The Council of Agriculture (COA) has reviewed and proposed to change its traditional price guarantee policies of rice for the purpose of directing Taiwan agriculture towards sustainable development and strengthened competitiveness. The change have been proposed in the spirit of promoting sustenance, revision and innovation. Everything is integrated to give impetus to the blueprint for “New Agricultural Movement - Taiwan’s Agriculture Brightens Up”. Our country puts special emphasis on rice. To give importance to agricultural development, food safety and ecological conservation, the COA has initiated the reform of this rice price policy, “modifying the system of protecting the price of rice through the direct payment system.” This already has become one of the most essential reform items.

The COA indicated that due to the trade liberalization and the WTO agriculture negotiations leading to further substantial reduction of agricultural subsidies, the domestic rice price policy has had to be revised. The COA has considered the requirements toward sustainable development of the domestic rice industry and has turned to the experiences in rice policy adjustment in neighboring countries like Japan and Korea for reference. The current policy is supposed to be replaced by the direct payment policy that conforms to the WTO agricultural agreement. At the moment direct payments consist of two parts fixed price as well as variable price support. As for adjustments affecting the farmers’ incomes, the plan is- give fixed subsidies to guarantee farmers basic income. On the other hand, if the policy change does not guaranteeenough the farmers’ income , remedy will come from the variable subsidy. Fixed and variable payment standards and the level of target price are still in the trial phase. Briefings are being held in many places to get feedback for consideration. The COA noted that the standards of fixed and variable payments as well as target price are still under trial. The goal is to prevent losses for the farmers who are about to absorb something in the range of a 15% decline in market price after the adjustment.

The COA further explained that the food stock reserve is going to be brought by public bidding after the government abolishes the Rice price guarantee Policy. In the first three years, the amount of purchasing will decrease progressively, meaning 200,000 tons, 150,000 tons and 100,000 tons respectively. This method will help mitigate the impact on the market. After three years, the authorities will review the import volume and the stocks, inviting tenders to bid in order for maintain reasonable stock level. The COA stated that after the direct payment policy has been put to work, the storehouses (including farmers’ associations and private authorized storehouses), which are authorized to be in charge of public grain, can participate in the public bidding as well as plunge into fixed investment in the public grain business. The COA mentioned that in the light of the timetable for the plan of decoupling, direct payment system will be accomplished by the end of this year. The Executive Yuan approved will be expected in 2007; a series of comprehensive promotion activities will be held in 2008 and finally the new policy will come into practice in 2009. However, just considering removing a rice price guarantee system enforced in the last 30 years involves heavily the rights and interests of the farmers and the farmers’ which organizations are in charge of the business regard to public grain.. The COA is to engage earnestly in communication and policy education as well as gather the opinions for revisions in order to draw up the measure for direct payment for rice within the established time frame. Besides, the COA will come up with a complete set of related plans to promote this policy’s implementation.

The COA stressed that the core value of the COA lies in safeguarding the rights and interests of the farmers. The promotion and planning of decoupling direct payment policy is on the premise that farmers can be assured that their incomes will not be affected. Moreover, this policy encourages farmers to produce high-value and high-quality rice, which should work better at increasing the rice-growers’ income than the current policy. Hence, it is suggested that the farmers branch out to produce rice with excellent qualities and distinctive characteristics to enhance their competitiveness in the market. The COA expected to play the role of the farmers’ most supportive friend and will continue to carry out all kinds of guidance and assistance for the rice industry in the future.