist competition from cheaper agricultural products from other countries in face of ever-increasing market liberalization.

So what's the current KMT government proposal? To destroy all that has been carefully built up:

Under the proposed project, which is stalled in the legislature, 830 agricultural products from China banned from being imported to Taiwan would be allowed to enter the pilot zones to be processed as food products.

[Council of Agriculture head] Chen rejected the idea that food products made of agricultural materials imported from China should bear labels indicating the origin of the material to distinguish them from those made of Taiwan-grown agricultural ingredients.

Chen even said that "People should not view liberalization as a scheme to destroy the nation’s agricultural sector" which is basically a giant neon sign pointing out what the pilot zone scheme is.

I've talked before about how the Ma Administration deploys neoliberal rhetoric to advance the annexation of Taiwan to China politically and economically. Here is a good example. The government terms this policy of letting in Chinese agricultural products into the pilot zones and not labeling their origin "liberalization." But that "liberalization" is a policy that can only benefit China, not Taiwan. Taiwan's agricultural reputation comes from its ability to distinguish itself from its neighboring nations -- but this proposal obliterates that crucial competitive edge of Taiwan. The only reason for not clearly labeling the origin of ingredients is to obscure it and benefit China -- no other reason exists. Thus, in the rhetoric of the Ma Administration, subordination of Taiwan to China's interests = liberalization.

Let's hope the DPP can really run with this in November.

TT has run some good pieces on the pilot zones recently. Here's a comparative discussion of the mixed results from such zones.
________________
Daily Links:

• SPECIAL: Taiwan academic creates fake IDs, sets up citation ring, 60 papers retracted from one journal. 60 papers is absurd overkill. Publication pressure means that there will be an endless supply of this here. One function of the terrible pressure to publish in top journals is that Taiwan academics are less likely to be involved in social causes related to their fields. Thus the political function of publish or perish is to suppress academic activism. But get this: the MOE head Chiang Wei-ling is named on some of those papers. Apple Daily has the call. It could be that he was involved, or it could be that he was framed, or it is just a coincidence of names.
• Ben laffs at the KMT's Keelung mess and the blatant hypocrisy of the KMT's election field. Huang Ching-tai's abuse of the KMT is hilarious: saying the only place it can win in the north is Keelung. LOL. Bottom line is he will run as an independent if they can't buy him off somehow, hurting the KMT's chances in Keelung.
• Activists from Hong Kong, Taiwan, get together online
• Aussie paper on connections between White Wolf, PRC leadership. Stunned.
• WSJ blasts Hong Kong firms who scold the democracy movement there.
• German director makes 40 minute propaganda film on why China owns the Senkakus. View purely for comedy, it is both sick and hilarious. I'll do a post on it next week. Link on Youtube here.

_______________________
[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!

Taoyuan Pond Ride

A while back I wrote a post about the Ponds of Taoyuan which I've always liked and which inspired me to contemplate riding around and photographing the ponds. You should read that post as a backgrounder to this ride. With that post in mind, this Thursday I took the HSR up to Taoyuan to get some pics of these historical sites. For a camera, I took only my trusty Powershot S95. Click on READ MORE below in order to, well, read more.

Commonwealth: ECFA will destroy Taiwan's agriculture

Jialeshui's lovely carved rock seashore.

Commonwealth magazine had a great piece last month on China's inroads into Taiwan's agricultural markets. Some highlights:

"In 2002, Taiwan's deficit with China exceeded US$300 million, but the gap gradually narrowed after 2008 to US$38 million last year. In 2012, Taiwan imported agricultural products worth US$827 million from China, a 6 percent increase over the previous year, while agricultural exports to China – mainly specific farm and fishery products – totaled US$789 million, 17.7 percent more than in 2011."

Note that -- in 2002 under the Chen Administration, Taiwan was running a $300 million annual agricultural trade deficit with China, but the media was filled with yammerheads claiming that Taiwan wasn't "open" to China under Chen. However, Commonwealth points out something I posted on a couple of months ago....

A big chunk of Taiwan's agricultural exports are politically driven purchases made by Beijing to win support among the island's rural population, meaning the products do not need to stand the test of market forces. On the other hand, China has been able to deeply penetrate Taiwan's market and gradually gain market share because of its economies of scale and competitive prices.

These political purchases have one additional important effect, as I observed...

While much of the hype focuses on alleged benefits Taiwan receives from more closely aligning itself with China, one more important aspect of the drive, never discussed in the international media, is the way closer China links are parlayed into greater support for the KMT at the local level. Stronger links to China means, essentially, more links between Chinese money and KMT officials at the local level. People often assume the south is Green but it is more like a checkerboard -- the local level officialdom is often KMT, and more importantly, the local institutions of agriculture -- mill ownership, ag and irrigation cooperative officials, marketing firms, and so on, are more likely to be KMT. China's cooperation with such individuals helps increase the strength of their local patronage networks and improve their political prospects. Just as the Taiwanese moving their small factories to China was a way to preserve the system of family ownership and competition on price and avoid upgrading to modern management methods, so the KMT's move toward China is a way to avoid political change and preserve KMT power. China is the Vishnu of the Taiwanese sociopolitical world, ruling by preserving.

In this system of trade, gains by Taiwan are gifts of Beijing, gains for China come at the cost of local farmers. Commonwealth observes:

The import tide is most obvious for tomatoes, cauliflower and peas. Over the past decade, tomato imports from China increased more than 20-fold, and imports of cauliflower and peas tripled. At the same time, Taiwan's domestic production of string beans (snap beans) and peas dropped by half.

In 2011, 5,077 tons of string beans, the equivalent of 40 percent of Taiwan's total string bean production that year, were imported from China, reflecting the substantial degree to which imported vegetables from China have begun to substitute locally grown produce.

"Taiwan's farm exports to China mostly consist of high-priced grouper and fruits, but most Chinese imports are fruit and vegetables that people eat on a daily basis. This will no doubt have an impact on Taiwanese farmers," warns Chen Chi-chung, a professor at the Department of Applied Economics of National Chung Hsing University, who hails from a farming family in Wandan, Pingdong County in southern Taiwan.

