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Promoting "Free Economic Pilot Zones": The "Agricultural Value-Added" Policy

  The first phase of the Free Economic Pilot Zone (FEPZ) program was formally launched on August 16, 2013, and the COA selected the Pingtung Agricultural Biotechnology Park (PABP) as the priority location for promotion of the "agricultural value-added" policy. In order to focus our efforts, we opted to give the highest priority to industries with potential to be competitive in the global market; these include ornamental fish and related peripheral industries, and agricultural biotechnology (like animal vaccines).

Policy goals

  The world is currently witnessing trends toward global trade liberalization and regional economic integration. Agriculture in Taiwan must transform the impact of these trends into opportunities for development. We must expand the use of outstanding agro-technology and techniques as the foundation, transform the results of R&D into commercially viable products, and then industrialize these products, so that there is a high degree of value-added in the agricultural sector. The COA, in coordination with the FEPZ program, is promoting the policy of agricultural value-added. We aim to build on Taiwan's competitive advantage in key agricultural technologies, and, by continuing to innovate and add value, we will promote comprehensive development of value-added agricultural industries, and expand the boundaries for marketing of our agro-products.

Policy measures

● Construct contract relationships linking the FEPZs to economic activity outside the FEPZs, increase farmers' incomes: The COA will guide businesses that set up in FEPZs to sign contracts with domestic producers, farmers' associations, and cooperatives to create a high-efficient supply system.

● Attract corporate investment, create a multi-win situation: This involves two aspects. (i) The COA will construct an operating model for commercialization of agricultural value-added products. (ii) We will also expand the value-adding capability of the PABP, expand the area of the PABP, relax restrictions on the types of enterprises that can set up in the PABP, and take advantage of the hardware and software conditions in the PABP to attract investment from both domestic and foreign companies.

● Diversify financing: Use policy tools that are complementary to the FEPZ policy (such as the National Development Fund, Executive Yuan) to provide special-case financing, and to attract large domestic corporations and foreign investors to enter the PABP or participate in investment projects; guide outstanding agricultural businesses to list on the stock exchange and increase willingness to invest from venture capital sources and cross-sectorial sources.

Anticipated effects

● Expanding the size of the agricultural sector: Through the development of agricultural value-added, the agro-industry value chain will be extended.

● Creating jobs: As we attract domestic and foreign investors into the PABP, this will encourage large-scale production and the industrialization of technology, thereby increasing incentives for young people to enter or remain in agriculture and increasing employment opportunities.

● Increasing revenues for farmers: The COA expects to guide investors in the PABP to establish contractual relationships with domestic farmers, which should increase sales of domestic agricultural products and raise the income of farmers.

● Getting on track with the global market: The experimental liberalized market and regulatory adjustments in the FEPZs should help local agro-industry raise technology and standards to levels required to be competitive in the global market.

Results to date

  Between August of 2013 and the end of December of 2014, a total of 31 companies received approval to invest in the PABP, with total investment of NT$3.32 billion. Major investment items include: biotechnology (including animal vaccines), functional food products, biological pesticides and fertilizers, scientifically-produced Chinese herbal medicines, and ornamental aquatic pets and related products. On November 1, 2014, the PABP opened two sub-units: the Asia-Pacific Operational Center for Aquaculture and the Agricultural Value-Added Cloud Platform.

  To cope with the enthusiasm among agricultural value-added companies to invest in the PABP, the Park has been moving quickly to prepare for expansion. In 2014 work was done on layout, planning, and environmental impact assessments, and the complete project has been incorporated into medium- and long-term infrastructure. It is estimated that the expansion—which will enlarge the PABP by 167 hectares from its current 233 hectares to 400 hectares—will be completed over five years (2015-2019).