President Chen Shui-bian today received members of the board and supervisors of the R.O.C. Outstanding Farmers Association and expressed his gratitude for the outstanding work they do. The President said:
I am pleased to meet the outstanding members of your association. You are the exceptional cultivators of our country. You have made excellent contributions to the agricultural industry. You are not only the point guard and backbone but also the paragon of agricultural workers. The R.O.C. Outstanding Farmers Association was established on April 17, 1994 in order to foster interaction and exchanges among outstanding farmers, boost academic research and promote the agricultural industry. In ten years, you have become the most prominent organization in Taiwan's agricultural technology and production management and have made valuable contributions to improving our country's agriculture and overall economic development.
The first half of May will soon be over. Schools will enter their graduation seasons and will issue the final grades of their graduating students. This month is also the time when the International Institute for Management Development (IMD) publishes its Global Competitiveness Report that ranks the competitiveness of sixty economic entities. I am pleased to announce that last year, Taiwan's ranking rose from 17th to 12th rank and was judged one of the ten most competitive countries in the world. This year, we have also advanced to 11th rank. China on the other side of the Strait has been degraded to 31st rank from 24th. Since the year 2000, Taiwan has unceasingly improved its ranking within the IMD Global Competitiveness Report showing that the implementation of government policies is on the right track. Our insistence on reform has yielded concrete results. So I would like to tell everyone that we should not unduly belittle ourselves and underestimate our abilities. If the world looks highly upon us, we should have confidence in ourselves, in the government and in Taiwan. We just need to work together with one heart and believe that next year, we could be counted among the top ten. I request everyone to make an extra effort and struggle for Taiwan.
The most popular topic today in agricultural circles is China's announcement of a zero-tariff preferential treatment for imports of Taiwan agricultural products as one of three gifts to be given in return for the visit of KMT Chairman Lien Chan. But the fact is that Taiwan's sale of agricultural products to China is a very simple business transaction. The bigger the market, the more varied the sales prices - farmers understand this very well. But with the manipulation of a political personage or the concoction of the media, it has become 'To support Taiwan's agricultural exports to China is to have concern for farmers and to love Taiwan; any reservations against this is not to have concern for farmers, not to love Taiwan.' With this very simplistic dichotomy and rude political talk, any rational discussion of the issue is lost, unbecoming of a diverse democratic country.
In principle, the government from beginning to end has maintained an optimistic attitude toward the sale of Taiwan agricultural products to China. We are pleased that such products are sold to other countries: China, Japan, Singapore or U.S.A. The government is more than happy helping the farmers making more money. It has no intention or could stop them from doing so. But in dealing with the Chinese market, we have to be prudent. The problem is not whether the government is supportive or that guidance is given. The problem lies in the following three questions that I request everyone to consider:
First: Will the exports of Taiwan fruits solve the problem of their poor sales?
Second: Does China's market for agricultural products really worth everyone's high expectations?
Third: What are the most effective measures in protecting Taiwan farmers' interest?
If I use Taiwanese language, it would be: Is it effective? Is there money to be earned? Are there guarantees? Not to consider these questions is to dance to the tune of the war of unification waged by the other side of the Strait, exaggerating the consequences, blowing up the fruits. Ultimately, it could be to make vain efforts, satisfying one's hunger with pictures of cakes.
According to statistics, last year, Taiwan's fruit exports to China had an average wholesale price of US$0.76 per kilogram, or NT$23 to NT$25 per kilogram. In other words, fruits sold to China are treated as high-priced products. You all know that high-quality and high-priced fruits are unable to meet demand in Taiwan. Sometimes, orders have to be placed to purchase them.
Unsold fruits are very often uncompetitive products. Their prices are low with thin profit margins, and you still have to add transport fees to China. What cannot be sold in Taiwan can certainly not be sold there. So to hope that China could partly solve Taiwan's problem of excess fruit products is totally unrealistic. Perhaps, it is just a matter of preference.
The other question to ask is whether the Chinese market is really worth our high expectations. The answer is most probably negative. Last year, the total value of Taiwan fruit exports was estimated at US$86.18 million. Exports to Japan accounted for US$28.02 million or 32.51 percent. Exports to Singapore registered US$3.51 million or 4.7 percent. Exports to China just totaled US$ 890,000 or 1.04 percent. Everyone knows that it is more difficult for agricultural products to enter the Japanese market than the Chinese market. Then why is it that our exports to Japan are thirty times more than those to China? Even our exports to Singapore are four times as much.
The reason is very simple. Japanese and Singaporean consumers have very high standards; they have strong purchasing power so sales prices are higher and profits are bigger. For example, one kilogram of mango fetches an average of US$3.97. This goes down to US$0.72 if sold in China. Everyone should logically want to sell to Japan. Taiwan fruit exports to China face many limitations in terms of quantity and price. Customs and tariff duties are not the main issues. The problem lies in their population not having enough purchasing power to sustain a high-priced market. It is impossible for us to just rely on the high income in Shanghai or Beijing to support the entire market. We have to look at the facts and not be swept by the giddiness due to a momentary "China Fever."
China's declaration of a zero-tariff preferential treatment for Taiwan fruit products did not pass through the consultation process with the World Trade Organization. Neither were any customs agreements signed. It was a lone Chinese decision based on political expediency. Such ambiguity in rights and obligations could mean today I give you, tomorrow I take it back. If any damages are incurred, we cannot file a complaint and seek arbitration from the WTO. This is why the government has always insisted that any large-scale exports of Taiwan agricultural products to China should be preceded by government-to-government negotiations and agree on building a stable and orderly market. Only in this way could basic guarantees be given to our farmers. Otherwise, I am worried that our farmers are being led by the nose to become bonded serfs - it would be too late to do anything.
Our past experiences have proven that farmers cannot completely grasp the link between production and the transport of goods. Distributors at different levels earn a big part of the profits. So if we cannot effectively control the pathways of Taiwan fruit sales to China, all the efforts would come to nothing.
In recent years, the government has been promoting the Agricultural Triune Traits of Variety, Quality and Brand, hoping that through these an export-oriented, high prices, small quanity, varied and exquisite new agricultural industry could be established. At the same time, it has also been giving support and guidance to farmers and farmers associations to helping them set up strategic alliances or farm products trading companies which would adopt a complete operation system starting from production, quality control to marketing to offer farmers their best service and protection.
The issue of Taiwan fruit exports to China is not whether we would like to go or not. It is a question of whether it is worth our efforts. Have we made adequate preparations? China's declaration of zero-tariff preferential treatment for Taiwan fruit products was clearly prompted by political considerations and not by economic reasons. Everyone knows that this is a trick of their war of unification and demands that we stop, look and listen. If you know that a tiger lurks on the mountain, avoid the path that leads to its lair. Perhaps the opposition party irresponsibly dances to the tune played across the Strait. But as the ruling party, the government and the national leader, we are responsible for helping our farmers to value the money that comes from their sweat, toil and hardships.
Finally, I would again like to express my gratitude to everyone for their continued support to this government, to Taiwan and to all our friends in the agricultural industry.
The board members and supervisors of the R.O.C. Outstanding Farmers Association were accompanied by Interior Minister Su Jia-Cyuan in their call on the President.