Expanding economies of scale for specific industries

Promoting Value-Added Agriculture

　　In response to trends toward trade liberalization and regional economic integration, the COA is promoting the concept of “Value-Added Agriculture” (VAA). We are currently giving priority in this strategy to the Pingtung Agricultural Biotechnology Park (PABP). We are now focusing on a few key value-added industries especially with strong potential, including: (i) ornamental fish, aquatic pets, and aquarium peripheral products; and (ii) agricultural biotechnology (such as animal vaccines). Through value-added innovation, Taiwan can expand upon its comparative advantage in agro-technology, promote the development of agro-industries, and upgrade international competitiveness.

　　The VAA policy was formally launched on August 16 of 2013. Through 2015, 40 enterprises had received approval to invest in the PABP, with total investment of NT$3.875 billion. The major areas of investment thus far have been: biotechnology (including vaccines), functional foods, bio-pesticides and bio-fertilizers, science-based Chinese herbal medicine, and ornamental fish and related aquatic-pet products.

The Pingtung Agricultural Biotechnology Park

　　Since opening on December 21 of 2006, the PABP has completed considerable amounts of infrastructure (such as pipes, lines, roads, drainage, water supply) as well as operational facilities like the Yai-Tai Aquaculture Center, the import-and-export warehouse zone, and the warehouse and logistics zone. In addition, service providers—including the Customs Bureau, the COA’s Bureau of Animal and Plant Health Inspection and Quarantine, the COA’s National Institute for Animal Health Research, and various logistics firms—have moved into the PABP and are providing fast and efficient customs, inspection and quarantine, and other critical services. As of this writing 102 firms have invested and moved into the PABP (including Japan’s Kitoku-Shinryo Group, meat products producer T Ham Company Ltd, and the sauce manufacturer Wan Ja Shan Company), with total investment of NT$9.4 billion.

　　In response to the need for more land for PABP investors to build factories and also to attract even more high-value, high-innovation companies with potential for global competitiveness (both domestic and foreign companies), the PABP has received approval from the Executive Yuan to expand its operating area by 165.41 hectares. Work has already begun on the development plan and the environmental impact assessment. Development is expected to be completed in 2019, allowing further increase in the scale of agricultural-value-chain industrial clusters, and increasing investment and job opportunities in Taiwan.

The Taiwan Orchid Plantation

　　The land area of the Taiwan Orchid Plantation (TOP) is 175 hectares, including 95 hectares of space for construction of greenhouses. Basic infrastructure, which was completed at the end of 2012, includes an operations services center, a waste-water treatment plant, an orchid park, a flower exhibition hall, three exhibition greenhouses, three small research greenhouses, and seven pre-fabricated greenhouses that can be rented by agro-businesses. As of the end of 2015, 80 agro-businesses had signed contracts to invest in the TOP, of which 75 had moved in and constructed greenhouses, and 68 had begun operations and production. Cumulative investment as of the end of 2015 was NT$10.885 billion, with operating revenues of NT$10.536 billion.

Promoting collective production zones

　　As of this writing there are 23 agricultural enterprise zones (AEZs), covering 4510 hectares. These zones include 150 young farmers receiving special training, and 564 hectares of the land in these zones has received safety certification. To take two examples of AEZs, the COA has: (a) created an industrial value chain for mushrooms, and (b) has promoted contract-cultivation for production of red beans (adzuki). Goals for the AEZs include more mechanized production, universal use of traceability certification, improved sales channels, and increased incomes for farmers.

　　The COA has established 38 collective production zones for paddy rice covering 16,500 hectares (two growing seasons). The operating authority of the zones purchases the entire harvest at premium prices (the actual price varies depending on the grading of the variety of rice) and then promotes branded marketing. On average, the contract purchase price is higher than the market price, increasing income for farmers by about NT$19,000 per hectare per growing season.

