Taiwan rice farmers set for export
boom By Jens Kastner
The door to both the mainland Chinese and
Japanese market have been cracked open recently
for Taiwan's rice farmers. In Japan, fears over
radiation contamination are making the infamously
picky Japanese consumers desire foreign grain,
while across the Taiwan Strait in mainland China,
Taiwanese rice is starting to conquer the
supermarket shelves for political reasons.
For the first time since 2002, when Taiwan
joined the World Trade Organization (WTO) and
thereby effectively sacrificed the domestic
agricultural industry for the well-being of the
high-tech ones, the island's rice producers seem
to be on the right side of history.
As
last year's Fukushima Dai-ichi nuclear disaster
occurred in one of Japan's major rice-growing
areas, Japanese housewives
unsurprisingly begin
feeling a lot safer serving up overseas-grown
grain to their families. Tokyo has always been
notoriously protectionist when it comes to
agricultural imports, but the changing preferences
of the local consumers put pressure on the
Japanese government to soften its attitudes
somewhat.
Although of the 9 million tonnes
of rice sold in Japan in 2011 only 440 tonnes were
imported from Taiwan for the grand some of
US$298,000, the figure accounted for a record
high, and according to the Taiwanese Council of
Agriculture, in the first seven months of this
year alone, Japanese grain traders have already
procured 1,500 to 2,000 tonnes of rice from
central and southern Taiwan.
There is an
answer as to why the Japanese favor Taiwanese rice
over Chinese and Thai grain strains.
"The
quality of Taiwanese high-value organic rice meets
Japanese standards; also the QQ-effect [pleasantly
exciting chewing sensation related to texture] is
much more to the Japanese public's liking," Hu
Sheng-Cheng, an economist at Academia Sinica,
Taiwan's most renowned research institution, told
Asia Times Online.
If Tokyo would open the
market wider for rice imports, there would thus be
tremendous opportunities for Taiwanese farmers,
according to Hu: "The contaminated area
surrounding Fukushima is huge, and so will be the
demand for high-quality organic Taiwanese rice."
While doubts remain on whether significant
shipments of Taiwanese rice will eventually make
it past the Japanese farming lobby, which has
strong political clout, things are set to go
smoothly in mainland China.
Only US$77,000
worth of Taiwanese rice was sold there in 2011,
but that has appeared most definitely to change
since mid-June, when the mainland's Taiwan Affairs
Office Director Wang Yi, announced that China will
allow imports of Taiwanese rice. This was one of
numerous gestures aimed at making Taiwanese better
appreciate the mainland.
Chinese officials
then got busy sorting out related quarantine
procedures and settled for an import duty of 1%.
China's China National Cereals, Oils and
Foodstuffs Corporation (COFCO) and Xiamen Seashine
Food Development Co Ltd, both state-owned,
subsequently placed their orders, and only a month
later, in two historic shipments across the Taiwan
Strait, 178 tonnes of "Taiken 9 rice" from
Taiwan's Changhua county were delivered to the
mainland market. Another 80 tonnes are due later
this month or in early September.
Taiken 9
has since been spotted in 2kg packages in mainland
supermarkets. Asia Times Online has been told that
the price tag doesn't stand out in comparison with
its domestic competitors, and according to Du Yu
of Taiwan's Chen-Li task force for Agricultural
Reform, the mainland consumer response has been
"not bad" so far.
Du Yu noted that
Taiwanese farmers associations are remarkably
upbeat over the opportunity to make it into a
gigantic Chinese market, but he also saw some
dangers.
"An over-reliance on mainland
China [will] decrease incentives for Taiwanese
farmers to upgrade technology and marketing
methods," Du Yu said. "In the longer term and in a
global context, this cannot be good."
He
explained that challenges to Taiwan's farming
sector are posed by the very high average age of
farmers (at 61 about twice as high as that of
people working in other professions), the small
scale of Taiwanese farms (average farm size is 1.1
hectares, with less than 10% of all farms being
larger than 10 hectares), and the less-than-ideal
soil conditions, among other factors. Efforts to
overcome those may now be put on the back burner
due to easy mainland business.
Also,
according to Du Yu, Chinese procurement
delegations roaming the island have initially been
targeting surplus produce after gluts. Those were
"ordinary grade" products, as opposed to the
"boutique" ones, which production the Taiwanese
government has been promoting.
If China
now were to buy regularly instead of only after
gluts, the common produce would have to be
improved, which inevitably takes time and
investment, Du Yu said.
"If such an effort
is spent [in order to satisfy the particularities
of the Chinese demand], Taiwan's policymakers must
take into account that sudden changes in Chinese
procurement patterns would bring about drastic
effects on the island's agricultural sector."
Economist Hu also warned that if Beijing
raised the import quota for Taiwanese rice
significantly, it is foreseeable that the boom
will be short-lived.
"Past experience
augurs that as soon as the Taiwanese high-value
organic rice becomes marketable in mainland China,
the taishang [mainland-based Taiwanese
business people] will copy the grain strain and
sell the rice for a lower price. Thus, for
Taiwan's farmers, there might be gain in the short
term, but in the longer one, the profit increase
will be meaningless."
Jens
Kastner is a Taipei-based journalist.
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