Indeed. In the markets retailers invariably claim their items were produced in Taiwan, but it is hard for me to believe that, unless I know they themselves grow their produce. Unfortunately smuggling must also be enormous, but few report on that, and certainly not our ECFA-infatuated international media. Avoiding toxic Chinese goods is a constant struggle in my weekly trips to the market, never mind restaurants, which must rely on cheap produce to keep prices down in Taiwan's small eatery sector.

According to the piece, Taiwan also imports tea equal to one-third of the island's production (total Taiwan tea imports are nearing twice local production, according to the article). Imports on this scale lead to other issues. One common problem I've heard about in many areas of Taiwan food production is adulteration by Chinese products to stretch the local products. For example, hypothetically, in an area famous for shiitake mushroom production, the big bags of shiitake mushrooms sold in shops in the area might be only 80% or 60% local, the rest being Chinese mushrooms, with no labeling, of course. This impacts both the brand image of local goods and the brand image of Taiwan itself. This has been recently exposed in the honey trade, where tainted and toxic Chinese honey is repackaged as Taiwan or Malaysian honey. In markets vendors sell preserved and dried goods such as nuts and fruits, which they bag for you on the spot. These are, the media assures from time to time, products that originate in China.

The Commonwealth article suggests clear country of origin packaging, including information on the ratio of materials by country of origin, but long experience with labeling in Taiwan (rice noodles, for example) and the regulatory regime here suggest that manufacturers will easily be able to ignore or circumvent restrictions.

The scholar interviewed in the Commonwealth article also pointed out that because Chinese products originate in disease and vermin-infested areas, quarantine and inspection systems must be enhanced and extended. Good luck with that.

In the long term, the article suggests expanding value chains for agricultural goods, specialty production under long-term contracts that guarantee prices, and educating consumers to buy Taiwanese. But none of these really address the problem that we consumers who actually live here must face every day: avoiding toxic Chinese goods in our daily fruits and vegetables.
_______________________
[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!

Twofer from Commonwealth: rice and nukes

Went to the bike show in Taipei this friday to drop in on friends and ogle the gear. Great time. Expecting full report on the show from Taiwan in Cycles tomorrow!

Commonwealth Magazine has two excellent articles this week, one on political rice buying by China that explains why ECFA has neither benefited the south nor changed hearts and minds, the other on the fourth nuclear power plant. On rice, discussing how China early on adopted a two pronged strategy, one to win the hearts and minds via purchases, the other to strip mine Taiwan's agricultural know-how.....

This January, Wang Zhizhong twice visited Houbi District – the major rice producing area in the Jianan Plain – accompanied by Taiwan's former Minister of Justice, Liao Cheng-hao. Also in Wang's entourage were high-ranking officials from the Cuxiong Yi Autonomous Prefecture in Yunnan Province.

....

During each of his four visits over the past two years, Wang went directly to Taiwan's agricultural areas, meeting with representatives of production and marketing teams, farmers' cooperatives, as well as fruit and vegetable wholesalers. He also visited farming families in Jiayi, Tainan, Kaohsiung and Pingtung.

"These were special fact-finding itineraries to get the real picture of Taiwan's agricultural industry," explains ex-minister Liao, who accompanied Wang on all his visits to Taiwan.

Chinese officials not only want to understand the industry, they also want to import knowledge in the form of farming advisors and farming technology. Wang, who commands a vast interpersonal network in China, is planning to develop a plot of land of 4,300 hectares – roughly 165 times the area of Da-an Forest Park in Taipei – in Chuxiong Prefecture's Yuanmou County into a model zone for cooperation in high altitude organic agriculture between Yunnan and Taiwan. The project is explicitly defined as a cross-strait agricultural cooperation zone.

The piece also gives some numbers on the "hearts and minds" campaign...

Council of Agriculture (COA) statistics show that in June last year, after China gave the green light for rice imports, Taiwan exported a total of 773 tons of rice to China, about 25 percent of the island's total rice exports. This made China the largest buyer of Taiwanese rice alongside Hong Kong.

Taiwanese rice is not exactly an export hit. Although officials pride themselves on exports to 27 countries, total exports reached just 1,900 tons in 2011. With China added as a new buyer, rice exports soared to 3,100 tons last year. But this is still a far cry from 140,000-ton rice quota that the Taiwanese government has approved for export per year. Clearly Taiwanese rice could use more overseas buyers.

More.... the amounts....

COA statistics show that Taiwan exported rice worth US$1.32 million (about NT$39.6 million) to China last year. But local rice farmers feel that they do not reap any tangible benefits from exporting to China.

To put that tiny number in perspective, from my post on how the government is trying to encourage the hearts and minds switching to support of closer relations with China, the Council on Agriculture observes:

Of these, items on the ECFA early harvest list such as bananas, hami melons, lemons, oranges and red dragon fruits accounted for US$1.38 million,

Miscellaneous fruits are a bigger seller in China than rice politically purchased! The sum is simply too tiny to have any political effect.

The problems of China's approach are further laid out: the purchase and distribution system ensures that profits don't return to the farmers or even the local rice mills, but rather come to distant middleman, as we have already seen with other aspects of this trade:

This can be attributed to the way in which Taiwanese rice is distributed and marketed. Normally, farmers sell their entire harvest to rice mills, which process and sell it on to distributors. Rice destined for export to China is usually sold to the rice mills at the same price as rice for domestic sale; the farmers themselves do not earn a single penny more.

At the same time, the rice mills sell to Chinese distributors at the same price as domestic rice dealers. Therefore, the rice mills also do not earn more from selling to China.

How the system really works, and a hint of one of its real purposes, is laid out in these paragraphs....

"Chinese officials mostly come here to buy rice to build connections with Taiwanese county and city governments or local communities," observes Wu Yuan-chang, head of the Taiwan Province Rice and Cereals Association. He believes that Chinese rice importers only want to make their higher-ups happy and that after reaching China the Taiwanese rice will not find its way onto supermarket shelves due to a lack of distributors.

.....

This past January, Liu Gui-miao, a former Tainan County councilor for the ruling Kuomintang and now marketing manager of the farmers' cooperative selling Chamuying Rice, sold 1,632 2-kg. bags of rice to the Foshan City government, a deal facilitated by the Tainan City Straits Economics and Trade Cultural Development. Upon import into China, the bags of rice were used as official gift packs or hand-outs to low-income families.

