Techniques vs. Resources--Farm Friction Across the Straits

March and April are the calmest months of the year on the straits. At unknown spots all across them, on dark and windy nights fishermen are engaging in "marine trading."

On Tihua Street, Taipei's main drag for the sale of sundry goods, melon seeds from Lanchow, peanuts from Shantung and other goods from unspecified mainland locales--like dried lilies, mushrooms, plums, prunes and Chinese medicines--are heaped in piles wherever the eye turns.

The challenge from across the straits: According to the estimates of the National Police Administration, since the government began its campaign to arrest smugglers in July of 1990, piracy and the smuggling of guns and drugs have been steadily declining but the smuggling of agricultural products, which now makes up 65 percent of all smuggling, has yet to be diminished.

When interviewing the rank and file of farmers' associations, one hears again and again complaints about illegally imported food from the mainland. Farmers from areas that have been greatly affected, like Yunlin and Taitung, have nearly gone to the Council of Agriculture in protest.

In March of this year, at the National Economic Meeting in Taipei, the possibility of establishing an early warning system for mainland agricultural products was again a hot topic of conversation. Experts at the meeting warned that large-scale smuggling from the mainland of such high-value agricultural products as mushrooms, peanuts, garlic and fish, the importing of mainland tea leaves through third territories and the eagerness shown by Taiwan's businesses to invest in mainland agriculture might lead to an over-dependence on the mainland's agriculture. Has the mainland already launched a juggernaut on a Taiwan agricultural sector in transition?

The shrimp and eel war: In the battle for international markets, the cross-straits competition in agriculture and fishing has already come to a head.

In 1986 and 1987, Taiwan did a booming business in shipping grass prawns to Japan, trade that has been largely usurped by Penaus Chinese prawns from the mainland, a breed only recently introduced there.

And now the two sides are squaring off once more in Japan over the sale of farmed eels. Because of Japanese investment, in 1983 the mainland began taking major steps to develop its eel farming industry. Now one eighth of all eels imported to Japan come from mainland China. On the other hand, imports from Taiwan have dropped from 18,000 tons in 1987 to 13,000 tons in 1991. The rapid decline certainly concerns people, but Lin Shu-chin, the secretary-general of the Taiwan Eel Association, says such factors as climate and better cultivation techniques make Taiwan eels of higher quality. These factors--combined with the 20 years of experience Taiwan has in selling eels to Japan, a high level of brand recognition, well-developed marketing channels and good skills in shipping, managing and packing--put Taiwan eels at the high end of the Japanese market and mainland eels at the low end. The offensive the mainland has launched over the past few years has "taken away some of our market share but not cut the over-all value of the trade," she says.

But those in the eel industry dare not put down their guard. In the past two years the industry has focused on value-added preparation in what it ships to Japan, gaining a competitive edge through technological research and development.

The rise and fall of supply and demand: The domestic market is a different ball game altogether.

The R.O.C. has not yet completely opened up direct trade with the mainland. Currently, 50 different kinds of mainland agricultural products have been opened up for trading, some of which are restricted by quotas or import permit requirements. In such circumstances, smuggling has gradually become the import means of choice.

Analyzing from an economic perspective, Liao An-ting, the director of the farm products trading department of the Council of Agriculture, says that smuggling begins when price differences allow for hefty profits. But the large quantity of agricultural products smuggled in from the mainland--according to the Council of Agriculture, more than 1,300 tons of agricultural products were smuggled in from July of last year to January of this year--is also a result of such factors as the relative proximity of the mainland, the kinds of food available, similarities in taste, and ease in communication as a result of both sides speaking the same language.

Currently, in the coastal areas all around the island, smugglers are mostly bringing in agricultural products with a relatively high value, like peanuts, garlic, mushrooms, dried lilies, red beans, betel nuts, sticky rice, Chinese medicines and fish products. Beef, pork, lamb and intestines are also smuggled in, as well as rare animals like Tibetan Mastiffs.

What is smuggled also changes in response to market conditions. Black melon seeds, for example, were all the rage with smugglers last year, but import restrictions on them were lifted in January and now they have been all but replaced by peanuts and garlic. Or take betel nut. Last year, a typhoon suddenly cut local production, making it a favorite of smugglers in the first half of this year.

Papa went out to sea to buy fish? The invasion of mainland agricultural products to Taiwan has made its mark most noticeably in lower prices.

