Ensuring the welfare of the rural population

Welfare benefits (pensions) for elderly farmers

To care for Taiwan’s aging farmers, in June of 1995 the government initiated a program of old-age “welfare benefits” (also called “pensions”) for elderly farmers. The amount of the benefit was further increased as of January 1, 2012, to NT$7,000 per month, which is issued to all qualified farmers 65 years of age and over. In 2013 the COA dispensed NT$56.26 billion in welfare benefits to 696,000 persons.

The regulations governing pensions for elderly farmers now include provisions to disqualify wealthy persons from receiving the benefit. As for the fiscal year that will provide the comparative basis for income, in the interests of ensuring fairness in implementation as well as uniformity across the country, on December 28, 2012 the COA announced that for “personal total income excluding income from agriculture” over the previous fiscal year, the COA would use the categories of income for “personal total income tax” for the 2011 fiscal year, as provided by the Fiscal Information Agency of the Ministry of Finance, as the standard criteria.

Taking into account the nation’s limited financial resources as well as the principles of fairness and social justice, starting on January 1, 2013, new applicants for the welfare benefit for elderly farmers have been subjected to exclusion on the basis of wealth. Following comparisons of income and assets of applicants, in 2013 a total of 1,279 applicants were disqualified (4.9% of all new applicants in 2013), and are therefore unable to collect the welfare benefit.

State purchases of rice for public stocks

Rice is the most important crop in Taiwan. To support incomes of rice growers and stabilize prices of this critical staple, since 1974 the government has been purchasing paddy at guaranteed prices. In recent years, the situation in rural communities has changed, so since the second crop of 2011 the government has adapted to allow farmers to sell fresh/wet paddy to the government under this program. In 2013, fresh/wet rice constituted 69% of the paddy sold by farmers to the state, 10% higher than the figure for 2011.

In 2013, for the first crop of the year, the government purchased 366,000 metric tons (MT) of paddy for public stocks; during the purchasing period, the market price was, on average, NT$22 per kilo. For the second crop, the government purchased 121,000 MT, while the market price averaged NT$22.6. Total state purchases for the year were 487,000 MT. Calculating based on the differences between the guaranteed purchase prices and the market prices, purchases for public stocks increased the incomes of rice farmers by about NT$1.2 billion.

Relief for agriculture affected by natural disasters

In 2013 there were 11 occasions when inclement weather resulted in the COA providing natural disaster relief to agriculture. These included: (1) the February-March drought, (2) the tornado and strong winds on April 6, (3) incessant rains in April, (4) low temperatures in April, (5) extremely heavy rains in May, (6) Typhoon Soulik, (7) the July drought, (8) hailstorms in July, (9) Typhoons Trami and Kong- Rey, (10) Typhoon Usagi, and (11) incessant rains in November. Total relief funding was NT$2.03 billion, benefiting 82,000 households, which helped farmers and fishermen to quickly resume operating, to restore production, to reduce losses, and to enjoy financial security in their daily lives. In addition, the COA assisted 42 farmers and fishermen to obtain low-interest natural-disaster recovery loans, totaling NT$20 million.

The COA has been training individuals in the skills necessary for assessing and reporting on conditions in the event of natural disasters, so as to increase their professional capabilities. We have also purchased digital tools (such as digital cameras that have GPS tracking, tablet computers, and so on) to make on-site investigations more efficient, enabling us to deliver relief more quickly and effectively. Finally, based on forecasts from the Central Weather Bureau, the COA issues timely press releases, and through our own website we constantly update disaster relief information in real time.

Subsidies for fuel used in farming and fishing

Under the COA’s present policy to assist in the purchase of fuel for farm machinery, in addition to a subsidy of 50% for increases over the base price, there is also an exemption from the 5% business tax (as per the Value-Added and Non-Value-Added Business Tax Law). The owner of farm machinery must simply get a certificate from his or her local government certifying that he/she uses the farm machinery in question, and then using this certificate the farmer can purchase fuel from any local gas station and enjoy the exemption. In 2013, the COA subsidized the purchase of NT$60 million of fuel for use by farm machinery.