　　The COA has also established 11 collective production zones for vegetables (8300 hectares); 16 for flowers (246 hectares); 35 for fruit (1520 hectares); and 30 for tea (498 hectares). We have also guided production on more than 3000 hectares of secondary staple crops, including soybeans, linseed, and sweet potatoes. These measures bring the advantages of economies of scale into play.

The aquatic pet and ornamental fish industry

　　Another way in which the COA is aiming to diversify the rural economy is through development of companies producing ornamental fish, aquatic pets, and peripheral aquarium products. The 2015 Taiwan Aquarium Expo, held at the Kaohsiung Exhibition Center on October 16-19, drew more than 140,000 visitors and had retail sales of NT$43.06 million.

　　The COA has also formed a consulting and assistance team for breeding and raising aquatic pets. In 2015 we organized 33 consulting visits to companies and 63 visits to aqua-farms to provide technical services.

　　In addition, the COA has opened the Yai-Tai Aquaculture Center at the Pingtung Agricultural Biotechnology Park. This facility concentrates R&D, breeding, inspection-and-quarantine, packaging, logistics, and customs reporting for imports or exports, all under one roof, which facilitates the procedures for imports or exports. In the future, utilizing the PABP’s special privileges as a “bonded park” and the business model of “shop onsite, factory offsite,” businesses in the PABP will drive the growth of neighboring satellite farms for raising aquatic pets and grow into an export-oriented special industrial zone.

　　In 2015 the live ornamental fish and aquatic pet industry produced NT$1 billion in value. When peripheral industries such as feed, aquarium life-support systems, lighting, and so on are considered, the total value of production was NT$3.75 billion. Exports of live ornamental fish totaled US$4.66 million in value.

Reorganizing the poultry and livestock industries using a more corporate business model

　　The COA is doing many things to help the livestock and poultry industries become run in a more corporate fashion, including: (1) We are helping farmers to adopt new automated production systems that are more efficient and more productive. (2) We are constructing precision management models for breeding and raising of livestock and poultry (while always taking into account local conditions). (3) We are promoting more widespread application by these industries of new technologies and techniques. (4) We are guiding the creation of a more specialized division of labor, especially through enlarging the percentage of production done on a contract basis and expanding the scale of contract-raising of livestock and poultry. (5) We are introducing more vertical integration and more corporate-type systems in the industry. (6) We are raising efficiency of production, processing, transport, and marketing to effectively broaden and extend the industrial value chain. (7) We are, depending upon changes in the social environment, continually re-assessing relevant laws, regulations, and systems.

　　In addition, the COA is implementing a plan to create an export supply chain for livestock and poultry under the framework of the Free Economic Pilot Zone (FEPZ) program. Currently we are encouraging poultry firms to either set up brick-and-mortar operations in FEPZs or to operate through the FEPZs using the “shop onsite, factory offsite” model. We are encouraging businesses to: (a) create models for value-added processing and export from the FEPZs of materials that have been imported into the FEPZs; (b) organize linkages to create value chains for poultry products; and (c) construct a comprehensive system for contract production and marketing, including imports and exports.

Promoting forestry cooperatives

　　In order to enhance value chains in the forestry industry, the COA aims to help tree farmers and forestry-product processors to cooperate. We have been working to create a linear forestry-industry value chain that links production, processing, and sales. In 2015 we led the way in forming forestry production cooperatives in four locations. Under the precondition of ensuring that operations remain sustainable, forestry businesses can unite in each locality, and if they can produce concrete and feasible plans for product development, financing, and marketing, the government will play a mediating and coordinating role. We want to transform the forestry industry away from its traditional labor-intensive axis in the direction of diversified, high-quality, sophisticated, and technology-intensive innovative development.

Promoting value-added through unique or niche industries

Tea industry value chain

　　In order to upgrade and extend the tea industry value chain, through 2015 the COA guided 81 tea manufacturers (producers and processors), tea businesses, and farmers’ associations to invest in operating teashops or teahouses, or to invest in the tea services industry. We intend to extend the first level of tea production and the second level of tea-product manufacturing industries into the third level of tea-related consumer services. For example, we have selected five teashops or teahouses with uniquely attractive features to promote as models for introducing premium teas and tea culture to consumers.

