In recent years Taiwan's agricultural sector has faced a number of challenges both internal and external, including intensifying climate change, depletion of natural resources, fragmenting of arable land, extreme competition from highly liberalized international trade, severe price fluctuations, a shortage of agricultural labor, and an aging farming population. These problems make it urgent to undertake agricultural transformation and industrial upgrading. Raising farmers' incomes and ensuring that consumers can buy safe agricultural products are major policy goals of the Council of Agriculture (COA). Starting with the objectives of ensuring the wellbeing of farmers, industrial guidance, and improving infrastructure, the COA actively resolves farmers' problems, adjusts the industrial structure, and makes it possible for policy to be promoted in a pragmatic manner and in step with the times, thereby advancing agricultural modernization and innovation.

In 2018 Taiwan enjoyed good weather, making it a bumper harvest year for agriculture. Taiwan exported US$5.47 billion worth of agriproducts, which was a new high over the last 20 years. Although there was a very serious epidemic of African swine fever in mainland China in 2018, the COA immediately initiated a variety of disease prevention measures, keeping the disease outside our borders. Agricultural policy implementation also continued to move forward: We have already completed the foundational work, seen many historic changes, and achieved a number of successes. Of these, several of the most important are as follows.

Promoting direct payments on farmland and organic and eco-friendly cultivation

To adjust the rice industry and encourage farmers to produce high - quality rice, in 2018 the COA implemented the “direct payments on farmland” policy nationwide. For the whole year, farmers applied to collect direct payments covering an area of 53,000 hectares, accounting

for 31% of the 172,000 hectares of the approved rice-growing area, while there were 137,000 hectares producing under contract. These numbers show a preliminary reduction in the dependence of rice farmers on the “guaranteed prices purchasing” policy, as well as an increased supply of grain crops other than rice.

In order to promote an increase in organic farming, the government, taking into account the current situation in domestic organic agriculture, future development needs, and the opinions of all stakeholders in society, promulgated the “Organic Agriculture Promotion Act.” The COA provided subsidies for organic and eco - friendly cultivation, for organic certification fees, for eco-friendly fertilizer materials, and for farm machinery and facilities. As of the end of 2018, there were 11,569 hectares of land under organic or eco - friendly cultivation, an increase of 42.9% as compared to 2017. Also, in order to expand marketing channels, the COA guided sales outlets to set up special counters devoted to organic products, organized organic farmers' markets, and set up electronic emporiums while guiding organic farmers to establish online direct-sales stores.

Constructing four major farmers' welfare systems to ensure the well-being of farmers

In order to (i) ensure that farmers' livelihoods are not endangered by weather events, (ii) reduce the operational risks of farming, and (iii) ensure farmers' incomes, the COA has been promoting an agricultural insurance system on a trial basis. As of the end of 2018, there was already trial insurance for 11 items, including pears, mangoes, sugar apples, paddy rice, aquacultural seafood, grouper, poultry (for avian influenza), agricultural facilities, papayas, wax apples, and milkfish. The total insured amount was NT$3.38 billion. In the future we will expand the coverage of agricultural insurance, increase the number of insurable items, and promote the passage of a law governing agricultural insurance, to protect the incomes of farmers.

The COA also refined farmers' health insurance. With respect to actual cultivators of the land who use the farmland of others but only have an oral agreement to do so rather than a written contract, we discussed relevant mechanisms and adopted “decoupling of people and land,” and we guided actual cultivators to apply to participate in farmers' health insurance. In addition, the COA expanded the occupational safety net for farmers and made the farmers' social insurance system more complete. Beginning November 1, 2018, we offered occupational injury insurance for farmers, and as of the end of December already 90,407 farmers had taken out policies. Moreover, in order to upgrade the quality of life of retired farmers, the COA is currently planning to integrate (i) farmers' health insurance, (ii) the welfare allowance for elderly farmers, and (iii) other forms of social insurance, and, using the welfare allowance for elderly farmers as the foundation, is evaluating the construction of a farmers' pension system, in order to create a comprehensive farmers' welfare system.

Promoting the use of domestically produced traceable foods in school lunches and traceable non-staple foods in the military

In order to implement the “Five Links of Food Safety” and ensure that students have safe food to eat while putting parents' minds at ease, in 2018 the COA began nationwide promotion of the use of local agriproducts that meet the requirement of the “Four Labels and One QR Code” in school lunches. The coverage rate in 2018 reached 55.3%, benefitting approximately 3,506 schools and 1.86 million students

in 22 municipalities, counties, and cities. This shows that the policy of promoting the use of food from traceable sources in school lunches has been quite effective. In addition, the COA also encouraged farmers' associations to provide traceable vegetables that have Traceable Agricultural Product (TAP) certification, Gi-Am-Pu certification, and/or organic certification to the military. About 40% of the vegetables provided to the military carried one or more of these certifications. Increased consumption of such vegetables will drive production of safer agriproducts, and promote acceptance and support of domestic agriproducts.

