(1) Agricultural Development following Taiwan's Accession to the WTO

In compliance with its accession commitments, Taiwan gradually lowered tariffs on agricultural products, opened its market, and cut down some agricultural subsidies after becoming a WTO member in 2002. To ease the impact of WTO accession, the COA started promoting various industrial adjustments and countermeasures actively even before its accession to WTO. After joining WTO, the COA continued to strengthen agricultural import monitoring mechanisms and import management system, implemented short-term price stabilization measures for agricultural products, and performed relief measures for products harmed by import. In particular, the COA enhanced production-marketing assistance measures on agricultural products that were susceptible to imbalance supply and demand, and vigorously promoting adjustment strategies to upgrade agro-industry. Through the administrative efforts of the COA, Taiwan's agricultural output had a slight increase three years after accession to the WTO. Agricultural gross production value in 2004 was approximately NT$386.5 billion, an increase of 8.0% compared to 2003 and an increase of 9.6% compared to the year prior to WTO accession (2001).

As to agricultural labor, 642,000 people were engaged in agriculture last year. Due to economic recovery and the rapid shift of labor to non-agricultural sector, this figure dropped by 54,000 people compared to the 696,000 people in 2003. As to agricultural trade, the agricultural imports in 2004 was US$8.86 billion, an increase of 13.1% compared to 2003; while agricultural exports was US$3.55 billion, an increase of 9.8% compared to 2003. Both agricultural imports and exports flour-ished in 2004. As to individual products, exports of mangoes increased by 30.5% and phalaenopsis orchid increased by 10.9%, showed that international marketing of Taiwan's agricultural products was paying off. In general, although the impact on the agricultural sector since accession to WTO was less than expected, the effect of open market was only gradually becoming apparent. Among the various subcategories of agriculture, the rice and fruit industries were worst hit by Taiwan's WTO accession. This was chiefly due to the large number of rice farmers and the slow-growing nature of fruit trees, so production adjustments had relatively slowed down. However, the COA's earnest implementation of price stabilization measures in 2004 resulted in an 18% increase in the prices of rice and fruits compared to 2003, effectively eased the impact of WTO on the domestic rice and fruit industries.

As to the trend towards international trade deregulation, the new round of agriculture negotiations in WTO is still going. Aside from sending delegates to participate in various negotiations, the COA had formed an alliance with member states sharing similar ground on agricultural issues. The G-10 group was formed during the 5th WTO Ministerial Conference held in Cancun, Mexico in September 2003, consisted of Taiwan, Switzerland, Korea, Iceland, Norway, Israel, Japan, Bulgaria, Liechtenstein, and Mauritius. Members of the G-10 group expressed common views concerning open market on agricultural products and other issues, adopted the same stance in agricultural negotiations, and safeguarded the rights and interests of Taiwan. WTO reached a consensus "July Package", an agricultural negotiation framework, at the end of July, to serve as a basis for the negotiation of tariff concessions. In its preliminary assessment, the COA concluded that the negotiation framework had little effect on the development of Taiwanese agriculture.

As a whole, although the accession to WTO had exposed Taiwan to large amount of low-price imported foreign agricultural products, it also aided export of Taiwan's quality agricultural products. Taiwan can make use of its advanced technology to develop high-value agricultural products, or use inexpensive imported agricultural raw materials and employ our superior processing technology to develop high value-added processed goods that can be marketed overseas.

(2) Implementation of Agricultural Adjustment Measures

The COA has actively promoted various countermeasures to deal with the effects of WTO membership. The followings were the various countermeasures taken since Taiwan's accession to WTO :

Special safeguard measures on imports were implemented to strengthen the monitoring and warning system of agricultural products. In accordance with Taiwan's WTO commitments, tariff quota system was adopted to gradually open the market for originally controlled or restricted agricultural products such as peanuts, garlic, chicken meat, and liquid milk. In addition, rice importation system was changed from limited imports to tariff quota system since 2003 to moderately protect domestic industry and race against time to get adjusted to the open market. Besides, the COA had fortified its observation on the production and marketing status of major sensitive agricultural products that suffered greatly from imports, and agricultural products that were still over producing or those production periods that were more concentrated, and which prices were more sensitive. The COA has also established an "Agricultural Product Import Monitoring and Warning System" to monitor the import volume and prices of major imported agricultural products, and to strengthen the implementation of various price stabilization measures. Based on the"Explanatory Notes Concerning the Levy of Extra Duties on Agricultural Products," special safeguards (SSG) would adopt 15 agricultural products including rice, peanuts, and Asian pears. The SSG measure allows Taiwan to levy extra tariffs on agricultural products when import volume exceeds the trigger quantity, or when import prices lower than 90% of trigger prices. SSG measures, in 2004, were implemented on agricultural products including rice, peanuts, Asian pears, pomelos, persimmons, sugar, betel nuts, dry shiitake mushrooms, dry day lilies, garlic, chicken legs and wings, and liquid milk.

In order to implement short-term price stabilization measures, the COA has drawn out an emergency measures in January 2004 for agricultural products, and the prices at the place of origin were lower than 95% of the direct production costs. Depending on the characteristics of the product, the COA adopted measures such as purchasing, processing, cold storage, producing organic fertilizer or animal feed, and destruction for the purpose of stabilizing market prices and reduction of farmers' losses. In addition, the government implemented early preventive measures when it forecasted that there would be an over production, such as supervisory reduction in planting or production, sales promotions, regulate production periods, plant green manure as an alternative, strengthen cultivation management, etc. to prevent prices from falling below 95% of direct production costs. These measures were implemented for citrus, native chickens, broiler chickens, muscle-ducks, geese, and garlic in 2004. Also, the COA established the supply and demand imbalance measures for 30 items of agricultural, fisheries, and livestock products, and implemented supply and demand stabilization measures and sales promotions on litchis, mangoes, milkfish, and hogs. The implementation of emergency supply and demand imbalance mechanisms for agricultural products, including onions, staple vegetables, and green plums, effectively eased the issue of imbalance supply and demand last year.

With regard to adjustment measures, the government has continued to utilize the "Import Damage Aid Fund" on industrial adjustment measures. The COA implemented the industrial structural adjustment programs for fruit, tea, rice, peanuts, dairy cattle, hog raising, poultry, and aquaculture for the purpose of improving agricultural competitiveness gradually. The Executive Yuan passed the "Program to Strengthen International Marketing of Agricultural Products" in 2003 in an effort of increasing agricultural product exports, expecting to spend a NT$2.26 billion budget over a period of 3 years to augment the international marketing of agricultural products, and steer domestic agro-industries develop toward high quality and high economic value products. Eventually, Taiwanese agricultural industry should move toward a quality, safe, recreational, ecological and sustainable industry.