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I. Impact on agriculture

After years of negotiating for accession to WTO, the ROC finally became the 144th member of WTO in January 2002, under the name of Chinese Taipei. In the face of radical transformation consequent to liberalization and internationalization, the agricultural sector has suffered relatively lagged adjustment in production and increase of farms products importation, which brought about the fall of market prices of many domestic products. Particularly those with Non-Tariff-Measures (NTM) protected products including rice, Asian pears, peanuts, citrus fruits were affected last year. According to Council of Agricultural (COA) statistics, the crops prices fell by 4.7% in 2002, with vegetables and fruits falling by 19%. Nevertheless, the agricultural production index rose by 3.06% in 2002 because of fewer abnormalities in climate conditions. The fishery sector also registered a 6.26% increase, whereas the livestock sector decreased 2.34% in the same year.

The agriculture sector employs 7.55% of Taiwan's labor force. In 2002, 29,000 of the labor force were turned back to rural area due to the economic recession in which unemployment rate was over 5%. This phenomenon made redundant labor situation in agricultural sector more acute, as it ran counter to the preparations Taiwan made for the reduction of the number of farmers. It was estimated earlier that accession to WTO, could cause some 20000 farm leavers in the first year.

The agriculture sector produced 1.95% of total Gross Domestic Product in 2001. In 2002 it decreased to only 1.87%. With such small percentage contribution, the agriculture sector has been characterized as insignificant in overall economy. It was due to this perception that the Executive Yuan reduced the COA budget in the last two years. It only allocated the COA NT$ 87.8 billions and NT$ 86.7 billions respectively in 2001 and 2002. It seems that the government was insensitive to the vulnerability of agriculture in facing the opening up of market to foreign products, to attest, the COA budget for 2002 was down 3.59% from 2001, and further down 3.25% in 2003.

II. The concession made for accession to WTO.

Taiwan has implemented trade liberalization policy since 1970's with tariff reduction and removal of some import restrictions. Although most of Taiwan's farming families have a small holding of about one hectare in average, the agriculture sector nonetheless went along with the liberalization measures introduced by the government. Before the admission to WTO, the aggregate trade protection level in Taiwan was lower than some developed countries. For example, Taiwan's PSE (producer's subsidy equivalents) in 1987 was only about 25%, lower than 79% in Japan, 62% in Korea and 33% in the U.S.A. In fact, even before Taiwan's entry to WTO, more than 90% of the agricultural products including most vegetables, feed grains, flower, and fishery products were on the list of free importation to Taiwan, leaving only 41 products with NTM restriction.

During the consultation for accession to WTO, Taiwan has made further concessions as follows:

a. Reduction of tariff rates from 20.6% to 12% in 2002, a 41.7% reduction.

b. Lift all inconsistent NTM in the conversion of tariffication measures. This applied on 41 products:

(1) Their import have been banned except in the case of the shortage of supply where a special import license wound be granted. These products included rice, sugar, Asian pears, peanuts, adzuki beans, garlic bulbs, bananas, mangos, fowl meat, animal offal, pork bellies, persimmons, dried shiitake, betel nuts, liquid milk, dried day lily, longan, longan pulp, mackerel, guavas, litchi, in total thirty products.

(2) The import have been restricted to area including apples, peaches, grape fruits, Citrus fruits, pineapples, and others, in total eleven products.

c. Reduction of internal support

According to the Agricultural Agreement of the Uruguay Round for the developed countries, the total Aggregates Measure of Support (AMS) has to be reduced by 20% within six years. Using as base year an average of 1990-1992 level of support totaling NT$17700 millions, Taiwan should reduce in total NT$3500 millions. Consequently, the subsidies in price support program for soybean, corn, sorghum, tobacco leaf, wine grape have been cut. At the end of 2000, Taiwan completed the goal of reduction of AMS.

III. Unfavorable factors in agricultural development

Agricultural development in Taiwan has been facing difficulties arising from its own basic problems and increased pressure of the rapid changes in politico-economic and social transformations both at home and abroad. Those basic problems include small farming scale with inherent shortcomings of farmland fragmentation. In 2001, there were 726,575 farm households cultivating 848,743 hectares of land. The average farm size today is still slightly over one hectare per farm household, too small for efficient agricultural production. Secondly the agricultural sector is now suffering from aging labor force. In 2001, 35-64 years old occupied 52.7% and over 65 years old 8.4% in the agricultural labor force. As the number of aging agrarian labor force increases, efficient farming would become untenable. Thirdly, part-time farming accounted for over 80 percent of all farming households since 1980. As part-time farmers were not likely to invest in the capital and training necessary for farming, this would be detrimental to agricultural development. Furthermore, there were others challenges that have to be met. These include, among others, pollution induced through farming, over-production of some products and the competition of imported foreign products after accession to WTO. However, agriculture is still an important sector in the overall economy. The government should accelerate the adjustment program to meet above mentioned unfavorable factors and challenges.

IV. Future prospects

Taiwan's rapid economic growth and impressive records have been praised by Westerners as "Taiwan Miracles". In this success story of transformation from poverty to prosperity, from underdeveloped to modernity, the agricultural sector played a decisive role by paving the foundation for the overall economic development. At the start of the new century, and with Taiwan becoming an industrialized country, agriculture still has an important role to play. It helps to attain multiple objectives of food security, promotion of farmers' welfare, environmental conservation, and reconstruction of rural area. The government should see to it that agricultural development continue to receive due attentions.

