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Achieving the Clustering Effect through Specialized Agricultural Zones


2015.12 (Issue No. 282)

I. Preface

  In 2007, the Council of Agriculture began to promote the Specialized Agricultural Enterprise Zones (AEZs) Project in order to lead Taiwan’s agriculture towards large scale and centralized management, so that resources might be concentrated and used by outstanding, safe production communities. In 2015 the COA took into consideration the integral benefit of agriculture administrative projects, and merged the existing practice of AEZs with production clusters to start promoting the Specialized Agricultural Zones Project according to overall farmland resource classification and the concept of market demands that lead to rational farmland usage. The project aims to overcome the unfavorable factors encountered by Taiwan’s small-scale agricultural economy regarding land use, agro-management, and production environment. The goal is to expand the agricultural clustering effect and stimulate better farmland sustainability.

II. The concept of Special Agricultural District

  The Specialized Agricultural Zones (SAZs) Project was conceived by combining existing farmland utilization practices such as the AEZs which advocates concentration of production area and environment-friendly farming, with production cluster’s multiple business entity and contract production / retailing practice carried out by the Agriculture and Food Agency (AFA). At the same time, select 7 SAZs by taking into consideration those excellent farmland areas established according to local government farmland resource classification outcome, and existing crop or production clusters as well as regenerated rural communities. In 2015, these 7 SAZs and their business entities received priority counseling in order to become models for the promotion of a new form of specialized district which integrates various resources such as AEZs, production clusters, and rural regeneration.

  Therefore, the principal idea behind SAZs is to encourage business entities in establishing agro-commercial cooperation with agro-businesses and market retailing channels, besides taking into consideration factors such as taking concentrated outstanding production areas of a certain scale as foundation, the integration of local entities (farmers, large tenants, young farmers, and production/retailing organizations) by local business entities (farmer’s associations and cooperatives), the promotion of the large scale and centralized development of SAZs’s core industries, the safety certification of agricultural products, and the fostering of contract farmers. The initiative is expected to achieve beneficial results for the effective production and sales of agro-products or raw materials. SAZs are to be established as rational agricultural enterprise zones for the proper formation of stable supply chains with excellent quality and quantity.

Concept chart of merging the existing practice of SAEDs with production clusters

III. Overview of the project’s demonstration practice

  In 2015, the COA assisted farmer groups in promoting centralized and optimized demo SAZs projects in Sanshing Township, Guanshi Township, Fushing Township, Singang Township, Shigang District, Yanchau District, and Hengchun Township among other locations. The total implementation area covers 705 hectares for the development of import substitute or local characteristic core crops such as organic rice, high grade fruits, Chinese mesona, and sesame among others. Crucial measures are as follow:

1. Expand the competitive industries’ clustering effect while taking into consideration farmland conservation: Designate clusters of special areas with explicit boundaries. Solve the managerial difficulties of sporadic and small farmlands through production and retailing conglomeration. Develop local competitive industries and make farmlands generate profit for farmers, who may uphold farmland resources autonomously in order to achieve sustainable agriculture.

2. Establish good environment for agricultural business in order to stabilize supply chain quality: Adopt environmentally friendly production management practice such as rationalized fertilization and joint pest prevention. Develop core industries and evaluate market demand to engage in contract production with SAZs farmers. Develop SAZs into safe agriculture production bases by encouraging agro-products to obtain safety certifications such as the organic certification and TAP.

3. Make good use of Farmland Bank’s centralized assistance to increase farmland usage rate: Provide counseling to farmer’s associations implementing the project to acquire fallow and abandoned farmland management rights by properly using Farmland Bank’s assistance. The aforementioned farmlands would then be developed by commercial departments of farmer’s association or transferred to professional farmers for cultivation so as to achieve centralized and efficient management of farmlands.

4. Enhance business entity’s managerial capability and promote added-value strategy for agriculture: Elevate business entity’s planning and management capability on industry value chains according to SAZs core industry’s characteristics and business mode. Create market segmentation and increase benefit for business entities’ commercial enterprises as well as profits for farmers by matchmaking cooperation between producers and retailers.

5. Agricultural resources are given to SAZs with priority in order to closely integrate people, land, water, and industry: Administrative resources from agriculture institutions are requested with priority according to each SAZs’s development goal and positioning. For instance, research and extension stations provide counseling on production technology as well as assistance with soil test and rationalized fertilization; integrate counseling resources from all farmers' associations to provide agricultural trainings for SAZs’s young generation farmers; after considering each SAZs’s characteristics, the Agriculture and Food Agency (AFA) would gather production cluster operations to provide priority counseling on production and marketing; work in conjunction with the Bureau of Animal and Plant Health Inspection and Quarantine (BAPHIQ) in the prevention of pests and implement joint pest prevention measures in SAZs; combine rural regeneration with cross-domain cooperation, the Water and Soil Conservation Bureau (WSCB) would provide SAZs with assistance on environment improvement and industry development.

SAD explanation chart

IV. Conclusion

  In order to meet the needs of both farmland resource maintenance and sustainable industry development, the COA devoted itself to promoting the development of the industry through SAZs. Over the years, the Council not only conceived the AEZs but also production clusters, Aquaculture Production Zones, etc. In 2015 it started promoting the Special Agriculture District Project whose locations were selected according to the results of overall farmland resource classification while integrating agricultural administrative projects such as centralized farmland utilization and production / retailing counseling. The COA further assisted farmers' associations and cooperatives to integrate various counseling resources according to market demand, such as raw material supply, processing, and marketing, while combining contract cultivation, purchasing, and agro-product R&D in order to promote added-value agriculture. This practice of building safe production bases through industry clustering effect is actively promoted by the COA nationwide. The ultimate goal is to achieve sustainable development for Taiwan’s agriculture, fishery, and livestock industries.

SAD counseling focus and task division