The rural wine and liquor industry

　　In 2015 the COA guided 20 rural wineries to create products flavored with ingredients unique to local agriculture in their respective areas. Total production volume was 190,000 liters, with production value of NT$178 million. We also integrated visits to local wineries with tourist visits to local scenic spots, industries, and cultural sites, with a total of 1.2 million visits to wineries. Also, we held competitions to evaluate rural wineries and their products, and 12 wineries were evaluated as “outstanding” or “premium quality.” In addition, the COA has selected the most outstanding wines or liqueurs to participate in international competitions, and in 2015 products from Taiwan brought back six gold medals and five silver medals, helping to introduce Taiwan wines and liqueurs to the international market.

Premium seafood products

　　The Fisheries Agency (FA) of the COA holds annual competitions for high quality grouper, Taiwan tilapia, “Haiyan” premium seafood, the Top 10 Taiwan mullet roe, etc. Through these competitions and building of brand-marketing, the FA is helping the fisheries industries of Taiwan to establish a solid reputation for premium seafood, thus upgrading the entire fisheries industry value chain.

Boutique forestry products

　　In 2015 the COA developed four innovative techniques for processing bamboo, and transferred technology in one case. We also guided 47 firms from the forestry industry to participate in four domestic and international trade fairs, and held five activities to publicize innovative technologies (techniques) for forestry products and to do business matchmaking. We have also constructed an inter-disciplinary Internet platform for technical inquiries related to the bamboo industry, and organized a database and electronic map covering the entire country with the locations of 379 firms in the bamboo industry. We estimate that bamboo manufactured goods accounted for NT$3 billion in value in 2015.

Niche agricultural products

　　One focus of the COA’s efforts to promote agricultural niche products has been the selection of the “Top 100 Products of Farmers and Fishermen’s Associations,” an event that has been ongoing for several years. There is now a high level of brand value and word-of-mouth reputation for these Top 100 Products among consumers. To qualify, products must be manufactured at the highest standards, be locally produced, and be able to maintain consumer trust and confidence. This is the highest honor that can be bestowed on any farmers’ or fishermen’s association.

　　On December 24-27 of 2015, the COA organized an exhibition, held at the sports center of National Taiwan University in Taipei, of premium quality agricultural products from all over Taiwan. This event demonstrated the vitality, high degree of competitiveness, and stable incomes that characterize contemporary agriculture and fisheries industries in Taiwan. In addition to displaying and selling the 2016 Top 100 Products of Farmers’ and Fishermen’s Associations, this event also exhibited: (a) premium seafood products guided by the Fisheries Agency of the COA; (b) premium export products guided by the Department of International Affairs; (c) outstanding meat products guided by the Department of Animal Industry; (d) outstanding products produced by communities through their rural regeneration programs as guided by the Soil and Water Conservation Bureau; and (e) outstanding products produced by members of the first and second classes of the “Top 100 Young Farmers.” This was a major opportunity for consumers to find Taiwan’s finest rural products all in one place.

Rural regeneration, local industries, and greater development through synergy

Upgrading the quality of life in rural communities

　　To invigorate and diversify the rural economy, it is essential that the rural living environment be of the highest possible quality in order to attract more young people to settle and take up occupations in rural areas, make rural areas more attractive to investors, and draw visitors to rural leisure and recreation. We do this largely through “Rural Regeneration” (RR) projects. The COA starts by evaluating the unique appearance and setting of each rural community and weighing its needs in terms of living environment, economic production, and natural environment. We then incorporate unique local elements and materials to ensure that the hardware and software aspects of RR projects evoke the specific local rural aesthetic and highlight the character of the locality in question, and that RR projects result in the construction of a living space that is comfortable and welcoming. In 2015 the COA assisted 1836 rural communities improve basic conditions, upgrade the convenience of life, and clean up decrepit or unsightly spaces.

