{"path":[{"name":"Home","link":"index.php"},{"name":"Economics","link":"list_tt.php?unit=6"},{"name":"Taiwan Review","link":"list_tt.php?unit=8"}],"meta":{"iden":"12836","title":"Rejuvenating the Land","img_isshow":"1","image_nail":"https:\/\/image.taiwantoday.tw\/images\/content\/img120160803081842577_120.jpg","image_small":"https:\/\/image.taiwantoday.tw\/images\/content\/img120160803081842577.jpg","image_large":"https:\/\/image.taiwantoday.tw\/images\/content\/img120160803081842577.jpg","image_origin":"https:\/\/image.taiwantoday.tw\/images\/content\/img120160803081842577.jpg","author":"","description":null,"article":"A group of young farmers in southern Taiwan is transforming fallow farmland into fields of hope<\/EM>. \r\n

Ou Meng-han's reason for staying in Dounan might sound strange to other young people hailing from this town in Yunlin County, southern Taiwan. \"I can see a future here,\" the 26-year-old forestry major says. <\/P>\r\n

Even as many college graduates seek job opportunities in Taipei and other large cities, the young man is moving in the opposite direction by staying in Yunlin, which is ranked second on the island in terms of farmland as well as the percentage of the population working in the agricultural sector. Ou has decided to engage in farming in his hometown, despite the occupation's aging population, the island's rapid industrialization and what some see as the sector's decline. <\/P>\r\n

Overall figures for the sector from the Cabinet-level Council of Agriculture (COA) are positive. The average annual income per household for farmers rose to NT$941,000 (US$31,350) in 2006, not far off the national average of NT$1.1 million (US$36,000) for the same year according to the Directorate General of Budget, Accounting and Statistics. Yet many traditional farmers are struggling to earn a living from farming alone and many of those who work small plots of land have been especially hard hit. <\/P>\r\n

Since Taiwan's entry into the World Trade Organization in 2002, many people in the sector have been worried about the impact of competitively priced imports entering the market. In 2004, a young man from a farming family protested against imported rice by planting explosive devices in Taipei, which drew great attention to the plight of many traditional farmers. So too did the documentary Let It Be, released the same year and featuring a 75-year-old Taiwanese farmer resigned to the idea that there was no one willing to take over the farming of his land. <\/P>\r\n

Today, a small-scale farm might generate as little as NT$120,000 (US$4,000) in annual revenues, forcing some farmers to take part-time employment away from the farm to supplement their household incomes. The COA tries to assist farmers and take care of Taiwan's farmland by providing a yearly subsidy of NT$90,000 (US$3,000) for each hectare of fallow land that grows green manure crops--crops that replenish the soil--plus there is a monthly allowance of NT$6,000 (US$200) to farmers aged 65 and above. So, who would want to toil away tilling the land if the returns for small-scale farming are so small? Currently, Taiwan has more than 800,000 hectares of arable land, one fourth of which lies fallow, with the government spending some NT$12.5 billion (US$410 million) in fallow subsidies annually. <\/P>\r\n

One of the problems facing Taiwan's agricultural sector is the difficulty of achieving economies of scale, since farmland is highly fragmented in terms of ownership. The average family farm in Taiwan measures just 1.1 hectares according to COA figures, compared with an average of 20 hectares in Europe and 200 hectares in the United States. Ou Meng-han's decision to go into farming has much to do with the ambition of the Dounan Farmers' Association headed by Chang Yu-tse. To increase efficiency and profits, the association began leasing small tracts of farmland from individual farmers in 2003 and organized a team devoted to cultivating these small holdings under a unified mechanism. <\/P>\r\n

This new approach has not only interested the likes of college graduate Ou, but it has also even impressed President Ma Ying-jeou, who publicly praised the implementation of the \"Small Landlords, Big Tenant Farmers\" program in Dounan. Ma hailed the project, saying the model \"rejuvenates the farmland and signals a new wave of land reform\" in a televised public debate weeks before the presidential election in March.  <\/o:p><\/P>\r\n

Big Impact<\/STRONG> <\/P>\r\n

At present, the team consists of 15 farmers, half of them under the age of 40, out of the association's some 150 members. Speaking about the big tenant team, Liaw Ain-ding, director of the COA's department of planning, says they \"have stamina, think innovatively and adapt to new ideas quickly. Older farmers are valuable for the wisdom they've accumulated over the years, but you can't make significant progress if you refuse to change.\" For instance, older farmers tend to use large amounts of chemical fertilizers and pesticides to ensure high production, and ignore the importance of standardizing crops in size and quality, Liaw explains. In contrast, Ou's team is more receptive to new ideas and is willing to challenge traditional practices in order to improve efficiency, he says. <\/P>\r\n

