Taiwan Home-grown Food Firms Get Boost After China Scandal

Scandals surrounding poisoned Chinese foods have taken a heavy toll on Taiwan's bakeries and makers of dairy products in recent months, but could provide a long-term boost for local food makers.

Liu Li-chien, who produces dried persimmons according to a 150-year tradition, thought his days in business were numbered when the island lifted restrictions on Chinese imports.

In 2004, to conform with World Trade Organisation rules, Taiwan lifted its long-term ban on imports of Chinese-made products, and cheaper, and generally poorer quality, goods flooded in.

Persimmons were no exception. Customs figures showed imports of China-made dried persimmon surged to 1,009 tonnes last year, from 919 tonnes in 2005.

"I have been highly suspicious about their quality although importers claimed Chinese-made dried persimmons passed Taiwan's food safety tests," Liu said.

The problem, he said, was the price. "It costs local makers at least 80 Taiwan dollars (2.4 US) to make half a pound of dried persimmons. But China-made dried persimmons cost half that."

As a result, the number of small dried persimmon makers in northern Hsinpu town, centre of the Taiwanese industry, has dropped to 17 from a peak of 25 in recent years.

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The persimmon growers have felt the pinch, too.

Orchardists in Fanlu, a township in southern Taiwan supply around 10,000 tonnes of fresh persimmons each year, accounting for 30 percent of all persimmons produced in Taiwan.

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Lin Wen-ching, of the Fanlu farmers' association, said incomes have been slashed thanks to the influx of Chinese produce.

"It is pretty hard for the growers as the sale price is very close to the production cost," he said.

But a decisive twist developed in the wake of China's tainted milk scandal earlier this year when three Taiwanese toddlers and one woman developed kidney stones after drinking Chinese milk products containing the industrial chemical melamine.

As the scandal deepened, with Chinese dairy products being removed from shop shelves across the world and hundreds of thousands of children in China sickened by the poisoned milk, Taiwanese began to look with wariness at products from across the water.

China and Taiwan have been foes for 60 years, since the communists won the civil war in 1949 and the losing nationalists fled to the island.

But since President Ma Ying-jeou took office in May, there has been a thaw in relations, as his government regards closer ties with China as a solution to economic troubles on the island

Many Taiwanese fear the negative effects of this growing closeness. Many jobs have already disappeared as the manufacturing sector has largely moved to China to take advantage of a huge, cheap labour pool.

There are concerns that more jobs will go as Chinese workers and students are permitted in.

But the milk scandal appears to have awoken many Taiwanese to the weaknesses of China's economic growth, in which the race for profit has often undermined regard for consumer safety.

As Chinese dairy products were removed from Taiwanese shops, and news stories reminded consumers problems have been detected in a wide range of food and other products from China, the island's own producers took heart.

Their optimism has been backed up by the Council of Agriculture, which says the milk scandal has prompted consumers to turn to local produce.

"When shopping, I used to pay no attention to where products were made. But now after the milk scandal, I refuse to buy anything from China, especially food," said a man surnamed Lin who was visiting Liu's persimmon orchard.

Taiwan's once-troubled dairy farmers, too, say business is coming back, with sales of local milk up by 250 tonnes per day, with a total surge of 20 percent since October.

"There is no surplus milk this winter," said Wang Cheng-taung, vice chairman of the Agriculture Council.

Source-AFP
SRM