"They repackaged the rice into 289 gift packs and gave them to government officials. The rest was used as food aid for distribution to low-income households," association secretary general Lu Ai-hua, who formerly served as the chairman of the now abolished Yongkang City Council. In March, Lu will visit China again, hoping to land bigger orders in Luohu, the gateway between China and Hong Kong on the China side.

While much of the hype focuses on alleged benefits Taiwan receives from more closely aligning itself with China, one more important aspect of the drive, never discussed in the international media, is the way closer China links are parlayed into greater support for the KMT at the local level. Stronger links to China means, essentially, more links between Chinese money and KMT officials at the local level. People often assume the south is Green but it is more like a checkerboard -- the local level officialdom is often KMT, and more importantly, the local institutions of agriculture -- mill ownership, ag and irrigation cooperative officials, marketing firms, and so on, are more likely to be KMT. China's cooperation with such individuals helps increase the strength of their local patronage networks and improve their political prospects. Just as the Taiwanese moving their small factories to China was a way to preserve the system of family ownership and competition on price and avoid upgrading to modern management methods, so the KMT's move toward China is a way to avoid political change and preserve KMT power. China is the Vishnu of the Taiwanese sociopolitical world, ruling by preserving.

The Commonwealth piece also points out that the political rice is not distributed in China where it would cause trouble for China's powerful grain interests. Such Taiwanese rice as is sold on actual store shelves in China gets there via private marketing arrangements, and is largely a niche market, as the last page of the piece discusses. The political rice has neither stability nor order volume, two keys to maintaining and expanding markets. As Commonwealth observes...

Two years ago China began purchasing milkfish from Taiwan under contract, a move also intended to win the support of local fishermen. But in the end prices and order volume proved difficult to maintain.

The rice campaign was focused on Tainan; so was the milkfish campaign. The actual amount ordered for last year was US$4.45 million (source). Here's a piece from Dec 2012 full of promise, but I can't find anything on subsequent milkfish orders. Surely FocusTaiwan would be bragging...

The nuke piece is also quite good. It's full of interesting claims:

Dealing with nuclear waste has even become a hot-button diplomatic issue. A report published in the American journal New Scientist noted that there are 437 nuclear power reactors in 31 countries around the world, but not one repository for high-level radioactive waste.

Spend some time with it.
_______________________
[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.

Government still selling ECFA as Ag boon

Future exports under ECFA?

The government is still pushing the ECFA = Agricultural Export Increases! line, still trying to sell ECFA as a big boost to Taiwanese agriculture (a 2011 review of that drive) and change some minds in southern Taiwan. Though, I also wonder if they are trying to lay the groundwork for opening up to agricultural exports from China, which would likely be devastating: "See how competitive we are? It's safe to flood the island with melamine melons and stuff from China!"

The latest round in this effort was out on the intertubes via Taiwan Today.... noting that 2012 ag exports rose to US $5.08 billion (8.8% YOY rise), the piece attributed that to ECFA. But wait... what's our top market? Well, it says Japan, but actually Taiwan splits Hong Kong from China... meaning that 25% of our exports go to China.

“Agricultural products posted the highest growth at 14 percent, while Japan was the country’s top export market at 21.1 percent followed by mainland China, 15.5 percent, Hong Kong, 10.1 percent, and the U.S., 9.3 percent,” a Council of Agriculture official said March 18 in a statement.

Fresh fruit exports reached US$62.02 million, down 0.6 percent year on year but up 51.7 percent from 2007. The official attributed the drop to reduced output and price increases following typhoons.

“But cross-strait direct flights saw fresh fruit shipments to mainland China jump 42 percent to US$15.39 million. Of these, items on the ECFA early harvest list such as bananas, hami melons, lemons, oranges and red dragon fruits accounted for US$1.38 million, surging 71.4 percent compared to 2007.”

Think about the numbers the COA gives there. Total exports: $5.08 billion. Fresh fruit shipments to China jumped to.... $15.39 million. Like 0.3% of total exports? It's less than a rounding error. But here the COA is, still pushing the ECFA = Big Ag Boost! claim using increases in fruit sales....
_______________________
[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.

Ecch Faux Stats

Taiwan Today hosted another one of the government's claims of triumph for ECFA this week.

The Cross-Straits Economic Cooperation Framework Agreement (ECFA) is paying handsome dividends for Taiwan, spurring significant tariff savings and business growth, according to the ROC Ministry of Economic Affairs Dec. 22.

The article goes on to give "details" about the great economic growth under the ECFA Cargo Cult regime. But first I thought I drag out overall numbers so we could get a feel for ECFA's effect on the exports to China. Here are the numbers for 2004-11 for value of exports to China in million$ (DGBAS):

YR
04 36,349
05 43,644
06 51,809
07 62,417
08 66,884
09 54,249
10 76,935
11 83,960

The pact came into effect in Sept of 2010. Here are numbers through Oct for 2012 (million$):

J 5,261
F 6,486
M 7,114
A 6,822
M 6,922
J 6,528
J 6,762
A 6,673
S 7,223
O 7,167

Ten month total: 66,957

Assuming we get $8,000 million for Nov and Dec, that would put 2012 at $83 or $84 billion. Roughly the same as last year. Of course, the global economy is in a nasty sustained downturn thanks to the austerity insanity in Europe and the total indifference of American elites to the fate of the US economy and the individuals who inhabit it, so we shouldn't be expecting too much anyway. But let's graph these numbers so we can view the trend line:

I had Excel put in the trend line on this quick-n-dirty chart. It's obvious even to the Mark I eyeball that the numbers for 2010 and 2011 and 2012 lie on the trend line (in fact slightly below where we would have been had the trend for 2004-07 continued). If ECFA were really that awesome what we should see is a spike after 2010, with the years 2005-2008 lying clearly below this simpleminded trend line. BUT: Remember that (1) in 2009 the economy collapsed and it was still recovering in 2010 and (2) numbers like this tend to level off and become stable over time. What stands out, really, is how deeply the Great Recession scored the global economy. It's a relief to know that the Obama Administration jailed all the bankers and instituted a tough new regulatory regime like any sane and competent government would do, isn't it? O wait....

Anyway, the Taiwan Today piece gave some more breathless numbers:

The latest MOEA statistics show that from January 2011 to October this year, the ECFA generated US$551 million in tariff savings for local firms and farmers.