Subsidies for diesel fuel for fishing boats are calculated based on a 14% fluctuation in fuel prices. In 2013, the COA provided subsidies to fishermen for a total volume of 687,000 cubic meters of diesel fuel, with subsidies totaling NT$2.29 billion. Since 2009, gasoline for fishing boats has been brought within the fuel subsidy program. In 2013, the COA provided gas subsidies totaling NT$99.22 million to 5,594 boats.

Subsidies for fertilizer price differentials

Most of the raw materials for fertilizers needed in Taiwan are imported. To ensure a normal supply of fertilizers, since May 30 of 2008 the COA has been implementing a program to adjust the price of fertilizers and stabilize fertilizer supply, with the government subsidizing differentials for increased prices to reduce the burden on farmers. In 2013 subsidies were continued for 10 major types of chemical fertilizers. Total costs of the subsidy program through the end of 2013 were NT$21.7 billion.

In 2013 international prices for raw materials for fertilizers showed a trend toward correction. Taking into account the most effective use of overall resources, the government continued to absorb higher prices, thereby keeping the purchase price stable for farmers. For all of 2013, the cumulative amount of subsidized fertilizer was 836,000 metric tons, with subsidies totaling NT$2.74 billion. After taking into account the subsidies, prices for fertilizers in Taiwan were lower or comparable to those in neighboring countries like Japan and mainland China.

Educational subsidies for the children of farmers and fishermen

In order to ensure that the children of farmers and fishermen do not, for economic reasons, miss out on the chance to get high-school and college educations in Taiwan, a program was launched in September of 2003 to provide financial support for these children. In 2013 a total of NT$1.27 billion in academic subsidies was paid out, helping 166,000 children continue their education.

Fishing boat safety, insurance, and compensation

The Fishery Radio Station of the Fisheries Agency of the COA provides 24-hour information on weather and sea conditions, as well as sea rescue broadcasting services, helping to keep fishermen safe while operating at sea.

To encourage owners of motorized vessels of less than 100 tons to sign up for insurance, on October 9 of 2012 the COA announced new “Regulations Governing Preferential Insurance for Owners of Powered Fishing Vessels,” thus offering fishermen even more at-sea protection. On June 26, 2013, Article 4 of these Regulations was amended so that applications for proportionate subsidies can be filed within three months prior to, or three months following, the termination of the insurance period. In 2013, a total of 4,538 insured craft benefitted, with total subsidies reaching NT$45,556,938.

To provide even greater protection for the livelihoods of fishermen, regulations (called “Directions on Assistance for Taiwan Fishing Vessels in Maritime Disasters”) were adopted to provide compensation in the event of at-sea incidents causing harm to vessels or persons. Owners of fishing vessels can apply for compensation if, as a result of fire or of irresistible forces during at-sea operation, it is impossible to continue operations. Amounts depend on the tonnage or class of the vessel. Compensation of NT$1.455 million was paid out for 30 vessels in 2012. As for persons harmed by at-sea incidents, in 2013 compensation of NT$2.01 million was paid out to 60 individuals.

Livestock insurance

Based on the Agricultural Development Act and the Livestock Insurance Regulations, the livestock insurance system is run by local-level farmers' associations, with the government playing a guidance role. Livestock insurance helps spread the risk of raising livestock, discourages illegal trade in carcasses, improves the image of the industry, and raises consumer confidence in domestic pork.

Livestock insurance includes death insurance for dairy cows, death insurance for hogs, and transport insurance for hogs. Of these, death insurance for hogs has been extended to every city and county in Taiwan (including all five municipalities and even offshore islands). In 2013, a total of 8,631,105 head were insured. Of these, 16,803 were dairy cows and 8,614,302 were hogs. The program has not only won strong support from farmers, it has effectively prevented illegal sale of carcasses: In the entire year there was only a single case of illegal sale of a livestock carcass.

An up-to-date real time agricultural information system

The entire government in Taiwan is aiming to utilize information technology more effectively to communicate with citizens, so here at the COA our role is to provide integrated government information services that are oriented to the needs of rural residents, especially farmers. Our information system keeps farmers apprised of agricultural policies, rapidly and efficiently transmits information related to agriculture, and expresses to rural residents our concern for their well-being.

