Measures for stabilizing vegetable supplies

  • Date: 2016-11-07

I. Background

Vegetable prices in Taiwan saw sharp fluctuations this year after a spate of typhoons in September combined with persistent rains brought severe damage to much of the island’s vegetable farms, especially gourd and melon crops, which required longer recovery periods. To stabilize prices, the government released stockpiles of fruits and vegetables, expanded vegetable imports, helped farmers get quickly back on their feet, gradually adjusted market supply and demand, and helped distributors set up special retail sections to increase the supply of low-priced fresh vegetables.

To prevent sellers from hoarding vegetables or driving up retail prices, the Executive Yuan also launched joint operations by the Council of Agriculture (COA) and Fair Trade Commission (FTC) to conduct on-site price checks at local markets and track prices along the entire distribution chain, from importers to wholesalers to retailers.

As these measures were implemented and farmers resumed production, vegetable prices gradually returned to normal by late October. The government will continue to stabilize market supply and demand by keeping a close watch on market conditions and cracking down on price collusion to protect consumers.

 

II. Key government policy: stabilize consumer prices

The government’s key policy is to stabilize the prices of consumer goods and minimize the impact of price fluctuations. In addition to creating a website listing commodity prices that is open to the public, the Executive Yuan formed a price stabilization task force that includes multiple agencies to monitor changes in domestic and international commodity prices, survey domestic consumer prices on a regular basis, track price index trends for daily use items, and adopt timely stabilization measures. To monitor daily commodity prices along the entire distribution chain from production to point-of- sale, the task force has divided the chain into three segments:
 

1. Upstream: Stabilize bulk import prices and “farm-gate” prices. This includes temporarily reducing tariffs on bulk imports and exempting certain goods from business taxes, keeping sales prices stable at state-run enterprises, tracking day-to-day changes in wholesale prices and the produce prices charged by farmers.

2. Midstream: Reduce transportation costs for farmers and fishermen and clamp down on collusion by middlemen. Measures include providing gasoline subsidies to farmers and fishermen, offering discounts on public transport oil costs and investigating midstream distributors for collusion or illegal hoarding.

3. Downstream: Monitor market prices, set up “anti-inflation” retail sections, and punish hoarding and price gouging. This includes stabilizing market prices of agricultural goods, creating a market price checking mechanism, helping stores set up “anti-inflation” sections offering low-priced produce, working with businesses to fight inflation and stabilize prices, promoting price information transparency and intensifying investigations into collusion, illegal hoarding and price gouging.

 

III. Countermeasures for recent typhoon-related price fluctuations

A. Pre-typhoon: Prepared for the psychological impact of price increases, taking preemptive measures to stabilize vegetable supplies

1. Built up an 1,800-metric ton rolling stockpile of refrigerated vegetables by guiding farmers associations to refrigerate cabbage, napa cabbage and other vegetables on rotating basis. Drafted contracts with farmers to supplement 200 metric tons of radishes, carrots, onions and potatoes to be released depending on day-to-day sales at the Taipei wholesale fruit and vegetable markets.

2. Linked the Taipei Agricultural Products Marketing Co. and local farmers associations to 271 retail supermarket locations in the Taipei area (including PXMart, Wellcome, Carrefour, Far Eastern A-Mart and RT-Mart) to augment supplies of low-priced fresh vegetables such as cabbage, radishes, carrots, onions and potatoes, giving consumers more options.

3. Stockpiled 400 metric tons of frozen domestically produced broccoli and cauliflower to supplement supplies at farmers markets in the Greater Taipei area, the MamaFisch grocery chain and other retailers.

B. Post-typhoon: Issued timely news on vegetable supplies, alleviated panic buying, implemented related measures

1. Released stockpiles of fruits and vegetables: Stabilized market supply and demand by continuing the release of stockpiled cabbage, napa cabbage and root vegetables. As of October 31, a total of 3,936 metric tons of cabbage, napa cabbage and other refrigerated vegetables had been put on the market. The government continued to maintain 400 metric tons of frozen broccoli and cauliflower on hand to augment supermarket supplies and provide consumers with more choices.

2. Expanded vegetable imports: Encouraged farmers associations to import more vegetables and supplement market supplies depending on daily sales volumes and prices. In the first nine months of 2016, fresh vegetable imports jumped 42.7 percent year-on-year from 166,046 metric tons to 236,924 metric tons, while fresh fruit imports rose 22 percent year-on-year from 220,973 metric tons to 272,289 metric tons.

3. Helped farmers resume production quickly: Guided farmers in vegetable production areas to resume production of fast-growing leafy greens such as bok choy and gradually increase supplies.

4. Set up low-priced vegetable retail sections: Helped farmers associations set up special low-priced vegetable sections in Taipei area supermarkets by November 15, increasing supplies of fresh cabbage, radishes and onions at the Carrefour, A-Mart, RT-Mart and Wellcome chains.

5. Launched interagency operations to check market prices and illegal practices: To prevent hoarding or price gouging, the FSC and the COA’s Agriculture and Food Agency on September 28 began dispatching agents daily to traditional markets and the five major supermarket chains to check consumer-end prices of fruits and vegetables. Official notices were also sent to importers, mass retailers and distributors requiring detailed import and sales information including vegetable prices at each stage of the distribution process, from import to wholesale and retail.

Persons found to benefit by illicit means such as price-fixing or collusion will be subject to investigation and penalties pursuant to the Fair Trade Act and the Agricultural Products Market Transaction Act. Persons suspected of violating the Criminal Code, Article 251, by hoarding supplies with the intent of raising prices and profiteering therefrom will come under strict investigation. These measures are intended to preserve order in market transactions.

 

IV. Conclusion

With the arrival of autumn, the ideal season for vegetable growing, farmers have resumed crop production and vegetable prices have come down to normal levels. The government will continue to monitor market prices, augment vegetable supplies, stabilize market supply and demand, and crack down on illegal activities. The government will also prepare farmers for the impact of climate change by educating them on the use of wind-resistant structures to fortify greenhouses and net houses and increase the nation’s vegetable supplies. Fruit and vegetable wholesale markets will also be encouraged to sell their produce through online auctions to promote open, fair and competitive price formation. These measures will help preserve order in market transactions and ensure citizens’ rights to basic necessities.