Jan 2011 through Oct 2012, tariff savings of $US 551 million on a hair over $150 billion in exports to China.  That means that the total savings are roughly 1/300 of the export total. How big can the effect be? After all, shifts in the value of currency, labor costs, or inflation are much greater...

In case you were wondering about the trend for 2012 through November, exports to China are down 5.5%, to ASEAN 6 up 9.3%, and to America down 10%. Yay ECFA!

We then get some numbers in percentages....

For the first 11 months, agricultural exports to mainland China were US$146 million, up 36.47 percent year on year. Oranges, live groupers and tea leaves top the list at 103.76 percent, 32.22 percent and 11.89 percent, respectively.

The wording is strange. I think the author meant to say that the exports to China were UP $146 million. Otherwise, the second sentence makes no sense as written. Indeed, the DGBAS numbers have ag exports to China at $630 million through Oct of this year for a y-o-y rise of 17%, well more than $146 million. Because of the way this was worded last year, I suspect that this wording is actually meant to apply to the early harvest agricultural goodies and not to ag exports as a whole.

I've blogged on this issue several times. Let's just repeat what I wrote last year at this time because it is still apropo:

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.

The numbers are basically in the same proportions, just larger. Grouper and tea still account for the bulk of the rise in exports to China. The 103% rise for oranges is probably from a very small base, no doubt why percentages and not absolute numbers are given. The comforting idea that ECFA is going to save the poor farmers of southern Taiwan is a con. Unless you raise grouper -- fish and related products account for 2/3 of the island's agricultural exports (data source) -- you are not making money off agricultural trade. That post I wrote last year also explains why the profits are not going to Taiwan.

Taiwan runs an agricultural trade deficit with China proper but when you throw in Hong Kong, counted separately in the Taiwan figures, it seems that Taiwan still runs a slight ag trade surplus. Japan, China, and Hong Kong are first, second, and third as agricultural trade destinations (DGBAS). Against that, there's likely a flood of smuggled agricultural goods from China not counted in the trade figures (see this article).

Despite the hype, agricultural exports to China are not flying out of the containers. Rather, they consist of a couple of high value items whose profits are concentrated in a few powerful hands. This is why China cannot woo the south with the promise of agricultural concessions. Because they have no appeal for the vast majority of farmers.
_______________________
[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.

Fallow Land Rehabilitation Program in the news

Various media outlets (example, example) have been reporting for months on the government's plan to revitalize fallow land...

From RTI:

"Of Taiwan's 460,000 acres of farmland, more than 30,000 acres have been fallow for five years; 46,000 acres have been fallow for two years; 50,000 acres have been fallow for a year," said Chen.

The current system offers stipends to encourage land to go fallow. It was implemented when Taiwan was preparing to join the WTO in 2002. The country wanted to cut its own grain production at the time to allow an influx of imported staple foods.

In other words, the US demanded that Taiwan curtail its own rice production to permit imports of rice from the US. The results were of course pernicious, as I observed a couple of years ago:

In Taiwan the government runs a set-aside program for farmland under which large quantities of farmland lie fallow. In some years the amount set aside exceeds the amount planted in rice (!). This program has come under much criticism, since sometimes farmland becomes unusable after being set aside and land lying uncared for invites pests that affect nearby farms. This results in abandoned land, 50,000 hectares by one 2004 estimate. When land leaves the market, it drives up the price of remaining land, pushing up rents -- and many farmers are renters, not owners. Further, for many observers it makes little sense to set aside good farmland in the lowlands while permitting farming on slopes. The set aside program is also driven by shortages of water, diverted for industrial and residential needs. Everything is exacerbated by the lack of government oversight and monitoring, a persistent problem in all areas of government policy in Taiwan.

Another long-term process, still being felt, is the change in demand for rice as Taiwan's food desires changed. As demand for meat grew in the 1970s and stimulated local livestock production, this drove demand for feed crops for the animals, which in turn pushed farmers to switch from rice to feed crops for animals. This reduced the land in rice, especially since the government set a price floor for feed crops in the 1970s. Accession to the WTO slammed rice production further.This journal article has the call:

To prepare for joining the WTO in 2002, the Taiwanese government implemented a new plan in 1997, the “Adjustment of Paddy Field and Uplands Utilization Program,” to cushion the adverse effects of agricultural trade liberalization on domestic farmers. According to the negotiated schedule for opening the rice market, Taiwan was required to import a specified amount of brown rice annually, roughly 8% of annual domestic rice consumption, before the rice market was completely opened. The additional supplies of rice from imports (about 144,000 tons of brown rice) represent a need to reduce further rice production, which will be met by letting an additional 40,000 ha of paddy fields go fallow (Shi, 2002). Thus, the goal of rice production in Taiwan has changed from self-sufficiency to a demand–supply balance (Lee et al., 1997).

Additionally, as a developed economy, Taiwan was required to reduce its AMS [ag subsidies] by 20%. To achieve this goal, the Taiwanese government reduced the land growing forage crops at a guaranteed price, and further encouraged diversion to different plants and fallow lands. The area planted with feed maize decreased accordingly and fell to the level it was in the late 1960s.

Finally a 2007 a revision to the village rebuilding law permitted the further conversion of 160,000 ha of farmland for the construction of "idyllic communities."

A FocusTaiwan piece offers a few pertinent observations from Agricultural Minister Chen on what is driving the new law:

Chen said the total acreage of local rice paddies has decreased from some 600,000 hectares 30 years ago to about 250,000 hectares at present.

In contrast, the acreage of fallow farmland has increased steadily since Taiwan's accession to the World Trade Organization in 2002 and has exceeded 200,000 hectares by now.

Which large plots of farmland are left idle, their owners can still receive subsidies. "The phenomenon violates the principle of fairness and justice," Chen said, adding that the Council of Agriculture (COA) needs to take actions to improve the situation.

The piece then offered a translation of a UDN article on the new policy giving details:

At present, farmland owners are entitled to receive NT$90,000 (US$3,072) per hectare in two installments annually if their farmland is left fallow.

Under the COA's new fallow farmland revitalization project, land owners can only receive NT$45,000 in subsidy annually for fallow farmland.

The restriction is aimed at encouraging landlords to plant crops for at least some months instead of leaving their land plots fallow all year long.

