Ensuring the welfare of the rural population

Welfare benefits (pensions) for elderly farmers

　　To care for Taiwan’s aging farmers, in June of 1995 the government (acting on the basis of the Provisional Act Governing the Welfare Allowance for Elderly Farmers) initiated a “welfare allowance” (also called a “pension”) for elderly farmers. The amount of the allowance, originally NT$6,000 per month, was increased as of January 1 of 2012 to NT$7,000 per month. It is issued to all qualified farmers 65 years of age and over. In 2015 the COA dispensed NT$54.076 billion in welfare allowances to 670,900 persons.

Improved verification of qualifications for farmers’ health insurance

　　Farmers’ health insurance (FHI) was intended to be a form of social insurance specifically to protect the interests of persons actually working in the field of agriculture. It has proven to be necessary to clarify the qualifications for FHI in order to ensure that persons not intended to benefit from FHI do not exploit loopholes in the qualifications in order to join the FHI program. To this end, the COA has pro-actively guided farmers’ associations at the local level to review and confirm the qualifications of the insured and to keep data on the insured up to date.

　　Moreover, on September 15 of 2015 the COA announced an amended version of the “Regulations for Standards of Determinations and Examinations of Qualifications of Farmers Engaging in Agricultural Work and Applying to Join the Farmers’ Health Insurance Program.” We eliminated the provision requiring persons to have been involved in agricultural work for one year and have the same household registration as the land holder for at least one year, and we added a new provision under which farmers legally using the farmland of other persons can, with possession of relevant documentation, participate in FHI. These changes make the criteria for applicants to participate in FHI more reasonable.

Educational subsidies to farmers and fishermen with children in high school or college

　　In order to ensure that the children of disadvantaged farmers and fishermen do not, for economic reasons, miss out on the chance to get high-school and college educations in Taiwan, a program was launched in September of 2003 to provide financial support and scholarships for these farmers and fishermen. In 2015 a total of NT$1.094 billion in academic subsidies was paid out, helping 135,400 young people continue their education.

Disaster preparedness and natural-disaster relief subsidies

　　In order to reduce the impact of natural disasters on the rural population and economy, the COA, acting on the basis of forecasts from the Central Weather Bureau, issues press releases and puts real-time information on our website to inform the rural population about pre-event preparedness and post-event relief. We also train individuals in the skills necessary for assessing and reporting on local disaster conditions, and have purchased digital tools (such as digital cameras with GPS tracking) to make on-site investigations more efficient, allowing us to deliver assistance more quickly and effectively.

　　In 2015 there were a number of occasions when inclement weather resulted in losses to agriculture. These included: (a) destructive winds on January 12, (b) high temperatures in April, (c) frost damage in April, (d) weather fronts in March and April, (e) drought in February and March, (f) weather fronts in April (low temperatures), (g) the May 24 tornado, (h) torrential rains in May, (i) drought in June and July, (j) the July 20 tornado, (k) Typhoon Soudelor, and (l) Typhoon Dujuan. Acting on the basis of the “Regulations for Agricultural Natural Disasters Relief,” the COA arranged cash relief payments, special-case subsidies, and low-interest loans to affected farmers. Total relief allocations in 2015 were NT$3.559 billion, benefiting over 139,400 households, while 353 farm or fishing households were helped to get low-interest loans totaling NT$26 million. These practical measures substantively reduced the impact of weather events on the rural population.

Purchasing paddy for public reserves

　　Rice is the most important crop in Taiwan. To support incomes of rice growers and stabilize prices of this critical staple, since 1974 the government has been purchasing rice at guaranteed prices. Responding to changes in recent years in rural lifestyles and circumstances, since the second crop of 2011 the government has allowed farmers to sell fresh (wet) paddy to the government under this program. In 2015, fresh (wet) paddy constituted 78% of the paddy sold by farmers to the state, as compared to 59% in 2011.