Through the “electronic bulletin boards” constructed in 430 farmers’ and fishermen’s associations nationwide, we broadcast dynamic audio-visual information that is important to rural producers. In 2013 we broadcast: (a) 200 items of real-time current news; (b) 135 cards per day of agricultural information by region; (c) real- time trading information for agro-products, updated four times daily; and (d) a cumulative total of 1,000 short audio-visual pieces with agricultural content or policy announcements. In total, more than 10 million separate broadcasts were made. We also updated mobile APPs to increase the efficiency of e-government services and, through mobile telephones and other communications technology, provided individualized information, based on user subscriptions, over 1.36 million times.

Market adjustment mechanisms for agro-products

The COA takes appropriate measures to ensure balance between supply and demand in the market for agro-products. By tracking production volume, making forecasts, and issuing “early warnings,” we control production levels and ensure that serious market imbalances are avoided before they even occur. Market adjustment work is divided based on the “Division of Responsibilities between Central and Local Governments with respect to Production and Marketing Imbalances of Agro-Products.”

With respect to mass-consumption vegetables, the COA has set up an Internet reporting system for seedling supply, and we issued six notifications in 2013 that the registered area of seedlings exceeded the early-warning level. Meanwhile, we also coordinated the state purchase of NT$8 million worth of oranges, olives, lichee, and bananas. We also handled clearing of fruit orchards and replanting them with different varieties over 39.8 hectares, and assisted in marketing 4035 metric tons of domestic agro- products.

The COA convenes regular conferences on the supply of hogs, sheep, and poultry in the market, and implements production-guidance measures to (i) ensure a balance of supply and demand, (ii) stabilize farmers’ incomes, (iii) maintain prices at a steady level, and (iv) produce enough to meet demand in the domestic market. Also, we have set up price-reporting stations at 24 wholesale fish markets and at 16 aquaculture locations; in order to keep seafood prices stable, each day we monitor and analyze conditions, and coordinate fish markets and production associations to allocate their stored stocks or substitute products.

Permitting armed private security on long-range fishing ships

In recent years, piracy has been a major problem in the waters around Somalia, threatening the lives and safety of all ships operating in those waters. The Fisheries Agency of the COA, responding to requests from the fishing industry, proposed amendments to the Fisheries Act to permit fishing boats to hire private armed security personnel, in order to protect the lives, property, and safety of crews and allow operations to continue unhindered.

The proposed amendments to the law came into effect on August 21, 2013. The Fisheries Agency has already convened relevant agencies to discuss follow-up administrative regulations that will govern the actual hiring of private armed security personnel by fishing ships. A preliminary announcement was made on November 11, 2013, that when relevant bylaws have completed the regulatory process, then any fishing industry persons operating in maritime areas where there is high risk of piracy or other armed danger may hire armed security personnel in advance.

Strengthening rural functional organizations

Farmers’ associations

The COA oversaw the completion of the 2013 elections for new officials at farmers’ associations (FaAs). Moreover, in accord with the amendments to the Farmers’ Association Act that were promulgated on January 30, 2012, the COA guided the formal establishment of the National Farmers’ Association on April 18, 2013. The system has been streamlined so that it now has only three levels. To conform to the new three-level system, the COA also amended relevant regulations including: (1) the Enforcement Rules for the Farmers’ Association Act, (2) the Regulations on Personnel Management at FaAs, (3) the criteria for most staff and standards for allotment of personnel expenses at FaAs at all levels, (4) the regulations for the certification of qualified members and screening procedures at base-level FaAs, (5) the Regulations for Establishment of Companies, or Company Investments, by FaAs, and (6) the Regulations Governing the Custody and Application of the Legal Reserves, Public Interest Funds, and Funds for Mutual Aid and Joint Training among Fishermen’s Associations at All Levels.