If landlords are unable to plow their farmland, the COA-backed farmland bank will help mediate leasing deals for them during a grace period from 2013 to 2014.

During this period, landlords will be given an additional NT$20,000 in farmland maintenance subsidy.

Owners of land plots that are unsuitable for farm produce plantation or are reserved for ecological conservation will be offered NT$68,000 in subsidy in two installments annually. The COA will also help landlords to transform their land plots for other usage.

Chen said the new project will need a annual budget of NT$11 billion, the same amount needed for the current project.

Under the new laws, the government promotes production while reducing fallow land without a change in budget. This is ok if you are a young farmer, but older farmers who leased land long-term and invested in new equipment to farm it expecting X amount of subsidy, as the UDN piece goes on to point out, will now be getting 1/2X. Ths policy might encourage land sales by debt-stressed farmers to developers, which unfortunately Taiwan has no shortage of.

Lawmakers criticized the new policy (TT) which places control of production in the hands of local governments (read: patronage networks and local clan and faction systems):

However, the council is failing to control production and supply under its current policy, which leaves 60 percent of activated fallow land for local governments to decide which crops to grow and does not regulate the plantation of import substitution crops, such as flint corns, sugarcanes, soybeans and wheat, the lawmaker said.

The council’s planning and seasonal adjustments would be crucial for the farmers, otherwise the farmers could be exploited by middlemen or farmers in various regions could cultivate the same crops, which would result in lower prices, he added.

DPP Legislator Huang Wei-cher (黃偉哲) said the central government would be in a better position to monitor and control production and supply than local governments.

The new policy also encourages farmers to plant corn and wheat, two crops not particularly suited for northern Taiwan. The policy -- of course not, why even say it? -- also appears to contain no promotion of sustainable, organic, or permaculture farming. Hope I am wrong....

REF: Experimental Forestry Project to restore fallow land.
_______________________
[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.

China Consumes Taiwan's Agriculture

Moon and raindrops

Several times on this blog I've noted that one of China's longterm goals is to hollow out Taiwan's productive industries, since Taiwan's strong economy is a powerful support for independence. This move has multiple prongs, including getting its industries to move to China, and stealing the island's production technology. A legislative report notes the effect of the latter effort on Taiwan's agriculture (Taipei Times):

It added that some Taiwanese strains of agricultural products grown or raised in China have also dealt a blow to Taiwanese farmers, as the farmers’ products have been sent back to the country because they were still prohibited from entering China. They included red carrots, pineapples, groupers, black tiger shrimps, abalone, butterfly orchids, carnations and mushrooms.

In the six years since 2006, China has acted “in a more systematic way” to lure Taiwan’s farming sector, with a total of 29 “Development Parks for Taiwan Farmers” established in 14 provinces as of this year, in addition to nine “Cross-Strait Agricultural Cooperative Experimental Zones” that have been set up since 1997, according to the report.

China not only offers Taiwan-funded enterprises in the agricultural parks a set of incentives in land acquisition, tax credits and lending, but also encourages and invites award-winning Taiwanese farmers to visit China through organized tours, or offer them money in exchange for seeds and techniques, the report said.

The report said that the 3,000 hectare Zhangping Yongfu Development Park for Taiwan Farmers, one of six in Fujian Province in southeast China, is being planted with oolong tea, all by Taiwan farmers from Nantou County, a famous tea-producing area, and is being developed into what China calls the “Alishan (阿里山) of China.”

It was estimated by Chinese research institutes that their annual production of oolong tea, which is under cultivation in the Zhangping Yongfu park, could be as high as three-fifths of the amount of high mountain oolong tea produced in Taiwan annually, the report said.

I've blogged on this before including this post from Nov 2011 on the bogus numbers on Agricultural Exports to China and this post on an enthusiastically awful NY Times piece. This month the government in Taiwan also moved to create a uniform fast track for agricultural exports. Why?

Local exporters have complained that without the mechanism, their products have often been detained in customs at Chinese ports pending quarantine checks, making it nearly impossible to get the products on the market while they are at their freshest.

This functions as an informal barrier to agricultural exports from Taiwan. Is it deliberate? Well, the old saw runs that you should never attribute to malice what can be explained by stupidity. Smuggling of agricultural goods from China, which has been going on for more than two decades, is almost never covered by the media. Sadly.
____________________
Daily Links:

• Things I Did Not Know #490: Reeves' Muntjac, from Taiwan, is an invasive pest in the United Kingdom.
• Peter Lee argues that China is waging economic warfare against Japan
• CoCo Fresh from Taiwan takes over the world
• FAPA calls on government to stop Next Media sale
• Taiwan dollar likely to rise.
• M Taylor Fravel on Hainan province's recent declaration that ships in the South China Sea will be subject to boarding, says not to panic, but Taiwan concerned.
• Japan-Taiwan fishery talks continue to stall

_______________________
[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.

Paddy Fields in a Globalized World 2: Methane

Methane. A powerful greenhouse gas; human activities pump it out like crazy. By now educated readers are aware of the problem of methane from production of cattle and other ruminants, which worldwide accounts for 28% of methane production (EPA). Last year, I wrote a post on paddy fields in a globalized world and learned that rice paddy fields, 90% of which are in Asia, account for roughly 20% of global methane production according to most sources, though there is much variability in the estimates. They are also known to be major producers of another greenhouse gas, nitrous oxide.

The connection between human activities and a warming world, robustly-established in the climate sciences, is important because by 2050 the world will be feeding 9 billion people, meaning that rice production and its associated methane production will likely have to increase.

In Taiwan rice is generally planted twice a year. The vast majority of methane emissions take place during the second planting (here, here). Because in every country cropping practices are different, local factors affect methane output from rice farming. This paper on the methane emissions in all 15 of Taiwan's irrigation districts observes:

The amount of methane emitted in the second crop season was 7– 16 times that emitted during the first crop season. If the reduction in planted acreage proposed (12%) is during the second crop season, this will reduce the amount of methane emitted by 21% annually.

Additionally, the rice straw following the first crop harvest is ground into the soil before the rice is planted in the second crop season. The addition of ground rice straw to the soil significantly increases the rate of emission of methane in the hot and humid summer. Removing the rice straw from the soil greatly reduces the rate of emission of methane.

