The Legislative Yuan held the fourth public hearing about the Draft of the Special Act for Free Economic Pilot Zones on Apr. 10 , 2014 , and some scholars and experts questioned the promotion of value-added agriculture in FEPZs. The Council of Agriculture (COA) took the opportunity to explain that agricultural development involved diverse facets and issues, such as globalization, localization, farmer's welfare, land utilization, and resource conservation. The COA respected the constructive suggestions and comments from all perspectives. The philosophy of FEPZ lies on systematic innovation and novel industrial operation; therefore, the COA broadly took in various opinions, protect the local farmers' interest while promoting the policy, review and adjust sensitive agricultural development policy in compliance with international economy. In this way, Taiwan's new agricultural value chain could be established gradually.

The promotion of agricultural processing simultaneously drives up the demand for domestic raw materials

Some scholars and experts question that the policy of value-added agriculture in the pilot zones might make domestic agricultural products being replaced by inexpensive foreign materials. The COA says that one of the visions for the development of value-added agriculture is to “make the original cake bigger” and “create a new cake.” It is expected to see that the expansion of downstream industries can boost the development of upstream sectors, closely integrate the industrial chain, and synchronously help the use of domestic agricultural raw materials. T-Ham Co., Ltd., which attended one public hearing, also notes that when using raw materials, a company will not consider low cost only. Product safety, stability and special flavor are key factors in opening up markets. Taking its recently developed Taiwan-flavor beef noodles as an example, the company creates a new high value-added product by using Australian beef and bones, stewing homemade onions and carrots as the soup, and putting Yunlin’s sauerkraut aside. So far this product has passed the test by the foreign customers. After mass production for export in the future, it will increase the production of domestic agricultural materials and mutually enjoy value-added benefits. So long as agricultural enterprises profit, they will recruit more employees naturally. This will increase domestic employment opportunities and thus activate domestic market consumption.

Based on the current industrial development, the government will screen the type of companies applying for entering the zones

Some scholars are worried that parts of domestic sensitive agricultural products might suffer a severe impact due to the promotion of value-added agriculture. Regarding it, the COA stresses that all countries in the world, in response to the liberalization process, would synchronously protect their local sensitive agricultural industry. When Taiwan entered the WTO, the COA set up a “rescue fund for agricultural products subject to import damage,” of which the purpose is indeed to protect Taiwan’s local sensitive agricultural sector. In the future, this fund can be used for the entry of TPP and RCEP. The COA further explains that after the Special Act for Economic Pilot Zones is passed by the Legislative Yuan, it will draw up the review principles of value-added agricultural business in the pilot zones. In the principles, the COA would take many factors into consideration, such as whether the products are mainly for export, whether it is involved in local contract farming, and whether local materials will be replaced due to the use of controlled materials. In short, for certain agricultural industry that could be impacted severely, the COA will not allow them to be stationed in the pilot zones. In addition, the COA will plan another budget to assist the collaboration between enterprises and local producers, such as by contract farming or establishing satellite farms. In this way, enterprises can have a stable source of raw materials while producers can have a stable income. It leads to a win-win situation for both farmers and manufacturers.

Regarding the doubt of value-added agriculture involved in Wildlife Conservation Act, the COA will listen to public opinions and consider amendment

As some conservation groups are concerned that Wildlife Conservation Act is not applicable to the pilot zones, the COA explicitly states that Article 47 of the Draft of Special Act for Economic Pilot Zones aims to enhance the international competitiveness of ornamental fish and periphery industries. It intends to simplify the procedure of importing ornamental aquatic animals and to relax application criteria and utility restrictions. This practice also wins positive response from representatives of the aquarium association, who attend public hearings and consider it beneficial for the overall development of ornamental fish industry. On the basis of the stance of wildlife conservation authority, the COA does not plan to apply relaxation of restrictions to other sectors except ornamental aquatic animals. In order for a clearer definition of who is eligible for relaxation in the pilot zones, however, the COA will receive different comments and jointly amend Article 47 with the National Development Council. In the article, “wildlife and their products” will be clearly revised into “ornamental aquatic animals.” This can achieve the goal of promoting the ornamental fish industry while taking into account the policy of conserving animals, maintaining biological diversities and keeping a natural ecological balance at the same time.

In the face of challenges by liberalization, give Taiwan’s agriculture a new opportunity

The COA stressed that Taiwan has been unable to remain outside the regional economic integration and internationalization trend. In the future, Taiwan’s agriculture will inevitably face many challenges due to liberalization. Therefore, the first stage of the value-added agriculture policy is targeted on some high value-added industries, such as ornamental fish and periphery sectors, animal vaccine, and agricultural, fishery and livestock processing. Liberalization measures are slightly tested inside the pilot zones. Firstly, foster potential agricultural enterprises to establish global operations. Through the operational model that agricultural enterprises add product value for export, direct impacts on domestic primary agricultural market by substantial foreign materials possibly entering the local market can be avoided. The COA will carefully evaluate, meticulously adjust relevant practices, and continuously fight for the most favorable conditions in agriculture among future bilateral or multilateral negotiations. On the one hand, it can win time for adjustment; on the other hand, it can gradually lead agriculture toward restructuring and upgrading. This will give Taiwan’s agriculture a new opportunity for further development of competitive products to compete with other countries' farm products.