"In the spring of last year, the price of locally grown peanuts reached NT$36 a Taiwanese pound, the highest price since the retrocession of Taiwan. But come autumn, with the arrival of smuggled peanuts, the price for those locally grown plunged to under NT$20. Farmers suffered big losses and were enraged," says Hsieh Yong-huei of the General Affairs Office of the Yunlin County Farmers' Association.

But it's the same story for other agricultural products--like red beans. Before the anti-smuggling campaign began in 1990, its price in the market was only NT$35 per Taiwanese pound, climbing to NT$50 after the campaign began. The normal price range for mushrooms is NT$800-1,000. As soon as mainland mushrooms hit the island, the price dropped to NT$400-500.

The price of betel nuts has fluctuated most wildly. Two years ago, one betel nut was as expensive as a Taiwanese pound of eggs. Thanks to smuggling, the price has slid to the current NT$3 wholesale and NT$10 retail.

The situation for fish products is relatively more complicated. Chen Wu-hsiung, the director of the Planning Office of the Council of Agriculture, says that except for fish used to make animal feed like mackerel, silver carp and skipjack, most of the other varieties can be legally imported. But there is still large-scale smuggling from the mainland. Because fishermen easily come into contact with their counterparts from across the straits, smuggling, with no port of transfer needed, has become more convenient than importing legally. And it is extremely difficult to distinguish between the fish caught by the two sides--another reason fishermen continue to smuggle.

"How can you tell if it's a Taiwan crab or a mainland crab?" cracks one smuggler buster for Taiwan Customs in Keelung. "It can go back and forth in the sea!" Previously, when smuggling was rampant in the fishing ports, the police used to distinguish mainland and Taiwan hauls by what ropes had been used, but later the smuggling boats would carry their own rope, and it became impossible to find proof.

The fish competition has already had an impact on prices. In particular, the high-priced varieties on which Taiwan fisherman make their living have dropped in price. Per Taiwanese pound, Golder Tai has fallen from NT$400 to NT$200 and Tile Fish from NT$220 to under NT$80. As a result, "fishermen don't go out to catch fish--they go out to buy fish," says Hsiao Chin-hsing, the director of the Keelung Fishermen's Association.

The problems of a period of transformation: The main reason that agricultural products have been under such great pressure is that Taiwan's agriculture is in a period of transition and its competitive power is limited. Labor and land costs are rising, and the farming work force is growing older and made up largely of women. Furthermore, there is a great labor shortage, the scourge of many farms. "Every time at harvest, I have to drive 20 kilometers to get women workers," says Wu Wen-ching, a peanut farmer in Yuanchang Rural Township of Yunlin County. The hardship of which he complains is encountered by farmers all over Taiwan.

Mechanization of farming would of course provide some relief for this problem, but the areas cultivated on farms in Taiwan are too small--unless farmers can collectively hire people to farm over larger areas under united management. Further-more, most of the machinery used on farms in Taiwan is for harvesting. Taiwan still has a long way to go to mechanize in such areas as processing. Furthermore, many jobs still must be done by hand to obtain high quality.

For example, the tea plantations in the north have already become 80 percent mechanized, but the complicated process of curing tea still requires a lot of labor. Picking peanuts with machines will too easily hurt the fruit. Furthermore, the topography in some areas of Taiwan is extremely steep, making total mechanization difficult.

In Pingtan, boats from afar: Let's return to the fishing industry. Taiwan is surrounded by the sea on all sides, and conditions for the development of the fishing industry were originally excellent, but because of the pollution caused by industrial development and improper fishing methods, the Taiwan coastal and inshore fishing industries have fallen on hard times. As a result, the government has strongly advised that fisherman change professions, but there is a massive population of fishermen. According to the Council of Agriculture's statistics, 30,000 boats are currently used for inshore fishing, and 170,000 people are employed. One hundred and seventy thousand fishermen need time for this transition. And now in an era when the two sides are beginning to make contacts, these fishermen with their valuable fishing boats have naturally become point men for "close encounters of the third kind."

As a result, fishing boats don't go out to catch fish, they go out to buy them. "On this side we go all out buying; on that side they go all out catching," says Chuang Hsi-tsang, the director of Keelung Fishermen's Association, who has been to the mainland. If you walk around a major mainland port like Pingtan, you will find a lot of boats from Taiwan. It's different from five or six years ago. They're not over there because they had machinery problems or because a sailor fell overboard or got injured. They're there to get fish. "When they negotiate for fish," he says, "the packaging is included."