The authors recommend that rice straw be removed from fields prior to the second planting to reduce methane emissions. The paper dates from 2003, when Taiwan had just entered the WTO and the government had taken thousands of hectares of rice fields out of production to comply with agreements to import rice. This ironically reduced methane emissions. The paper observes that in Taiwan temperature is the major determinant of rice field methane output; it is highest in Pingtung fields and lowest in Nantou.

Another factor in rice field methane output is water and water depth. In China methane emissions fell 40% when water-saving practices were implemented that drained fields of their water three times annually instead of keeping them continually flooded. In Taiwan the effects are similar though not so dramatic. This is because when the fields are flooded, soil bacteria shift to anaerobic fermentation of organic material in the field, which creates methane. Upland rice fields, which are not flooded, produce negligible amounts of methane. Recall, however, that as my post on paddy fields noted, flooding rice fields recharges underground water sources.

Another methane reducer in Asia was the shift to artificial fertilizer and away from animal and organic waste. Differences in fertilizer type also affect methane production. Nitrogen-rich fertilizers result in much higher methane emissions, in one 2003 study in Taiwan large reductions were found if non-nitrogen fertilizers were used (another study of methane and nitrous oxides emissions from Taiwan).

Because every region has its own special methods and practices for producing rice, there is no global fix for the problem of methane production from rice fields. But it is surely something humanity will have to consider in the coming decades.

REF: Want to reduce weeds, snails and methane in rice paddies? Try ducks!
______________
Daily Links:

• Travelscope Introduces Taiwan's Tea and Aboriginal Cultures. 
• American surfers hit Taiwan
• AsiaEye under the radar news
• Ag losses from rain to top NT$500 million; expect higher food prices in local markets.
• Five day boycott by DPP blocks vote on ractobeef. The KMT has been calling for an executive order. Note that the Ma Administration could have ended this impasse by executive order. That Ma has not suggests that he wants to use the legislature as a fig leaf for permitting ractobeef into Taiwan ("Look, the legislature decided to let beef in, my hands are tied") or as an excuse for not letting it into Taiwan. Either way, the Administration shifts the blame for the decision onto someone else. The really terrifying thing is that Taiwan's voters will return this legislature in the next election even if it votes to let in beef laced with cyanide.

_______________________
[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.

Eroding Taiwan

A friend of mine passed this around Facebook today (link). This is a picture of Jingguan Village in Nantou. Farmed slopelands erode spectacularly in Taiwan's powerful rainfall events; the picture shows the resultant effects. Taiwan's gov't is pursuing the conflicting policy of developing marginal slopelands while paying for land to lie fallow. As I wrote in a post on paddy fields last year:

In Taiwan the government runs a set-aside program for farmland under which large quantities of farmland lie fallow. In some years the amount set aside exceeds the amount planted in rice (!). This program has come under much criticism, since sometimes farmland becomes unusable after being set aside and land lying uncared for invites pests that affect nearby farms. This results in abandoned land, 50,000 hectares by one 2004 estimate. When land leaves the market, it drives up the price of remaining land, pushing up rents -- and many farmers are renters, not owners. Further, for many observers it makes little sense to set aside good farmland in the lowlands while permitting farming on slopes. The set aside program is also driven by shortages of water, diverted for industrial and residential needs. Everything is exacerbated by the lack of government oversight and monitoring, a persistent problem in all areas of government policy in Taiwan.

The result of all this is graphically demonstrated by the image above.
________________
Daily Links:

• Some members of the Atayal community of Smangus, a popular ecotourism destination, have apparently been busted cutting down ancient trees on other tribes' lands and selling them.
• China defense minister to visit US to strengthen mil-mil ties. After twenty years of strengthening, shouldn't the ties be like iron? What? No? 
• Meanwhile US triples military aid to Philippines
• Alan Romberg's article on the recent elections in Taiwan
• Scott Simon: One China as a floating signifier

_______________________ 
[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.

Irrigation Annexation

The irrigation associations were in the news this week as the KMT proposed a bald-faced annexation scheme for them....

A proposal by the Taiwan Joint Irrigation Association (TJIA) president to have presidents and commissioners of irrigation associations directly appointed by the government rather than elected from among representatives has sparked accusations of being anti-democratic.

Yang Ming-feng (楊明風) said the direct appointments would help curb rampant bribery and violence surrounding the votes.

Yang, who doubles as president of Chia Nan Irrigation Association, submitted the proposal during a members’ convention of the TJIA earlier this month, in which he proposed an amendment to the Irrigation Association Organization General Principles (農田水利會組織通則) to replace the current system for selecting association presidents and commissioners with direct appointment by the government.

Before 1994, members of irrigation associations were put in charge of selecting their representatives, while the latter took charge of electing association presidents, the proposal said.
However, such an election system led to vote-buying and violence, forcing the legislature to amend the principles.

The irrigation associations (and fisheries and farmers associations and similar) are important sources of local patronage for construction and other industries, and thus, centers of local political struggles. From the national point of view, they are key associations for local agriculture, an important locus of opposition to the Ma Administration's ECFA and China trade moves.

The last election for the associations was in 2010. At that time the DPP held just one seat but increased to four seats after the election, perhaps a sign of dissatisfaction with the Ma Administration (but perhaps also just the result of temporary local factors). The death grip of the KMT on local politics, an important source of its power, is shown right there -- prior to that election the KMT held all but two of the irrigation association directorships.

The associations are government funded via the COA (2.3 billion NT in 2010), and the Ma Administration wants them under the thumb of its appointees. The KMT's ability to bring the institutions of society under its control is a key factor in its continuing dominance of the island's political life. If the Ma Administration is able to put its own people in those posts, its ability to punish and reward will be greatly magnified, especially in areas where there is widespread opposition to its policies.
_______________________
[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.

Japan's first land survey in Taiwan

From Japanese Mapping of Asia-Pacific Areas, 1873–1945: An Overview, Shigeru Kobayashi, Osaka University, Cross-Currents: East Asian History and Culture Review E-Journal No. 2 (March 2012).

(Remarks on cadastral (agricultural land/land use) surveys in Japan's newly-acquired territories....)