Promoting vitality in rural community industries

　　Starting from the foundation of the local industries that already exist in each rural community, the COA commissions and subsidizes inventories and analyses of local-industry resources. Our goals are: (a) to assist rural communities to build on these foundations through diversification and pro-active promotion and development, and (b) to assist in the marketing of rural community industries to the general public. We have undertaken a total of 954 cases thus far.

　　The COA also aims to create synergy between RR projects and development of local industries. Through evaluation of each local industrial value chain, we try to integrate the strategies adopted for promotion of rural community industries. We do in-depth exploration of the problems faced in development of community industries, and strive to coordinate the work being done by (i) agencies and institutes of the COA, (ii) community organizations, (iii) private enterprises, (iv) not-for-profit enterprises and non-governmental organizations, and (v) other government ministries and agencies. We have created one “all-purpose cross-institutional cooperative platform” as well as six regional platforms for discourse and information exchange. In 2015 the COA approved 22 community demonstration projects to create “local-industry points of light.”

Guiding the development of corporate-style management of rural communities

　　Acting on the basis of the Rural Regeneration Act, the COA has adopted a very pro-active approach to development of local industries. One important measure taken in 2015 was to complete a new set of regulations governing guidance for operations at rural community enterprises. These regulations empower the COA to: (a) guide and encourage rural community industries to move toward more business-style or corporate-style management; (b) nurture and support rural community businesses; (c) upgrade the competitiveness of rural community industries; and (d) promote innovation and greater value-added in these industries. The COA has provided subsidies to, and entered “partnership guidance” relationships with, companies, cooperatives, independent investors, or partner enterprises that meet the following criteria: (1) They are based on the lifestyle, products, environment, ecology, or culture of the rural community in which they exist. (2) They have adequate resources to be connected or tied into the industrial value chain.

Cultivating manpower for the rural economy

Guidance specifically tailored for young farmers

● The COA has constructed a partnership and resources-aggregation guidance platform to help young farmers operate their farms in a stable and sound way, and to advance toward larger scale farming operations and innovative development, thereby speeding up the nurturing of “benchmark young farmers.” For the first class of the “Top 100 Young Farmers,” the COA has provided the following assistance: (1) 5668 consultations with experts; (2) four “benchmark learning events” in Taiwan and abroad; (3) subsidies of NT$28.14 million for facilities and equipment; (4) assistance in applying for special-case agricultural loans totaling NT$139.27 million; (5) introduction of new varieties or technologies in 189 cases; (6) 269 cases of assistance with design of products or of “background stories” for marketing purposes; (7) over 36 cases of introduction of ICT (information and communications technology) or automated systems; (8) subsidies of NT$4.09 million for innovative value-added business plans; (9) expansion of the scale of operation of young farmers to a total of 510 hectares; (10) 243 cases of helping products pass inspection and testing; (11) 102 cases of processing R&D; and (12) 353 cases of expansion of sales or distribution channels. Overall production value has been raised by an average of 61%. For the second class of the “Top 100 Young Farmers,” there are 82 persons in the individual guidance category and six teams in the team guidance category, with a total of 106 young farmers. Their two-year guidance program was launched in January of 2015.

● The COA provides guidance to the farmers' associations at the level of local governments (municipalities, cities, and counties) to create local platforms to assist farmers in holding short-term observational learning visits, study sessions, lectures, consultations with veteran farmers, and information services. Ideally these activities will create an environment of exchanges between farmers, of mutual assistance, and of the inter-generational passing along of knowledge, which will result in better organization and allocation of resources. As of 2015, 16 platforms were up and running, with participation by 1850 local young farmers, and there had been: (i) 209 learning events, (ii) 1376 participants in events held to display and sell agro-products, and (iii) 115 networking events of all types. In addition there were two events under the rubric “national young farmers party and sales event” and “consensus-building workshop for core young farmers,” as well as five domestic “benchmark learning” events. The COA also contracted experts to assist in inventories and assessments of current conditions, producing 15 reports on “main points for future guidance.”

