Food Situation in Taiwan

 (The following are the data from Dr. Wenchi Huang of TaiwanDHRRA in response to a survey questionnaire sent by WRF on the food crisis and the situation of farmers in Asia.)

With regard to the food price issues, here is the answer to the following questions for Taiwan.

The information is based on the recently released statistics by various government agencies (the statistical data are available from the website of the COA):

(1) The Consumer Price Index (CPI) is from the “Price Statistics Monthly in Taiwan Area, R.O.C.,” Directorate General of Budget, Accounting and Statistics (DGBAS), Executive Yuan.  

(2) For the rice price information is from the Agriculture and Food Agency of the Council of Agriculture (AFA of COA)

– Are food prices increasing in your country?

ANS: Using the year 2006 as the base year, the CPI for 2007 is 101.8, which means it rose by 1.8%, and coming to March 2008, the current CPI is 103.12. Compared with March 2006, it rose by 3.96 %.

For the CPI on Food, it was 102.85% in 2007, which is a 2.85% rise compared with 2006. As of March 2008, the index is 106.2, a mere 6.2% increase compared with the base year average, but compared with March 2007, it increased by 9.33%, because the first half of the year usually has a lower price level.   

Which ones?

ANS: The cereal price index start to increase since June 2007, and it was 112.64% higher than 2006, while for rice increased to 106.74% but for other cereals it was 115.24%. The other front runners include eggs (139.51%), poultry (124.04%), edible oil (130.64), dairy products (116.29%), and fish and shell fish (115.16%). But at the same period some food items had sharp drops in price level compared with 2006: vegetables as a whole was only 76.74% in March 2008, the leaf vegetable was only 69.07% in March 2008.     

– Why?

ANS: I have not investigated the reasons, but it is reasonable to see the connection of the increase in the cereal prices, edible oil, eggs, poultry, dairy, fish and shell fish that they can be either attributed to higher energy costs and reliance on the imported cereals. As a support to my observation, the price index for the imported vegetable products rose to 189.60% in March 2008, almost 90% higher than the base year 2006.

 About rice:

– What is happening with rice prices?

ANS: In comparison, the rice and rice products index was 106.74%, and compared with the data from last March, it increased by 7.48%.

– What about its consumption patterns?

ANS: The overall trend for rice consumption has been declining from over 100 kg per person the 1950’s to the recent level of 48 kg per person per year. The per capita consumption of rice has been stabilized for the last few years. There is no evidence that the relatively high wheat prices (compared with rice) on the consumption pattern, but it is possible that it would have positive impact on rice consumption to some degree.

– What about its production? Are they shifting to other crops?

ANS: The paddy price in 2007 was only 95.8% of 2006 (while the rice price in 2007 was 99.82% of the 2006 level). In 2008, the paddy price level in March 2008 is 119.33% of the 2006 at the wholesale level. But the price level for dry land crops (include other cereals) was 194.97% in March 2008. The production pattern for paddy is to produce for two seasons and then rotate with vegetables during the winter months. The vegetable prices are very unstable compared with rice. For the past few weeks the onion producers are facing the problem with good harvest. The newly harvested onion already crowded all the storage capacity in the region that the farmers only harvest the best quality onions on the field. We have set aside program for paddy rice because of the declining consumption of rice. With the price level of rice rising, there are some speculations on the interest to recover some of the rice production. But the production costs are still higher than the prevailing price level that dramatic increase in land area devoted to rice production is not likely. There are some interests in shifting to bio-energy crop production.

– What is your Government doing?

ANS: The self sufficiency rate for rice is maintained at 95.5% as of 2006. There is no updated information available at this point. However, due to the concerns about the increase in food price in general, in Nov 2007, the government announced in the news release to assure the public that the domestic supply for rice is sufficient for consumption. The public rice stock is on a constant check, and if the amount circulated in the market is low or the retail price is higher then the public stock will be released. As of Feb 2008, the amount of the public released to the domestic market has increased 224% compared with Feb 2007. The lower supply of rice for last year was attributed to a typhoon that severely damaged the crops during summer months.  

– What do you think should be done?

ANS: Cereal consumption for consumers is declining over time, and the share of the item on the consumer’s income is not very high. And many people even do not even consider the intake of carbohydrate for the diet or health concerns. Instead the choice of the alternatives such as on fresh vegetable and fruits is abundant. The animal industry is shifting its feed source from the expensive imported cereal to the domestically produced rice for feed. But unless the rice can be produced more cost effectively, farmers are not convinced that they can stay competitive with the lowering of cereal price. I think the issue would be what we should be doing for the development of the agricultural sector in the long run regarding to the policy on land use for food/fiber/fuel.

– What are happenings to the small farmers?

ANS: The guaranteed purchasing price for public rice stock has been raised after almost a decade of fixed price. This would increase the incentive especially for the rice farmer to supply the rice to the government. However, for farmers who are part of the groups that produce the good quality branded rice sell much better offer price.

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