....In each of these territories, the new Japanese colonial government saw the importance of establishing its financial base in order to build up the local economy. Each colonial government set up a land registration system, including a cadastral survey, which was indispensable for raising revenue from landed property. This kind of project in the colonies has been considered an extension of the Land Tax Reform in the Japanese mainland (1873–1881). Concerned researchers widely accept that the modern landholding system established by domestic reform was reproduced in the colonies. However, if one scrutinizes the cadastral surveys in Taiwan (1898–1905), Korea (1910–1918), and the Kwantung Leased Territory (1914–1924) along with that in Okinawa Prefecture (1898–1903), several distinctive features can be found (Kobayashi and Narumi 2008). First, these surveys were carried out by special provisional government offices with specialized equipment and instruments, in contrast to the Land Tax Reform, which depended heavily on local administrative offices and inhabitants. Second, as a result of the experience of the Land Tax Reform, the surveys were conducted systematically and efficiently. The provisional government offices investigated thoroughly traditional land systems, which were deemed incompatible with modern landownership, and developed policies to cope with them carefully. Cadastral maps based on modern surveying techniques, including triangulation, were made along with land registers.

Other sources indicate that this cadastral survey -- difficult in the mountains where survey teams were under constant threat from aborigines -- helped bring much land that had been hidden from Qing taxation into the Japanese tax and agricultural regimes. Liu Ming-chuan, the progressive governor late in the Qing period, conducted land tax surveys that also brought much land under Qing taxation, but was nowhere close to a realistic figure. Kerr observed in Licensed Revolution... that the Qing were taxing 867,000 acres, but the Japanese survey more than doubled the amount of land known to 1,866,000 acres. Liao and Wang, in Taiwan Under Japanese Colonial Rule, 1895-1945: History, Culture, Memory, point out that land revenue in 1903 was .92 million yen, but by 1905 it had tripled to over 2.8 million yen.

A presentation of Shigeru's on the net gives an example of the kind of maps the survey produced. The scale for the survey was 1:20,000 and 1,466 sheets were produced, according to Shigeru.

Liao and Wang observe that this was the first survey to map the island scientifically, and its explicit goal was to map each piece of land and assign a number to it. They also observe that the survey, in addition to its obvious purpose of increasing revenue and clarifying ownership and location, made the unknown known, making it more difficult for Taiwanese guerrilla bands to hide in what had previously been unmapped areas.

This kind of post is what happens when you are just randomly surfing the net...
_____________
Daily Links:

• SPECIAL: Greenpeace ship Esperanza to be docked in Keelung 3/31-4/2, press conference Saturday for announcement on results of Pacific Fishing commission discussions on central pacific marine reserves 
• Isn't it great to have Lien Chan out there? Because we need someone on the KMT side to balance Annette Lu....
• Pingtan Experimental Zone, created by China to lure Taiwanese money and tech, is "somewhat political" says intelligence chief. No, ya think?
• Commonwealth on the island's meat oversight by gov't. Great job.
• Taiwan woman who killed self while chatting on Facebook makes international news.
• China Reform Monitor:
  

  China and Russia are on the verge of concluding their biggest arms contract in a decade but it is being held up by Moscow’s insistence on new intellectual property rights protections to limit Chinese competition in third country markets. Beijing has agreed in principle to buy 48 Su-35 multi-role fighters for $4 billion (approximately $85 million each) but is reluctant to stop copying Russian fighter aircraft. Despite an existing Sino-Russian agreement concluded in 2008 on the protection of military and technological intellectual property, Moscow is demanding additional guarantees. Yet, even if Beijing agrees to formalize Russian intellectual ownership of the Su-35, tracking compliance would be impossible, Russia’s Kommersant newspaper reports. China’s share of Russian arms exports has declined steadily since 2007 and the two have not concluded a major contract since 2003.

_______________________
[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.

Beef, Avian Flu: Vegetarianism, here I come

One wonders just what kind of pharmacopoeia went into creating this cornucopia of agricultural news this week. It's normal to add that you'd like a dose of whatever they are smoking, but I think I'll take a pass on that, thanks. It's obviously some kind of depressant....

I hardly know what to write, because this topic is like the poster child for the old saw that the more trivial the issue, the more bitter the fighting. Background first.....

The background is that the two governments signed a protocol in October 2009 lifting most of the remaining restrictions on U.S. beef products that Taiwan had put in place following the discovery of a case of mad cow disease in 2003. Just two months later, however, the Taiwan legislature – in which Ma’s Kuomintang controlled some three-quarters of the seats – enacted a law that reversed some of those very provisions. Despite resentment at what it regarded as Taiwan’s reneging on the protocol, the U.S. government by early 2011 was willing to start preparations to resume TIFA talks. Then another obstacle arose when Taiwan rejected some shipments of beef found to contain traces of the leanness-enhancing feed additive ractopamine. Though ractopamine, widely used by American ranchers, had long been a banned substance in Taiwan, inspectors had not previously tested for its presence. Random inspections, and the rejection of many shipments, have continued over the past year, and the uncertainty has caused some big buyers such as Costco to switch to other sources of supply.

As the TT noted in its review of a Wikileaks cable:

Taiwan did not allow US bone-in beef — a ban which had been in place since 2003 when the country outlawed all US beef imports shortly after the first case of mad cow disease was discovered — until a Ma administration protocol with the US in October 2009.

That protocol did not resolve the dispute after the legislature amended the Act Governing Food Sanitation (食品衛生管理法) to ban imports of beef offal and ground beef and the government began testing US beef for ractopamine in January, both hindering the resumption of bilateral talks under the Trade and Investment Framework Agreement, which had been suspended since 2007 because of the controversy.

Lessee... the beef issue is really two issues. First, it was Mad Cow disease. In 2003 the Chen Administration banned US beef imports over the discovery of a case of Mad Cow in the US. The restrictions were not lifted until 2009, and the legislature then reinstated them. Then in 2011 Taiwan began testing beef imports for ractopamine and the rest was misery....

It was actually only in 2006 the government banned ractopamine:

Following the decision, Taiwan, which prohibits the use of ractopamine, said that its ban, which was introduced in 2006, would remain in place.

“We have no plan to change our zero-tolerance policy against the use of ractopamine in meat products,” Minister Without Portfolio Yiin Chii-ming (尹啟銘) said by telephone.

President Ma Ying-jeou (馬英九) in March charged Yiin with the task of reopening negotiations with the US under the Trade and Investment Framework Agreement (TIFA) platform after the US unexpectedly put a hold on talks originally scheduled to resume in late January over the ractopamine issue.