Like Ou Meng-han, the newly recruited young farmers are all native sons of Dounan. Each team member is paid a monthly salary determined by his years of farming experience as well as the production value he generates. On average each received a year-end bonus six times his monthly salary last year, meaning that a senior member with a high base salary could earn a yearly income of some NT$1 million (US$32,800).  <\/o:p><\/P>\r\n

\"We pay good rent to help persuade landowners to let us use their land,\" the association's Chang says. The association offers NT$100,000 (US$3,300) per hectare per year. By contrast, the COA's fallow subsidy of NT$90,000 (US$3,000) per year is less attractive, especially considering that around two thirds of that amount is spent on direct costs for the green manure crops. The government is happy about what Chang's group has been doing, too. \"In effect, the Dounan Farmers' Association is doing a favor for the government. Now, it can save on the subsidies otherwise given to those owners of fallow farmland,\" the COA's Liaw says. <\/P>\r\n

Still, it has taken time to convince some older farmers to rent out their land. For example, the team still sometimes faces resistance because the owners are afraid they would no longer be able to claim clear ownership of their land if the ridges separating their farms are demolished to make it more efficient to cultivate the land as one large tract. The team also has to reassure landowners that it would make good use of the land and would not lay waste to the fields the owners have cultivated throughout their lives. To deal with these concerns, the team must spend a lot of time communicating with farmers to assuage their fears. <\/P>\r\n

Potato Payload<\/STRONG> <\/P>\r\n

Growing only potatoes and carrots--root vegetables that do not rot easily--the team is becoming a role model for cost-effective farming. Purchased in bulk by the team, which operates as a single large tenant farmer, farming equipment and supplies naturally are less expensive than if bought separately or in smaller amounts by individual farmers. Tractors and other farm machinery can be acquired and operated in a more cost-effective way by members of the group farming a large tract of land than by small landholders. <\/P>\r\n

The team has the financial ability to make big investments and has done so by building freezing facilities. This means that they can store and sell their produce outside the growing season from October to April and make better profits accordingly. Out of season potatoes, for example, can fetch NT$25 (US$0.80) a kilogram, compared with NT$13 (US$0.40) in season. After a typhoon, which is a common occurrence in summer and fall, the price could rise as high as NT$40 (US$1.30) per kilogram.  <\/o:p><\/P>The storage facilities also mean the team can provide the market with a stable supply of produce--an impossible task for individual small farmers. In order to secure long-term export sales, agricultural products have to be supplied steadily and in large amounts. \"Actually, the profit difference between the growing and non-growing seasons is not so great if you factor in the cost of storing the crops,\" says Lee Chang-long, a 30-year-old horticulture major now heading the potato cultivation division. \"The storage is important mainly because it means a stable supply of crops to the market.\" \r\n

Reaping Benefits<\/STRONG> <\/P>\r\n

Older farmers are gradually seeing the benefits of leasing their lands. The team rents more than 400 hectares today from more than 500 families, up from just 30 hectares when it started to operate. The potato fields are all in Dounan, while carrot farms are mainly in other places in central and southern Taiwan. \"More and more farmers are willing to rent their land to us, but the farmers' association can't handle all of them. We have a limited budget and we have to handle it carefully,\" the association's Chang says. <\/P>\r\n

 \"Rejuvenating\r\n

Carrots and potatoes are two major crops grown by the Dounan team, with the former fetching an ever-higher price in the Japanese market. (Photo by Huang Chung-hsin)<\/P><\/DIV>\r\n

There are multiple benefits for the landowners. Not only can they collect rent, they can save the physical exertion required to cultivate the fields and they no longer have to worry about handling the business side of farming. \"These farmers know how to cultivate their land, but they are not good at bargaining over the price of their products,\" Lee Chang-long says. Under the new system, the Dounan Farmers' Association picks the crops and transports them directly to supermarkets and other points of sale. This cuts out produce wholesalers and makes it possible to generate reasonable profits for growers. There was pressure from wholesalers in the beginning, who spoke ill of the team to the COA, Lee Chang-long says, but this is no longer an issue as the team has established a good reputation over the years. <\/P>\r\n