In fact, Taiwan still holds some advantageous factors for agricultural development. These factors include diligent working farmers with better education and experience than their counterparts in other developing countries, a group of comprehensive agricultural research institutions with potential innovation capabilities, solid well-functioning farmers' organizations in almost every town, advanced infrastructure, and potential markets in nearby Japan and Mainland China. Regardless of any adverse effect caused by the accession to WTO, Taiwan's agriculture still has room for further development if the government adopts vigorous adjustment program. The following measures are recommended:

(1) Establish more secure and balanced food production system 

With the farm product markets already liberalized in other foreign countries, some important foods products such as rice, meats, vegetables, sea food and fruits, should be placed under a supply/ control allocation system for emergency situations. For rice, the target of production should be adjusted from self-sufficiency to the balance of supply and demand. The exacerbated supply from importation has already caused the fall of rice price in the market. As the target demand of brown rice will be approximately 1.6 million tons per year, the reduction of rice production is indispensable, and should strictly implement the diversion of paddy fields under the Reclamation of Paddy Fields and Dry Farmland Program in order to maintain further balance of the supply and demand of rice. In order to increase the competitiveness, the brands of quality domestic rice, should be promoted by way of production and marketing control and reinvigoration of interest in rice consumption. The supply of some of the fruits should also be regulated by scaling down the cultivation area so as to maintain a higher price level during seasonal production.

(2) Development of promising crops, fishery and livestock products

The government should mark out those highly competitive products as the priority targets to be promoted. This can be achieved by application of advanced horticulture technology, modernization of operation, nursery of healthy trees, effective control of disease, adjustment of fruit maturation, cultivation of improved fruit strains, phasing out non-competitive crops, and shakeout of low-efficient fishing vessels. Furthermore, Taiwan's agriculture could pursue sustainable future by vigorous endeavor in developing Taiwan as the aquatic seeds supplying center, expansion of marine cage-culture, strict control of foot-and-month disease, weeding out low efficient livestock farms etc, 
The promising products mentioned above should be appraised on the basis of the market-oriented productions. Naturally these products should have added value, and share competitiveness in international as well as in domestic market. Once being selected, the government should focus on guidance and support, organizing the producers in joint operation and in effective strategic alliance in marketing. Of Taiwan's agricultural products, such items as leafy vegetables, tropical and subtropical fruits, aquaculture fish, flowers, fresh and unrefrigerated pork, particularly the meat of "black pig", genuine native chicken, and mule duck etc, still have edges in competitiveness.

(3) Application of technology

Since Taiwan maintains a number of agricultural, livestock, fishery and forestry research institutes and a reservoir of excellent and experienced researchers, it is highly capable of meeting the adverse situation caused by the accession to WTO. Taiwan's farmers are also very adaptive to new technology and methodology. Entering into the new century, Taiwan has already put priority on the application of agro-biotechnology at the farm level. Findings or innovations of research with a potential for commercialization should be transferred to the private sector and farmers. Among those findings which have been successfully applied to production include tissue culture, healthy seedling, biopesticides, biofertilizers, breeding improvement, vaccines, etc. Thus, banana, citrus, horticulture (in particular orchids), and ornamentals could become the hopefuls for competitiveness in the future. As for improvement of operation, farming or breeding rezoning such as establishment of agro-biotechnology production park (zone), agriculture, floriculture, organic crops and other fruits zones should receive utmost attention.

(4) Modernization of marketing system. 

In order to compete with the imported products, the modernization of marketing system is imperative. It is urgently needed to build efficient and integrated distribution centers with the facilities of wholesale, packing, cold storage and processing. While these wholesale centers should be established in Taipei, Taichung and Kaohsiung, modernized farm products assembling sites, equipped with cold storage facilities, system of selection, classification of packaging, pricing of the products and rapid transport and delivery system, should be set up in the major production areas. It is particularly important to set up a direct marketing network by integrating the farmers and fisherman's association into strategic alliance. The network will facilitate the allocation of domestic farm products, enabling them to compete with imports in freshness.

(5) Promotion of recreational agriculture 

The conversion of a traditional farmstead into a scenic farm village combining the landscape, culture, farming and suitable accommodation should be encouraged in the future. Taiwan is densely populated, but the rural area is abundant with picturesque sites. The establishment of tourist farms meets the demand of city dwellers in search of recreation. Visitors to the tourist farms could pick their own fruit and vegetables, spend quiet and peaceful leisure time, watching birds, picnicking and enjoy country style food. More than a way out, agro-tourism could in fact grow into an industry in the future.

V. Conclusion

Agriculture should not be separated from the perspective of global economy, but in facing the accession to WTO, the agricultural sector is the most vulnerable one and has received the biggest jolt in the post-accession period. Nevertheless, agriculture still is the foundation of a country. In the past decades, agriculture contributed greatly to the overall growth of the economy. It provided labor force, capital, products for processing industry, and an improved market for non-farm goods and services. Today, agriculture not only provides healthy and safety food, but also contributes in conservation of soil and water, and preservation of sceneries and tourist sites. Most importantly, a stable agricultural development will safeguard the socio-economic and political stability in our society. With the proper guidance from government, Taiwan's hard working farmers should be able to weather out any difficulties that confront them and open up a new era in Taiwan's agriculture.