OPINION: Taiwanese Farmers Need Co-Ops, Not Brands or E-Tail

OPINION: Taiwanese Farmers Need Co-Ops, Not Brands or E-Tail
Photo Credit: Kyle McDonald @ Flickr CC By 2.0

What you need to know

Despite the good intentions behind recent efforts by young people to help Taiwanese farmers market their products, the agricultural sector faces more fundamental challenges.

In recent years young, tech-savvy Taiwanese have been trying to help the country’s farmers market and sell their products online. While acknowledging their good intentions, one commentator believes that more fundamental issues facing many small-scale farmers need to be resolved first.

In an opinion piece for the Chinese-language edition of The News Lens, Luo Ping (羅平) says the key to improving Taiwan’s agricultural industry is not marketing or branding.

Luo, a commentator on agricultural issues in Taiwan, says efforts to change the retail model do not address the high production costs, inefficiencies and low margins which cripple Taiwan’s many small-scale farms. Many farmers still lack access to advanced technologies and face difficulties guaranteeing product quality.

Another issue, he says, is that large distribution companies control most of the resources, including fertilizer and pesticide factories, as well as access to mass markets.

Luo believes that if farmers can scale-up their production and improve the consistency of their product quality, they will have better leverage when negotiating with distributors. Currently, he says, farmers often sell at low-prices to avoid their product going to waste.

He points to a successful pineapple co-operative operation in Pingtung, southern Taiwan. The cooperative, founded in 2005, has become one of Taiwan’s largest pineapple suppliers, with 30% of its product exported to Japan and annual sales of NT$40 million (US$1.2 million). Jointly supplying contracts means the group’s 26 members take a much higher margin than they would acting individually, Luo says.

Taiwan’s agricultural sector faces several long-term issues including land scarcity, an ageing workforce and low wages. Most farmers have small-scale operations – arable land in Taiwan is only 1.02 hectares per household, smaller than 1.56 hectares in Japan. Total agricultural production has grown slowly, increasing about 1 percent to 2 percent each year over the past 25 years. In 2015, the average annual income per household was NT$229,000 (US$7,200), and the value of sales from the sector declined by 3 percent.

From 1990 to 2014, the number of farmers almost halved. And nearly half of the farmers are now over 55 years old, reflecting that the young generation is reluctant to enter the industry. Recently, however, there has been rising social awareness about issues facing people in rural areas.

First Editor: Edward White
Second Editor: J. Michael Cole