Only affecting a handful? The inflow of agricultural products smuggled from the mainland disturbs the market order in Taiwan. It has a major impact on our farmers. But does close examination reveal exactly how many farmers are affected over how large an agricultural area?

Ouly 50,000 hectares are planted with the crops hardest hit--peanuts, garlic, mushrooms, dried lilies, etc.--a small fraction of the 890,000 hectares of cultivated land on the island. But the problem isn't that simple.

The more noticeable impact is at the psychological level.

In these past years Taiwan has gradually opened up its market to agricultural imports: American corn and soybeans, fruits and vegetables from the European Community and tea from Southeast Asia. Taiwan's farmers have had to endure wave after wave of these assaults. It can be said that imports from the mainland are just the latest of these waves, hitting again at an agricultural sector that is simply not competitive enough. But farmers feel that mainland food is different. "First of all, the mainland trade isn't legal, and secondly there's the great difference in size and the convenience of proximity," says Lin Kuo-hua, the director of the Taiwan Farmers' Rights Association. Feeling the pressure from mainland imports, Taiwan farmers have together said, "Thanks, but no thanks."

"Why not just open up Taiwan to food imports from the mainland? Why not just look upon the mainland as an economic area with which we provide mutual support?" asks Wang Cheng-tung, the chairman of Tienhsianghang, a firm that exports the. Chang Fu-ching, a Keelung resident who worked as a fisherman for many years holds that "smuggling makes a contribution to society." "Previously only fishermen and the rich could eat Tile Fish and Golder Tai," he affirms. "Now everyone can afford it. Isn't that a change for the better?"

Many food industry companies have decided to get where the action is themselves and have gone to the mainland to invest in processing plants. President, for example, has set up a tomato canning plant in Sinkiang, and Weichuan has gone to Shanghai to invest in a powdered milk factory.

More than a few Taiwan firms also hold that "mixing cheap imports from the mainland with Taiwan's excellent and strongly fragrant teas" could help the island overcome its problems of high labor and land costs and bring success through re-exporting.

Consumer vs. producer: From a purely economic standpoint, there is nothing amiss with the argument that opening up Taiwan to food from the mainland would benefit business and consumers, but there are other issues to consider, such as food safety and the future of Taiwan's farmers.

Currently, protecting Taiwan's farmers is the reason the government gives for protecting such foods as peanuts, garlic, mushrooms and dried lilies.

Chen Wu-hsiong, the head of the Council of Agriculture's Planning Department, points out that peanuts and garlic are crops grown in coastal regions of the south. Dried lilies and mushrooms are traditional crops grown in mountainous regions of eastern and central Taiwan. These areas share the characteristic of being relatively poor and barren and not well suited for growing other crops. Furthermore, families have farmed the same land for generations. Helping them through this transition requires time.

As for tea, Chiou Yi, a researcher with the Chung-hua Institute for Economic Research points out that the mainland produces 600,000 tons of tea leaves a year and exports 200,000. Taiwan, on the other hand, produces only 20,000 tons. If mainland tea is allowed to be imported, won't Taiwan's tea growers just get squeezed out?

The problem is that a product with a high price has got to mean a product of high quality, or no one is going to buy them.

Lin Kuo-hua points out whether or not Taiwan should allow imports from the mainland is a question with an essentially different meaning for producers and consumers. "Producers want a high price," he says. "Consumers want a low price."

Technology vs. resources: This is also a major flash point in the cross-straits agricultural battle. Low prices are one reason mainland products have been so welcomed here. Another reason is that the quality is also pretty good. Take peanuts from Shantung. While their smell may be slightly inferior, their big shells and big nuts have made them quite popular. Because mainland mushrooms are left out in the sun to dry, they may be dirtier and less sanitary than their oven-dried Taiwanese counterparts, but in their appearance and flavor they lack nothing.

If you want to compete and there's no way to win with price, then you've got to start with a big difference in quality. Mainland teas, for example, will find it difficult to grab much of the market from Taiwan's high-grade teas grown at high altitudes. "If mainland growers want to use the fire-drying techniques used to make Tungting Oolung tea, they have several years of training ahead of them," says S. S. Yang, the head of the Department of Tea Extension at the Taiwan Tea Experiment Station.

Freshness and taste are further weapons in local producers' arsenals. Taiwan's garlic, peanuts and mushrooms will firmly hold onto a share of the market because you can't overlook that Taiwan consumers are used to the flavor and freshness of Taiwan produce. And as for fruit, vegetables and meat, "even if these markets were totally opened up to imports, very few imports could compete," says Chen Wu-hsiung with great confidence.

