Taiwan Milkfish Farmers Benefit from Fixed Prices03 January 2014
TAIWAN - Milkfish farmers in Syuejia District, Taiwan, are able to sell their fish at a fixed price directly to the mainland thanks to contract farming through a Economic Cooperation Framework Agreement (ECFA) signed with China.
In 2011 the Chinese mainland and Taiwan started the early harvest program, meaning milkfish can be exported to the mainland with a preferential tariff.
The mainland and Syuejia district started a scheme of "contract farming" which allows aquiculturalists to sell their product directly to the mainland importer, Shanghai Fisheries General Corp. Group, at a price fixed by contract.
"It has helped fish farmers a lot, and now they are queuing for a quota to join the scheme next year," said Wang Wen-tsung, the president of Tainan milkfish farming association which brokered the deal, explaining the "contract farming" not only cushions fishermen against drastic price fluctuations, but also moderates the market price.
Huang Yi-he, 70, sighs when recalling a "terrible loss" one year when middlemen offered only 28 New Taiwan dollars (NTD) (93 UScents) for one kilogram of milkfish, far below cost price of around 50 NTD per kg.
"Now, there is no such worry," he said, because the contract sets a floor price which guarantees a profit.
This year, 125 fish farmers in Syuejia, some by renewed contracts, some by drawing lots, participated in the scheme, and each one had 18,000 kilograms of milkfish purchased through contract.
The contract price stands at 70 NTD per kilogram, Huang says. Adjusted for production costs, he managed to earn a profit of some 10 NTD per kilogram.
Huang's pond measures five hectares with an annual output of nearly 25,000 kilograms of milkfish as well as other aquatic products such as prawns.
According to the contract, 18,000 kilograms were purchased at the predetermined price, a profit of 180,000 NTD.
Though not such a handsome margin, Huang is content, as contract-bond purchasing offers him what is often denied to farmers: security.
Wang Wen-tsung says because of the contract farming, middlemen can no longer dominate the market, thus avoiding exceptionally low prices. "When market price rises above contract price, we sell our fish to higher bidders."
TheFishSite News Desk