Upgrading the competitiveness of livestock, strengthening the effectiveness of animal and plant health inspection and quarantine

In order to differentiate domestically produced meat from imported frozen meat products, the COA continued to promote a traceability system for domestic fresh pork and to sell temperature-controlled fresh pork, and guided the improvement of equipment at meat transport and sales locations. In addition, we promoted the reuse of livestock waste and expanded biogas power generation; in 2018 there was reuse of the biogas produced by the feces and urine of 1.453 million head of hogs. To eradicate foot-and-mouth disease (FMD), the COA continued to advance toward its goal of having Taiwan declared an “FMDfree country where vaccination is not practiced.” On July 1, 2018, vaccinations for FMD were completely halted on clovenhoofed animals on Taiwan proper and in the Penghu and Matsu areas, and we entered the disease-monitoring stage.

The COA also actively worked to prevent the cross-border transmission of African swine fever. In August of 2018, the COA created an “African Swine Fever Central Emergency Response Center.” We implemented a variety of disease-prevention measures, including strengthening of border controls, disseminating diseaseprevention information to the general public, and strengthening domestic disease disaster preparedness. We also held a national inspection and quarantine exercise for African swine fever. The aim of these measures was to make the long-term battle against African swine fever more systematic and to reduce the impact on the hog industry.

Promoting adjustment measures for the production and sale of agriproducts, developing “pro-active” agriculture

In 2018 there was abundant production of fruits and vegetables. In order to reduce the frequency of imbalances between production and sales, with respect to important fruits and vegetables we set targets of exporting 10%, processing 10%, and direct sales of 10% of the total production volume of each type. We also devised relevant concrete strategies, including: (i) completion of an integrated search platform for information related to production and sales of fruits and vegetables, (ii) development and use of more kinds of processing, (iii) building of flagship logistics centers and regional cold chain systems, (iv) construction of a stabilization mechanism for production and sales of agriculture and food products, (v) increasing exports, and (vi) adjustment of the market structure and sales channels. These measures should help maintain stability in the price and volume of production and sales of agriproducts and ensure the incomes of farmers.

In 2018 Taiwan exported a total of US$5.47 billion worth of agriproducts, an increase of US$490 million (9.8%) over 2017. Of this, exports of fresh fruit rose by 29.5% compared to 2017. In the future the COA will use the “Team Taiwan” concept and has chosen 23 types of farm products (including mangoes, edamame, and rice) as well as six types of aquatic products (including Taiwan tilapia and grouper) as “main point” products for export. We will (i) set up individual export platforms for each product as well as special teams responsible for promoting their export; (ii) provide comprehensive information on production and marketing of agriproducts; (iii) assist in resolving problems in any link in the export supply chain; and (iv) use comprehensive integrated marketing to explore new markets in places like New Southbound Policy partner countries, the Middle East, and Russia. This is what the COA means by developing “pro-active” agriculture.

Alleviating the labor shortage and guiding new farmers, increasing value added

In order to alleviate the shortage of agricultural labor, the COA has promoted a number of measures including increasing the manpower supply, reducing demand for human labor, and constructing manpower dispatching and commissioned farming systems, in order to encourage efficient use of rural manpower. In 2018 the COA formed a total of 91 teams (including agricultural technical teams, cultivation teams, specialized industry teams, mechanized cultivation teams, and short term labor teams), for which we recruited 1,935 people. Altogether these provided a total of 270,000 man-days of labor, helping out more than 4,000 farms, and alleviating about 50% of seasonal labor shortages.

The COA also implemented the “New Farmers Training Program,” with a goal of training 30,000 young farmers over a tenyear period beginning in 2017. We are integrating guidance resources for new farmers with measures related to agricultural technology, land rental, preferential loans, and marketing channels. The COA is providing a sound environment to attract people to return to rural areas to farm, and so far we have trained over 6,000 people.

In order to increase value added for agriproducts, the COA has not only planned and set up modern cold-chain logistics systems and regional processing centers, as well as promoted a management system for primary processing of agriproducts, in 2018 we also completed plans to establish “Agricultural Products Value Added Prototyping Centers” at the District Agricultural Research and Extension Stations in Tainan, Kaohsiung, Taitung, and Hualien. These centers will assist farmers to use local crops to make prototypes for products, and will provide testing and processing guidance, in order to resolve the problem of processing for small farms, stabilize production and sales, and increase agricultural value added.

There are still many aspects of agriculture that need to be improved. In order to adjust Taiwan's agricultural structure and lay out a development blueprint, starting in April of 2018 the COA held a series of activities leading up to the “6th National Agriculture Congress.” There was an enthusiastic response from the general public, with over 10,000 participants. The National Agriculture Congress was convened on September 7 to 8 of 2018, with over 300 representatives of industry, government, and academia present. By bringing together their collective wisdom, the Congress produced 73 conclusions, which will be transformed into concrete and feasible policies to accelerate the transformation and upgrading of agriculture.

Agriculture has diversified values, including food safety, industrial development, environmental protection, and preservation of rural culture. I hope that through this Annual Report we can advance the public's understanding of and support for agriculture in Taiwan. I myself was born into a farming family in Pingtung County, and I have a strong sense of dedication to Taiwan agriculture. In the future we at the COA will continue to re-assess our policies on a rolling basis, in order to stay in close touch with the actual requirements of farmers, refine the implementation of all kinds of agricultural policies, and propose programs that can meet the felt needs of farmers. We hope that through collaboration between the public and private sectors we can seize opportunities for agriculture to advance and create a new situation for the sustainable development of agriculture.

Chi-chung Chen

Minister

Council of Agriculture

March, 2019