Fuel subsidies for fishing boats

　　Subsidies for diesel fuel for fishing boats are calculated based on a 14% fluctuation in fuel prices as compared to prices on May 28 of 2008. In 2015, the COA provided subsidies totaling NT$1.222 billion for 628,700 cubic meters of diesel fuel for 7293 fishing vessels. Gasoline for fishing boats was brought within the subsidy program in 2009. In 2015, the COA provided gasoline subsidies totaling NT$110 million to 5995 boats.

Subsidizing price differentials for fertilizer

　　Most of the raw materials for fertilizers needed in Taiwan are imported and are thus subject to factors beyond the control of local farmers and manufacturers. Since May 30 of 2008 the COA has implemented a program to manage the price of fertilizer and stabilize fertilizer supply. The nominal domestic price of fertilizer follows changes in the prices of raw materials, but the government subsidizes the differential to reduce the burden on farmers. As of the end of 2015, the cumulative cost of the subsidy program was NT$24.5 billion. The subsidy program continues to apply to 10 major types of chemical fertilizers widely used by farmers.

　　In 2015 international prices for raw materials for fertilizers continued to show a downward trend, but still remained higher than the time period at which the base price of fertilizer in Taiwan was fixed. Taking into account the most effective use of overall resources, the government continued to absorb the differential, thereby keeping the purchase price stable for farmers. For all of 2015, the cumulative amount of subsidized fertilizer was 754,400 metric tons, with subsidies totaling NT$1.545 billion. After taking the subsidies into account, prices for fertilizer in Taiwan were lower than those in neighboring countries like Japan and Korea.

Subsidies for purchasing small farm machinery

　　To meet the changing needs of cultivators as agriculture has developed, the COA has encouraged mechanization of agricultural production in order to reduce the need for labor, raise productivity in farming communities, and reduce the burden on farmers. The COA therefore has been guiding farmers to purchase machinery needed for cultivation including hand cultivators (aka hand tractors or hand tillers), mini dump trucks (soil movers), motorized sprayers/sprinklers, grass cutters (lawn mowers), motorized fertilizer applicators, and chainsaws. In 2015, under the “Local Agricultural Machinery Program,” the COA guided or subsidized farmers in the purchase of 5975 machines.

　　In addition, the COA took the opportunity provided by the government’s consumer stimulus plan to institute a project to provide still more assistance to farmers in purchasing small farm machinery. Under this plan, in 2015 we subsidized the purchase of over 53,220 hand cultivators (aka hand tractors or hand tillers) of 14 different types. (Note that our focus is on small machinery because the average farm size in Taiwan is only just over one hectare.)

Fisheries insurance and maritime safety

● The Fisheries Agency of the COA, acting on the basis of the “Regulations Governing Incentives for Insurance for Owners of Motorized Fishing Vessels,” subsidizes owners of motorized vessels of less than 100 tons to sign up for insurance. In 2015 we provided subsidies of NT$51,219,493 to a total of 7026 fishing vessels. Of these, there were 6177 fishing vessels of less than 20 tons that signed up for insurance, or roughly 1.6 times as many as in 2013.

● To provide economic security for the families of fishermen killed or injured at sea, the COA, acting on the basis of regulations covering insurance for fishermen during at-sea operations, makes payments for individuals who are killed, missing, or disabled. In 2015 the COA approved payments for 43 individuals, totaling NT$41,916,666 million.

● In addition, based on regulations governing insurance for fishing vessels, in 2015 the COA paid out assistance of NT$1.215 million for 18 vessels.

● The COA may also approve “consolation payments” for individuals involved in maritime accidents; in 2014 payments of NT$2.76 million were paid out in cases involving 56 individuals.

● To help maximize the safety of our nation’s fishermen, the Fishery Radio Station of the Fisheries Agency of the COA provides 24-hour information on weather and sea conditions, as well as issues reports about incidents at sea involving fishing vessels. In 2014, communication was effected a total of 790,000 times, rescue operations were conducted on 560 occasions, and 2151 individuals were rescued. In addition, in 2013 the COA completed construction of a communications and consultation mechanism for emergencies for crew who are injured or become ill at sea. In 2015 the mechanism was activated on 28 occasions.

