The government must take into account WTO regulations before it adjusts the public grain procurement price, the Ministry of Agriculture said yesterday.
The price at which the government purchases grain is under scrutiny after opposition lawmakers proposed raising it to guarantee the income of rice farmers.
The public grain procurement price has not been adjusted for 13 years despite inflation, opposition lawmakers said in a written motion, adding that the government should raise the procurement price by NT$5 per kilogram to better protect farmers.
Photo: Lee Wen-de, Taipei Times
“The objective of the public grain procurement system is to increase the profits that farmers can make, which would not necessarily be achieved by increasing the procurement price,” Minister of Agriculture Chen Junne-jih (陳駿季) told reporters on the sidelines of an event in Taipei yesterday.
Any agricultural policy must ensure that farmers benefit from it and enable the agricultural industry to progress, Chen said.
Chen also warned that the public grain procurement system could contravene WTO regulations on reducing domestic support in agriculture.
“The WTO regulations impose a cap on domestic support in the agricultural industry. Any excessive financial support from the government could cause Taiwan to breach the regulations. It is a factor we must take into consideration when implementing any changes to the public grain procurement system,” he said.
Discussions over amending the public grain procurement system must consider different aspects, particularly as we are trying to join various international trade organizations, Chen said.
Former minister of agriculture Chen Chi-chung (陳吉仲) also warned that opposition lawmakers’ proposal would only push down the price of rice and would not increase the income of rice farmers.
Raising rice procurement prices could expand the nation’s rice fields from 23,000 hectares to 30,000 hectares, causing supply to further exceed demand, Chen Chi-chung said.
When 14,000 tonnes of annual rice imports is added, the excess supply of rice could top 500,000 tonnes, he said.
Such a policy could impede the progress that has already been made in diversification of grain production, he added.
For rice farmers to increase their income, Chen Chi-chung suggested that the government amend the rice income insurance system. The basic income for rice farmers who secure certifications for organic products, present production and sales history of their products, and adopt eco-friendly cultivation techniques can be NT$168,000 per hectare.
The income for cultivating rice is about NT$150,000 per hectare, and the insurance plan could make up the difference of NT$18,000, he said, adding that this is the only way to ensure that rice farmers can earn NT$5 more per kilogram.
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