Irrigation associations

Proceeding on the basis of the Irrigation Associations Organization Act, the COA has been monitoring and guiding irrigation associations (IAs) and, in 2013 we continued to work to make their structures and operations more sound, amending regulations that included: (a) those governing agendas for meetings of commissioners of IAs, (b) those governing election and recall of IA chairmen, and (c) those governing election and recall of commissioners. To ensure that IAs do not become a financial burden on farmers, the COA provides subsidies to pay membership dues. In 2013 these subsidies totaled NT$2.23 billion.

Fishermen’s associations

The COA oversaw the 2013 elections for officials of fishermen’s associations (FiAs). Moreover, in accord with the amendments to the Fishermen’s Association Act that were promulgated on January 30, 2012, the COA guided the formal opening of the National Fishermen’s Association on November 8, 2013. The system has been streamlined so that there are now only two levels of FiAs. To conform to the new two-level system, the COA also amended relevant regulations including: (1) the Enforcement Rules for the Fishermen’s Association Act, (2) the Regulations on Personnel Management at FiAs, (3) the Regulations for Establishment of Companies, or Company Investments, by FiAs, and (4) the Regulations Governing the Custody and Application of the Legal Reserves, Public Interest Funds, and Funds for Mutual Aid and Joint Training among Fishermen’s Associations at All Levels.

Developing high-end agro-products

Rural functional organizations can play a critical role in developing sophisticated, unique local gift, souvenir, and boutique products of high quality and with high value-added. To encourage them to do so, the COA has for several years now been annually selecting the Top 100 Products of Farmers’ and Fishermen’s Associations (F/FAs), and we did so again in 2014. All selected products must meet the criteria: “manufactured with the most rigorous standards and produced locally.” Of 360 items entered in the competition, 102 items from 89 F/FAs were selected. From December 26-29 of 2013, the COA organized a large exhibition of these products at National Taiwan University’s field house. The event attracted 260,000 visits and resulted in NT$8.11 million in sales, and it is estimated that it will generate follow-up business exceeding NT$200 million.

Improving the functioning of the rural financial system

Diversifying financial services of rural organizations

To enhance the quality and competitiveness of services provided by the credit departments of farmers’ and fishermen’s associations (F/FAs), the COA assigned the Agriculture Bank of Taiwan (ABT) to integrate the operations channels of F/FAs. In June of 2010, the ABT and F/FAs signed comprehensive contracts to construct a complete upward-and-downward financial services system. By the end of 2013, 303 F/FAs (with a total of 1169 credit departments) could process different types of payments on behalf of institutions, organizations, and businesses, such as processing payment of insurance premiums for welfare benefits for elderly farmers; payment of water, electricity, cable TV, and telecommunications bills; payment of the fuel tax for motor vehicles; and credit card repayments on behalf of ten banks. There were over 26.75 million such transactions, totaling nearly NT$99.3 billion.

Improving management of credit departments of rural organizations

◆ The COA has continued to take measures to improve operations at the credit departments of farmers’ and fishermen’s associations (F/FAs) Total deposits at credit departments of F/FAs in 2013 were NT$1.6 trillion, while outstanding loans were NT$885.7 billion. Before-tax net profit was NT$4.9 billion. The non-performing loan ratio was 1%, the lowest in 19 years. Of the 303 F/FAs, the non-performing loan rate was less than 1% at 198, of which 46 boasted a rate of 0%, showing excellence in loan quality.

◆ There has been a marked improvement in the operations at credit departments of rural functional organizations. The COA will persist in keeping close track of operational conditions at all such institutions, help out when problems are discovered, and strengthen monitoring. We will equally emphasize oversight and guidance, continue to advise credit departments on how to improve management, and work to maintain stable development in the agricultural financial sector.

Continuing to process policy-oriented special agricultural loans

In order to promote agricultural development and increase rural welfare, the COA continues to process policy-oriented special agricultural loans. In 2013 we provided NT$20.8 billion in new loans to 46,000 farmers and fishermen. At the end of the year, the total of outstanding loans was NT$100.3 billion, benefiting 250,000 farmers and fishermen. We also assisted about 32,000 farmers and fishermen to use the agricultural credit guarantee mechanism so that they could raise NT$15 billion of capital.