"Making use of Taiwan's technical advantage is most important," says Chiou Yi, who is making an analysis of the international competitiveness of products from the two sides of the straits. Shipping to Japan relies on live shrimp shipping technology, and producing eels requires processing techniques. The war being fought is one of techniques against resources.

Awaiting production and marketing information: By looking at global agricultural trends, one can see that Taiwan's farmers are in a state of transition, from a yesterday in which production was the be-all and end-all to a tomorrow in which a host of factors--such as conserving the nation's soil and encouraging a return to more natural way of living--are considered. New ways of thinking must bring us past the focus on large-scale production to earn foreign exchange. The government has in recent years worked hard to get agriculture to adjust, calling for reduced production, higher quality and a concept of conservation so that agricultural resources can be used forever. These calls are all in response to major global trends. If not heeded, with or without competition from the mainland, says Chen Wu-hsiung, Taiwan will "get hit hard by other countries."

Today, when we are doing our best to be admitted to international organizations, this kind of adjustment is especially needed. Chen points out that future agricultural development will take the high road toward high quality, low pollution and safety. Only this route will provide defense against foreign competition.

Before reaching that point, the government ought to offer farmers information about reasonable prices and production quantities in order to establish overall market order. The Council of Agriculture's proposal for a system to provide forecasts about mainland production is perhaps an appropriate route to take in this era of agricultural change.

[Picture Caption]

Delicate garlic must be picked by hand. Using machines to harvest it might damage the bulbs.

A warehouse in Tounan Township of Yunlin is packed with smuggled peanuts.

After being cut, garlic is dried out in fields for a day or two before being collected to be sold.

Produce from the mainland is everywhere to be seen on Tihua Street.

This is a site where smuggled food is destroyed in Hsiluo Township, of Yunlin County. After being destroyed, it is mixed with soil to be used asorganic fertilizer.

Since the government got serious about arresting smugglers, the smuggling of drugs and guns has been in decline, but there is still an unending flow of agricultural products.

Because of pollution and over-fishing, the sea off the coasts of Taiwan rarely yields such a bounty.

(Sinorama file photo)

Along with the transformation of Taiwan's agriculture, the once booming fish-farming industry has fallen on hard times.

The aging of the work force is a major problem for farming villages in transition.

Besides being very sanitary and clean, hydroponic cultivation of vegetables can also help to relieve short-term shortages caused by typhoons or cold spells.

(photo by Vincent Chang)

The hilly area the Second Northern Freeway cuts through as it links up Taoyuan, Hsinchu and Miaoli was originally Taiwan's principal tea growing region.

Taiwan must raise the added value of its agricultural products. Canningteas is one example of how to do it.

This farming family's principal source of income is planting flowers and collecting seeds for Japanese clients. The seeds are then shipped back to Japan to be sold. It is an example of an agricultural technique.

The owner of this tea house comes from a long line of tea planters. Unlike their fathers, this new generation of farmers understands management.

A warehouse in Tounan Township of Yunlin is packed with smuggled peanuts.

After being cut, garlic is dried out in fields for a day or two before being collected to be sold.

Produce from the mainland is everywhere to be seen on Tihua Street.

This is a site where smuggled food is destroyed in Hsiluo Township, of Yunlin County. After being destroyed, it is mixed with soil to be used asorganic fertilizer.

Since the government got serious about arresting smugglers, the smuggling of drugs and guns has been in decline, but there is still an unending flow of agricultural products.

Because of pollution and over-fishing, the sea off the coasts of Taiwan rarely yields such a bounty. （Sinorama file photo）

Along with the transformation of Taiwan's agriculture, the once booming fish-farming industry has fallen on hard times.

The aging of the work force is a major problem for farming villages in transition.

Besides being very sanitary and clean, hydroponic cultivation of vegetables can also help to relieve short-term shortages caused by typhoons or cold spells. （photo by Vincent Chang）

The hilly area the Second Northern Freeway cuts through as it links up Taoyuan, Hsinchu and Miaoli was originally Taiwan's principal tea growing region.

Taiwan must raise the added value of its agricultural products. Canningteas is one example of how to do it.

This farming family's principal source of income is planting flowers and collecting seeds for Japanese clients. The seeds are then shipped back to Japan to be sold. It is an example of an agricultural technique.

The owner of this tea house comes from a long line of tea planters. Unlike their fathers, this new generation of farmers understands management.