Livestock insurance

　　Based on the Agricultural Development Act and the “Livestock Insurance Regulations,” the government guides farmers’ associations at all levels in offering livestock insurance. Livestock insurance helps spread the risk of raising livestock, discourages illegal trade in carcasses, improves the image of the industry, and raises consumer confidence in domestic pork.

　　Policies are available to cover the death of dairy cows, the death of hogs, and the death of hogs in transport. In particular, insurance to cover the death of hogs is now available in very municipality, city, county, and offshore island in the country. In 2015 a total of 9.71 million head of livestock were insured, of which 10,430 were dairy cows and 9.7 million were hogs. The program has won strong support from farmers, and it has effectively prevented illegal sale of carcasses. In 2015 there was not a single case of illegal sale of a livestock carcass.

Anti-piracy measures for long-range fishing operations

　　In recent years, piracy has been a major problem in the waters around Somalia, threatening the safety of all ships and crews operating in those waters. On August 21 of 2013, the COA, responding to requests from the fishing industry, announced amendments to the Fisheries Act that permit fishing vessels to hire private armed security personnel, in order to protect crews and allow operations to continue unhindered.

　　On January 20 of 2014, the COA completed the legal framework for this policy by announcing relevant bylaws required by the amendments (including regulations governing methods for hiring private armed security personnel, as well as regulations defining high-risk areas for piracy or armed criminal activity). With this legal framework in place, fishing ships operating in high-risk areas are allowed to legally employ private armed security personnel for self-defense. In 2015, 168 fishing vessels hired a total of 370 armed private security personnel.

Strengthening rural organizations

Farmers' and fishermen's associations

　　As of January 1 of 2015, all farmers’ and fishermen’s associations (hereafter F/FAs) were brought within the scope of the Labor Standards Law (LSL). This was done to protect the rights and interests of F/FA employees and improve management-labor relations. We guided the National Farmers' Association to assist farmers’ associations at subsidiary levels to resolve arrangement of working hours so that the Ministry of Labor could announce on March 10 of 2015 that farmers’ associations would hereafter be considered a profession falling under the provisions of the LSL’s Article 30-1 (governing working hours in specified types of professions). Finally we re-examined the proper interpretation of the “Regulations Governing Personnel Management at Farmers’ Associations” and the “Regulations for Farmers’ Association Financial Management” in order to assist all interested parties to understand and apply these regulations correctly.

　　Numerous other organizational regulations governing F/FAs were also re-assessed. These re-assessments led to the following changes:

(1) On July 30 of 2015 the COA announced an amended version of the “Regulations Governing the Selection and Appointment of the General Managers of Farmers’ Associations.” The changes adjust the weightings of various types of academic or career credentials for candidates for general managers. The changes also bring the district Agricultural Research and Extension Station and superior (i.e. higher-level) farmers’ associations into the selection process.

(2) On October 29 of 2015 the COA announced an amended version of the “Regulations Governing Performance Evaluations of Farmers’ Associations.” This new version clearly stipulates the mechanism and process for re-evaluation and adjusts the standards for evaluations of special-case policy loans and credit services.

(3) On December 14 of 2015 the COA announced an amended version of the “Regulations for Qualifications for Engaging in Agriculture for Directors and Supervisors of Farmers' Associations.” There is now a new provision stating that when persons with eight years or more of seniority in agricultural extension services register as candidates for the board of directors or board of supervisors of a farmers’ association, they are exempt from the requirements of having their own agricultural land (facilities) and of having directly been doing agricultural work for over six months. Also, there is a new provision that members of the board of directors or board of supervisors of a farmers’ association must retain their qualifications throughout their terms of office This provision clearly stipulates that those who lose their qualified status shall be removed from office (without, however, affecting the validity of any actions taken while in office).

(4) On March 27 of 2015 the COA amended the “Directions for Local Fishermen’s Association Charters,” and used the new version to guide various regional fishermen’s associations to improve their organization in order to raise their competitiveness.