The TIFA talks, which started in 1994, have been suspended since 2007, in response to Taiwan banning imports of US beef over fears of mad cow disease.

Beef might be a small thing in the overall US-Taiwan trade picture but for US producers Taiwan was an important market:

Taiwan purchased $128 million in beef products from the United States in 2008. In 2002 -- the last full year that the banned beef items were sold on the island -- they constituted about 13 percent of total U.S. beef imports.

The ractopamine ban was introduced in 2006 but no testing was done until years later. This means -- let's complete this circle -- that Taiwanese must have been eating ractopamine in US pork, for which it was introduced under the name Paylean in 2000, for years. Indeed...

After a 37 percent drop in 2007, U.S. pork (including variety meat) exports to Taiwan bounced back in 2008 with a 98 percent volume increase to 31,701 metric tons and a 115 percent rise in value to $52.9 million. The upward trend continued in 2009.

It did not reach US cattle until 2003, apparently after the Chen Administration ban went into effect (article on development of ractopamine). But US beef was entering the country in various guises between 2006 and 2011...

Ok, background done, now once again we should note that...

....the air is polluted, the veggies are coated with chemicals, the rivers are stinking open sewers, the pork is a testing ground for antibiotics, the roadways operate in Death Race 2000 mode, and the Taiwanese are as prone to eat junk food as any other people. But let the US want to bring in beef with traces of ractopamine....

The government this week pushed for a conditional lifting of the ban, triggering protests:

Sixteen civic groups took to the streets of Taipei yesterday to demand the resignation of Premier Sean Chen over the Cabinet’s decision to push for a conditional lifting of a ban on imports of US beef containing a controversial feed additive.

This led to the usual tussle between the KMT and the DPP. The latter is using the beef issue to bash the KMT. Ractopamine was banned under the DPP but no steps were taken to actually test for it (laws are made to be seen, not heard, in Taiwan). The danger for the pan-Greens should be obvious -- from the US perspective the KMT government has adopted the "reasonable" position and the DPP the "intransigent" position. A DPP legislator accused the KMT of making a political deal with the US on the issue in exchange for US support in the elections (but given the DPP position on this how could the US have dealt with that party? D'oh.) However, supporters of lifting the ban argue that it hurts Taiwan in its attempt to join the US-led TPP "free trade" initiative as well as in the talks on the Taiwan-US trade framework, TIFA, which, like fusion energy and a Cleveland Browns Super Bowl victory, is always just a few years away. Recall that the TIFA talks were suspended in 2007 and the US did blame the beef issue when it suspended them.

One of the keys to understanding the passionate silliness of the Taiwanese is identified in this TT article from the other day:

Throwing pieces of raw beef on signs with illustrations of President Ma Ying-jeou (馬英九) dressed as Uncle Sam, with the words: “I want you to eat US beef” written on them, the protesters said that the administration was neglecting the public’s health, while humiliating the nation and forfeiting its sovereignty.

Because Taiwan's sovereignty is always contested and always perceived as threatened, issues like this one that thrust themselves into that netherworld where the ROC virtual state meets the reality of global non-recognition are blown totally out of proportion. When it comes to sovereignty, the Taiwanese are like a cripple who pushes his wheelchair into a bar and then picks a fight with the biggest fellow present. There is also the underlying xenophobia, so non-obvious in everyday discourse and behavior, but always there lying under the surface, waiting to arise. The intersection of food, medicine, and The Other, who is tainted by his foreignness and cannot become One of Us is also explosive -- in this case, The Other is literally tainted with an uncertain drug. It's a shame that ractopamine-laden beef importers aren't visibly cruising nightclubs picking up Taiwanese girls, then every Taiwanese anti-foreigner button would be pressed. And this blogpost would be a lot more amusing too.

But enough of beef. The government will bull its way to getting acceptance of a conditional lifting of the ban, enough to satisfy appearances for the US. US beef will flow onto the island, consumers will eat it and this controversy will vanish like campaign promises on the day after the election.

The other interesting ag-related issue is the appearance of another round of avian flu on the island. There was an outbreak of avian flu in December in Changhua, which immediately led to claims that the outbreak had been covered up because of the upcoming election. I heard rumors of this in December but had no way to verify it. However, a group of activists claimed that the government had been covering up evidence of highly pathogenic avian flu for two years....

EAST disclosed two documents from 2010, dated March 1 and March 8, that the council’s Animal Health Research Institute sent to the Bureau of Animal and Plant Health Inspection and Quarantine. The documents showed that two technical group meetings held on Feb. 25 and March 5 that year had already received H5N2 Intravenous Pathogenicity Index [IVPI] lab results, which showed readings above 1.2 and 2.41, indicators that the strains were highly pathogenic.

Readings greater than 1.2 in an IVPI test on a six-week-old chicken indicate a highly pathogenic strain.

However, the council’s four reports to the OIE that year all said that the cases were “of a low pathogenic level,” EAST executive director Wu Hung (朱增宏) said, adding that the council should explain why it added “clinical high death rate” as a criteria for determining a virus strain’s severity.

According to the information supplied by the DPP, the Council on Agriculture had filed the report on the outbreak in Changhua on Jan 10, four days prior to the Jan 14 election. Prosecutors are looking into the issue even as we speak, and the director-general of the bureau of plant and animal health inspection and quarantine resigned on the 4th. Media reports (Focus Taiwan) say that a documentary filmmaker has been shooting film of bird flu on farms in central and southern Taiwan since 2006.

Vegetarianism sure is looking good.....
________________________
Daily Links:

• Andrew picks up my post on this week's trip to Green Island and adds a few notes. He also posts on the magnificent Wuling ride.
• China's cybercapabilities put US forces at risk. 
• US, Philippines to hold annual military exercises in waters China wants to annex. But watch out, Chen Shui-bian, you're provoking Beijing.....
• China says as soon as investment agreement is reached, Chinese capital can begin swallowing Taiwanese firms and poaching their technology investing in Taiwan.
• Taiwan's exports fall 4.5% year on year, but this was actually the second highest total ever since last year was so enormous. However, the steepest decline was in information tech.....
• A new approach to fusion energy?

_______________________
[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.

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.