Agricultural biotech to become core industry for Taiwan

Michelle Hsu, The China Post

While biotech is commonly believed to be one of the most promising industries for the 21st century, Chen Hsi-huang, chairman of Council of Agriculture (COA), said that the agriculture biotech sector — a combination of traditional agriculture and modern biotechnology — could become the next mainstay to bolster Taiwan’s economic growth.

“Taiwan’s economic miracle has been widely praised over the past two decades and Taiwan has long been recognized for its achievement in agricultural technology,” Chen said. Building on its existing achievements, he added, Taiwan should continue its efforts to develop agricultural technology and maintain its world’s leadership by combining it with today’s modern biotechnology.

Due to the limited land and natural resources on the island it has long been a focus of government policy to promote the productivity of the agriculture industry through upgrading agricultural technologies. During the ’60s and ’70s, Taiwan was praised as a model among developing countries for its agricultural development, and transfer of agricultural technology was a major favor that the island could offer to countries in the third world. The COA still works closely with the Ministry of Foreign Affairs (MOFA) to grant this favor to those countries with diplomatic ties to Taiwan. The government has noticed the great potential of the emerging agricultural biotech sector and has allocated a budget of NT$10 billion for development of this sector over the next five years, far higher than the NT$3.2 billion budget for gene research.

Technological advances

“Thanks to technological advances, Taiwan’s agricultural industry has indeed made great progress in raising its productivity over the past decades, which has even led to an oversupply problem since the 1980s,” Chen observed. The problem has resulted in many local farmers suffering serious losses, which could worsen when the domestic market is gradually opened to foreign food products in line with the government’s policy for WTO entry.

The COA has worked out a two-pronged solution to reduce the impact of WTO entry on local farmers, according to Chen. First, the government has set aside funds for purchasing agricultural products at supported price levels in cases where market prices have been cut so sharply by severe competition that farmers are hardly able to survive the slashed profit margins.

Second, the COA will help farmers apply modern marketing strategies to sell their products effectively. On one hand, Chen noted, the best quality food should be packaged as delicacies so as to generate higher added-value and sell at higher prices. Besides looking like a delicacy, the quality packaging should make the food easy to carry and able to be preserved longer.

In addition, the government will help create channels for farmers to ship their products abroad. Currently, a number of farmers have followed the government’s policy by exporting their products, and the government will continue reinforcing the policy, hopefully to make overseas markets the major outlet of Taiwan’s agricultural products. “Taiwan’s agriculture industry is small in scale when compared to those in the U.S., Canada and European countries, but the quality of Taiwan’s agricultural products is not necessarily inferior to those produced in the big countries,” Chen noted.

Efficient marketing

Technological advance not only raise the productivity of Taiwan’s agriculture industry, but also will improve the quality of agricultural products. Under the COA’s marketing strategies, Taiwan’s agricultural products are targeted at wealthy areas where the annual GDP per capita exceeds US$6,000, such as the U.S., Japan, European countries and the major cities in mainland China. In Taiwan, Chen observed, higher-priced food often sells better than the lower-priced alternative, indicating that people in wealthy countries are willing to spend more on pursuing better quality food. At the moment, he said, food consumption accounts for only 20 percent of the daily consumption of local residents. “The percentage could be raised, not through increase in quantity but improvement in quality,” he said.

For either export or domestic sales, Chen has noted the importance of an effective distribution system to a successful marketing strategy. He therefore advocates strategic alliances between farmers and distributors, with the latter effectively distributing the food produced by the former to the places in need of the food. Confident about the potential of the biotech industry, Chen said that modern biotechnology should provide an effective solution to solving the problem of limited land and natural resources around the island. As an example he said that traditionally plants must be cultivated in soil, but today’s technology makes it possible for plants to grow in air. “A biotech lab in Taichung has grown mushrooms in an air bag and distributed them on the market around the island,” Chen said. Similar technology may be applied to other kinds of plants later.

In Taiwan, two thirds of the land is mountainous, leaving only 870,000 hectares suitable for farming and livestock production. With such limited land resource, Chen believes that the most urgent policy for the island is to develop the technology for cultivating plants beyond the limitations of land usage. Currently, there are 790,000 farming households around the island, and each household has approximately one hectare of land under cultivation. With application of new biotechnology the number of Taiwan farmers could be sharply reduced to only 150,000 households.