　　We also continued to assist F/FAs to promote modern farming and marketing techniques. For one thing we provided subsides to F/FAs to upgrade their educational and agricultural extension facilities and equipment. Secondly, in order to assist F/FAs to develop profitable enterprises, the COA once again selected the “Top 100 Products of Farmers’ and Fishermen’s Associations,” for which we printed high-quality catalogues, and sent these catalogues to large corporations as reference in large-scale purchases of holiday gifts. We also held a major exhibition of these “Top 100 Products” from December 24 to 27 of 2014. Thirdly, we expanded this exhibition to include premium products from young farmers, rural tourism products, premium fisheries products, premium export agro-products, and outstanding livestock products. By bringing all these together in one place we raised the overall image of Taiwan’s F/FAs and farm and fisheries industries.

Irrigation associations

　　Acting under The Act of Irrigation Association Organization, the COA guides local irrigation associations (IAs) in providing irrigation and drainage services for farmland. To ensure that IAs do not become a financial burden on farmers, IAs have halted the collection of contributions from local association members. In 2015 the government allocated NT$2.23 billion to subsidize the operations of IAs.

Ensuring sound operations at rural financial institutions

Diversifying financial services at farmers' and fishermen's associations

● To enhance the quality and competitiveness of services provided by the credit departments of farmers’ and fishermen’s associations (F/FAs), the COA assigned the Agriculture Bank of Taiwan (ABT) to reorganize the services of F/FA credit departments. In June of 2010, F/FAs signed comprehensive contracts to construct a complete integrated vertical system for payment services, allowing F/FAs to accept and process different types of payments. F/FAs can currently accept payment for 334 items including insurance premiums for national pensions; payment of water, electricity, natural gas, cable TV, and telecommunications bills; payment of the fuel-usage fees for motor vehicles; and credit card payments. By the end of 2015, 1175 service centers at 309 F/FAs had processed a total of 62.59 million such transactions, totaling nearly NT$249.9 billion.

● On December 29 of 2015, the ABT opened a new department for international services. This unit will cooperate with F/FA credit departments to provide export financing services. Also, through foreign exchange and international payment services this unit will assist producers to expand into overseas markets, thereby providing farmers and fishermen with even more comprehensive financial services.

Improving management of F/FA credit departments

● The COA has for many years been working to steadily improve operations at F/FA credit departments. In 2015 total deposits at these credit departments reached NT$1.80 trillion, while outstanding loans were NT$1 trillion. Before-tax net profit was NT$5.8 billion. The non-performing loan ratio was 0.51%, the lowest figure over the last three decades. The non-performing loan rate was less than 1% at 252 of the 309 credit departments at F/FAs, while 74 of them boasted a rate of 0%, showing that loan quality, already at a high level before 2015, continued to improve.

● All in all, there has been a marked improvement in the operations at F/FA credit departments. The COA will persist in keeping close track of operational conditions at all such institutions, help out when problems are discovered, and strengthen oversight. We will use monitoring and guidance to continue to advise credit departments on how to improve operations, and thereby ensure continued stable development of agricultural finance.

Policy-oriented special agricultural loans

　　In order to promote the development of the rural economy and upgrade the well-being of farmers and fishermen, the COA has long had a policy of processing loans that are designed to promote specific policies (as opposed to loans made on purely financial grounds). In 2015 we provided NT$20.98 billion in these “policy loans” to 41,689 farmers and fishermen to help them meet their needs for operating capital. In particular, in coordination with such policies as recruiting and training young farming manpower and development of new value chains, we strengthened promotion of: (a) start-up loans for young farmers; and (b) loans for rural organizations and agro-businesses to engage in (i) improved production and marketing operations and (ii) innovation and R&D. Such loans provided, respectively, NT$360 million to 224 young farmers and capital of NT$490 million to 62 agro-businesses. In 2015 we also assisted about 29,000 farmers and fishermen to use the agricultural credit guarantee mechanism so that they could more readily acquire NT$17 billion in agricultural finance.