Business

Taiwan’s green soybeans stage comeback in Japan

The chubby Kaohsiung No. 9 is helping turn around Taiwan’s green soybean sector. (Photos courtesy of Chou Kuo-lung)

• Publication Date：02/05/2012
• Source： Taiwan Today
• By  Meg Chang

Taiwan’s green soybean growers are staging a remarkable comeback, beating off mainland Chinese rivals to regain dominance in the lucrative Japanese market that accounts for 97 percent of local exports.

Rich in vegetable protein, unsaturated fats and dietary fiber, green soybeans are a popular beer snack in Japan. The crop had been Taiwan’s top agricultural export for more than three decades, until it was replaced by butterfly orchids in 2007.

According to Council of Agriculture statistics, there are over 8,000 hectares of farmland dedicated to growing green soybeans in Taiwan, 70 percent of which is located in Kaohsiung City and Pingtung County. Annual output for the nation’s 2,600-plus farmers exceeded 70,000 tons last year. A total of 31,564 tons was shipped to more than a dozen countries, generating US$63.14 million in revenues, up 14.8 percent from 2010.

“Taiwan used to dominate the Japanese market because no other Asian nation recognized the opportunities available in that country,” said Chou Kuo-lung, senior researcher at the COA Kaohsiung District Agricultural Research and Extension Station.

Chou, a key figure in turning the local sector around, said Taiwan’s position in the Japanese market came under threat in the 1990s after the ROC government began removing barriers to investment in mainland China, including the agricultural sector.

“Many plantations and processing facilities on the other side of the strait, which were set up by Taiwan-owned companies, enabled mainland China to make massive inroads into Japan,” Chou said. “At the same time, Southeast Asian countries like Thailand were winning market share on the back of lower production costs.”

By 1996, Taiwan had surrendered its leadership in Japan to mainland China, and just five years later, mainland Chinese exports were double those of Taiwan’s. This development triggered grave concerns among local farm operators, who were convinced their sector would be wiped out if action was not taken.

The turning point came when Chou and a group of local growers visited mainland China to study their rivals, observing that economy of scale was the secret of the other side’s success.

“Advantages of this approach were plainly evident,” Chou said. “Larger plantations made mechanized farming possible, which is another way of reducing overall production costs and ensuring competitiveness.”

Based on the findings of Chou’s cross-strait visit, the COA advised state-run Taiwan Sugar Corp. to release vast amounts of fallow sugar cane fields in southern Taiwan, leasing out the land to soybean farmers keen on adopting the new growing method.

“These operators undertook a lengthy trial-and-error process in selecting the farming equipment from Europe,” Chou said, adding that this was a key factor in the sector’s transformation.

The introduction of Kaohsiung No. 9, a new variety of soybean developed by Chou, for cultivation in 2006 represented another breakthrough.

Environmental adaptability of the bean saw it increase per hectare output by up to 30 percent, a strong economic incentive for farmers. It soon became the dominant variety in Taiwan, accounting for over 70 percent of local output.

Chou said the smooth-textured chubby bean is not the only advantage Taiwan’s soybean sector now boasts. Superior processing technology lets growers harvest and process green soybeans for export in only four hours, a major component in preserving the crop’s freshness, texture and flavor.

“This drive for quality,” Chou said, “is helping Taiwan exports command a 30-percent price premium over their rivals.”

Mechanized farming is helping Taiwan’s green soybean growers regain their competitive edge.

For KDARES Director-General Huang Tze-chung, the efforts of Chou and local soybean farmers reaffirm his belief that hard work brings good luck, as illustrated by the discovery of excessive pesticide residues in mainland Chinese exports bound for Japan.

“This incident, along with several other food contamination cases involving mainland Chinese produce, prompted the Japanese to turn their attention to Taiwan exports,” Huang said.

When these problems began surfacing in 2006, the COA was on the ball, quickly assisting farmers to meet the Japanese government’s new pesticide regulations.

“Taiwan’s shipments have never been rejected on the grounds of contamination,” Huang said. “This is one of the reasons why we were able to rebuild our position in Japan to the point where we now account for 42 percent of green soybean imports, while mainland China and Thailand each make up 25 percent.”

But for Hou Chau-pai, who operates a 200-hectare soybean plantation for Kaohsiung-based Bai Sian Agricultural Products Co. Ltd., booming demand for Taiwan produce has not enabled growers to access more farmland and boost output.

“Limited production has left us unable to capitalize on Japan’s preference for Taiwan soybeans and increase market share, let alone develop new markets in other parts of the world.”

The absence of a free trade agreement between the two countries is also hamstringing Taiwan’s competitiveness, Hou said. “The importance of an FTA is best illustrated by the increasing popularity of Thai exports in Japan after the two countries signed an economic partnership agreement in 2007.”

While Hou acknowledges that local farmers are committed to maintaining their leadership in product quality, an FTA would work wonders in putting Taiwan over the top in terms of market penetration.

With increasing cross-strait exchanges, Chou said it is hard to prevent outflows of cultivation know-how to mainland China. But the researcher said the COA is fully prepared to safeguard Taiwan’s advantages.

“For starters, the COA maintains a seed reserve and issues releases to local growers on a regular basis to ensure quality consistency of Taiwan’s output,” he said.

The COA is also continuing R&D efforts aimed at sustaining Taiwan’s competitive edge. Over the past decade the council has spent more than NT$160 million (US$5.2 million) developing six new varieties of soybeans and upgrading Taiwan’s processing technology.

“We will keep introducing new varieties every two to three years so Taiwan can continue to be a pacesetter in the Japanese market. We will introduce a new variety with a taro flavor later this year, and also try to develop a species that can be harvested three times a year.”

Efforts are also being made to register COA-developed species in Japan, Chou said. “We already have the rights for two beans, with three more under review.”

For Chou, the green soybean sector offers a blueprint for Taiwan’s agricultural sector. “The only way to overcome future challenges is to embrace change and undergo a process of reinvention. I think the sector is proving itself a worthy example.” (JSM)

Write to Meg Chang at meg.chang@mail.gio.gov.tw