General training and education for farmers

● In 2014 the COA “Farmers Academy” held a total of 171 agricultural training courses, with 4964 attendees, at four levels: introductory (51 courses/1568 attendees), basic (17/524), intermediate (98/2725), and advanced (3/85). There was also one professional recruitment course for the orchid industry, attended by 33 persons, as well as a professional recruitment course for the mushroom industry, attended by 29 persons.

● The COA Internet information-and-services platform provides: (i) announcements of training courses, (ii) online enrollment, (iii) arranging of agricultural internships and onsite short-term observational learning visits, (iv) management of fee payments, (v) surveys and analysis of the results of training, and (vi) digital curriculum. We have assisted 12,239 people to complete enrollment. We have also completed digitization of video for 20 online courses; added new digital instructional videos for the mushroom industry; and in total we now offer 66 digitized instructional videos. A total of 4415 people have watched these videos online. We have also created a platform to arrange internships or onsite short-term observational learning visits, providing text and graphics on the farms that offer such internships/visits and their enrollment quotas, and we also provide online “letter of recommendation” services to assist qualified Farmers Academy students to apply for internships/visits.

● In an effort to increase the pace of training of the new generation of farmers, in 2015 the farm management program of the Department of Horticultural Science at National Chiayi University admitted 30 government-funded students for advanced study. The COA provides these students with subsidies, and if they pass their exams the university awards them with a certificate of completion of the course. In return, the students are contractually obligated to operate farms for four years, during which the government continues to pro-actively provide guidance and advice in operating their farms. They also receive priority for government-managed land purchases and business start-up loans.

● The COA has constructed a website for business start-ups by young farmers (http://ifarmer.coa.gov.tw). It provides one-stop consulting services and is a concrete manifestation of the government’s policy of “merging the Internet with actually practice.” Its contents include the experiences of successful young farmers, specific feature of various industries, consulting services, technical assistance, search functions for land and capital, trade/market information, and sales channels. The website is systematically and comprehensively organized so that users can move easily through it. The site has already gotten over 600,000 hits and, through the “consulting services” function, has provided concrete answers to questions asked by young farmers.

The “Small Landlords, Big Tenants” program

　　In addition to training, young farmers need land. Since May of 2009, the COA has been promoting a policy known as “Small Landlords, Big Tenants.” This encourages (a) farmers who are too elderly to work, or (b) farmers who would otherwise leave their land fallow, to rent their land on a long-term basis to young farmers or farmers’ groups willing to operate large-scale agriculture by combining pieces of rented land into larger farms. (The program also includes incentives for renters to cultivate import-substitution crops or crops with export potential.)

　　We also offer incentives to still-working elderly farmers who wish to retire so that they can do so worry-free, making their land available for recruitment of younger farmers and expanded scale of operations. This will create job opportunities for younger people while also increasing economies of scale, raising overall competitiveness, and creating additional production value. As of the end of 2015, the Small Landlords, Big Tenants program covered 16,041 hectares of land, with 33,880 landlords and 1782 tenants. Importantly, the average age of the tenants is only 45, far lower than the figure of 62 for all farmers nationwide, showing that the policy is helping rejuvenate the farm labor structure. Also, tenants manage on average 9 hectares of land (counting both their own and rented land), 8.2 times the area of the average farm nationwide (1.1 hectares).

Manpower training to develop rural community leaders

　　The COA undertakes manpower training at the community level to develop leaders who can create plans to better integrate and utilize community assets. So far we have offered training in a total of 2260 communities, with 148,188 attendees, and 622 of these communities have drafted their own Rural Regeneration (RR) plans. In addition, under the “Community Activism and Partnership” mechanism (available to localities whose RR plans have already been approved), the COA helps residents transform the unique features of their rural communities into economic assets and centerpieces of community vitality. We have already assisted 551 rural communities in implementing their RR projects.