Already an inspiring story for Taiwan's agricultural sector--experts in Beijing have even asked to visit Taiwan to witness and learn from the team, according to Chang--the Dounan team sees the potential to be even more successful.  <\/o:p><\/P>\r\n

Taiwanese farmers not only need to produce a stable supply of crops to sell internationally, they also have to pass strict chemical residue tests. With its eyes on the Japanese market, the association turned to professor Fang Wei of National Taiwan University's Department of Bio-industrial Mechatronics Engineering in 2005 to develop a traceability system through which consumers could check food safety by tracing the team's agricultural products along the distribution chain. \"The Japanese market is large and demanding. If you can sell things there, you can sell them anywhere else,\" the professor explains. At present, the team's potatoes go to the domestic market, but they have shipped carrots to Japan since 2005. <\/P>\r\n

Fang also helped to establish an information management system to assess the production capability, cost and performance of each farming unit under the team. \"As the scale of the project gets bigger, the need for good management is even more important,\" he says. The team plans to build larger freezers and buy sophisticated facilities for sorting and grading crops, although they are mindful of the high costs involved. \"In Taiwan's agricultural sector, only rice farming has reached the level of full mechanization. The other areas are only partially mechanized,\" Fang says. \"Onion farmers in Pingtung cultivate their land just as they did 50 years ago,\" he adds. While agriculturally developed countries have already automated the process of sorting crops according to their size and quality, Taiwanese still do this job manually. As a result, the Dounan team has had to give up big orders and has missed business opportunities.<\/P>\r\n

\"Both Japan and China had a bad winter last year. That should be a good chance for us to export large amounts of crops, but we just don't have the ability to handle the demand in a short time,\" the association's Lee Chang-long says. Professor Fang echoes the point, noting that as China has been troubled by food safety issues it could find it difficult to export its crops. In that case, Taiwan could take its place. \"We have to be ready for such a situation,\" Fang says.  <\/o:p><\/P>\r\n

Renewed Opportunities<\/STRONG> <\/P>\r\n

As a first step toward expanded production, the team made plans to build larger-scale freezing facilities on part of its farmland that happens to be in urban planning areas. Under old rules, the amount of building allowed on such land was tightly controlled and the Ministry of the Interior would not have accommodated the group's proposal. Instead, the ministry responded by revising urban planning regulations so that the area of building permitted on farmland in an urban planning area was increased from 10 percent to 60 percent of the land--in large part because of the Dounan team's case. The new rules mean the group can build larger structures on the land they use, giving the green light to their plans for new, larger freezers. <\/P>\r\n

Thanks also to a revision by the COA of regulations regarding the internal financing of farmers' associations and fishermen's associations in 2006, the Dounan team can now raise funds more easily for further investments. Rules on credit have been eased to allow such associations to lend up to 45 percent of their net value to operators within their groups for long-term loans of more than one year. The new amounts are up from the previous limit of 30 percent. <\/P>\r\n

\"But the best way to help us and Taiwan's agriculture in general is to build farming facilities with government funds. They should be looked at as part of the infrastructure in which the public sector should invest. That's just what is happening in Japan,\" Lee says. <\/P>\r\n

According to Lee, more than 90 percent of carrots exported to Japan are from China, and about five percent from Taiwan, of which the Dounan team contributes about 10 percent. This means there is much room for the team, one of the country's leading carrot exporters, to explore the Japanese market if they can improve their production capacity. <\/P>\r\n

\"We've been selling products to average supermarkets in Japan at average prices, but upscale ones started to place orders for carrots with us this past winter,\" Lee says with excitement, as the move also means premium prices for growers. As the products from the group in Dounan are gaining more recognition abroad, the next major job for the team might be in making more investments and renting more pieces of land. This would add more momentum to a new business model that is providing Taiwanese farmers with a creative way to compete in the international market. <\/P>\r\n

Write to<\/STRONG> Oscar Chung at oscar@mail.gio.gov.tw<\/A><\/P>","pubdate":"July 01, 2008","email":"","grapher":"","imginfo":"Photo by Chang su-ching","illustrator":"","photo_credit":"","tax":[{"iden":"8","name":"Economics>Taiwan Review"},{"iden":"29","name":"Taiwan Review>Taiwan Review"},{"iden":"32","name":"Taiwan Review>Economics"},{"iden":"45","name":"Archives"}],"tag":[]},"zine":{"2":{"iden":"161","title":"Vol.58 No.7 July 2008","link":"vol.php?vol=161"}}}