The industry is branching out.
A dazzling array of colors--pearl whites clasping dark reds, green and yellow stripes--make up a waist-high canopy as buyers the world over survey a treasure trove of some of the world's most exotic flowers. More than 20,000 orchids at the 2005 Taiwan International Orchid Show at the end of March demonstrated just how far Taiwan's orchid industry has come since its inception three decades ago.
Organized by the Taiwan Orchid Growers Association (TOGA) in Tainan, the annual exhibition featured award-winning blooms, landscape displays, flower arrangements and ecological ponds. A series of activities, including academic conferences and workshops, was held at the Taiwan Orchid Plantation (TOP), a biotech science park.
"The exhibition, which covers the artistic, commercial and ecological aspects of orchids, aims at boosting their overall value and marketability," says Su Huan-chih, magistrate of Taiwan's orchid hub, Tainan County.
Last year, for the first time ever, Taiwan played host to the Eighth Asia-Pacific Orchid Conference and Exhibition. It brought more than NT$600 million (US$19 million) worth of sales to domestic growers.
Taiwan's agricultural industry as a whole has been going through a rocky stretch after the country's admission into the World Trade Organization (WTO) in January 2002. "The agricultural sector used to rely heavily on government subsidies to survive," he says. "Now, as a result of Taiwan's entry into the WTO, the domestic orchid industry must develop globally in order to prosper."
Accordingly, his mission is to help farmers enter foreign markets. "To face the challenge of globalization, our products must be internationally competitive," Su says. And with orchids his county's main agricultural success story, Su hopes other produce like mangoes and papaya will meet with similar success.
Taiwan has grown to be the world's largest orchid producer, accounting for more than 50 percent of global sales with an annual output of 50 million seedlings. And Tainan alone produces 42 percent of Taiwan's output. The nation ships approximately US$100 million worth of orchids per year, mostly as flasked culture seedlings, to Japan, North America, Europe and China. Su is confident that the corresponding figure could climb to over US$1 billion over the next five to 10 years--if new markets can be tapped.
The island cultivates thousands of varieties, with phalaenopsisamabilis, a native species--known as moth orchids--as the mainstay, followed by paphiopedilum (lady's slipper) , cattleya, oncidium (dancing lady) and vanda .
Orchids are notoriously difficult to cultivate, but moth orchids are easier to plant, have a shorter cultivation period (18-20 months compared with 30), but longer flowering time (two to three months compared with two weeks to one month). With their diversity of intriguing shapes and color combinations, orchids have charmed people around the world for ages. The rarity and high market prices of some strains add to their aura of nobility.
Taiwan's subtropical climate is ideal for growing orchids, blessed as it is with the necessary warm temperatures, ample sunshine, high humidity and frequent rain. During most of the year, greenhouses in Taiwan do not need to use energy-consuming climate-control systems, which help reduce production costs. In Japan, a moth orchid seedling takes up to 30 months to bloom, whereas it takes only 18 months or less in Taiwan.
One of the consolidating and stabilizing changes in the industry was the entry of Taiwan Sugar Corp. (Taisugar) during the late 1980s. Thanks to its abundant land, human resources and available capital, the state-run enterprise was able to produce moth orchids on an industrial scale.
The company's mass production helped establish industry standards and a framework for production systems. Orchid greenhouses in every part of Taiwan have since followed Taisugar's model by importing computer-controlled facilities from Europe and using double-layer black nets to shield the blooms from the sun. Taisugar's lower production costs brought flowers out of the specialists' market to the general consumer, and its success encouraged other corporations to enter the field.
"Taiwan's excellent climate and topography, combined with the application of sophisticated automation and unceasing R&D, make up the nation's potential for world leadership in orchid cultivation," says TOGA Chairman Chien Wei-tso. "In particular, Taiwan holds the edge in varietal development, tissue culture and cultivation techniques."
As well as gathering species the world over and improving them through crossbreeding, Taiwanese growers can control flowering periods and provide a wide variety of flower shapes and color combinations to appeal to consumers.
However, Chien notes 70 percent of domestic orchid cultivation operates on a small- and medium-sized scale of 500 to 1,000 ping (18,000 to 36,000 square feet). Chien is concerned that if Taiwan's orchid farmers do not cooperate or consolidate, the orchid industry may not continue to see the gains it has witnessed over the past three decades.
Moreover, in recent years many Taiwanese growers have relocated to China in pursuit of cheaper production costs. Once they successfully fulfill domestic demand in China, they will turn to the international market and likely become a threat to Taiwanese growers who are still based here in the next three to five years.
Chien urges domestic growers to improve the quality and yields of their produce, while increasing automation to reduce labor costs. He also suggests government agencies conduct in-depth market analyses on the needs of different countries so domestic growers can gain a stronger foothold in these markets. In addition, the government can help by lowering transportation costs, providing low-interest loans and freeing up public land for use in floriculture.
In fact, further government assistance is within reach. The establishment of TOP, entirely devoted to orchid research and development is an example of the government's active role in supporting the industry. The three-phase development project began in 2003 with a total investment of NT$2.06 billion (US$65 million), and it is scheduled for completion by 2008.
Situated on a 200-hectare tract of land leased from Taisugar, the orchid plantation will house state-of-the-art infrastructure such as a quarantine station and packing, shipping and customs facilities.
"By developing new varieties, upgrading yields and enhancing marketing, TOP will pioneer the globalization of Taiwan's agricultural industry," says TOP Director Kao Shu-jen. "We're looking to technology such as genetic engineering to improve yields, produce hardier varieties and gain greater control over the appearance of new varieties."
Kao thinks increasing yield rates hinges on the production process. In this regard, the plantation will standardize production, marketing and distribution procedures in order to raise operational efficiency and ensure product quality. He also says the whole production procedure will be required to meet international ecological and social standards in the near future. Accordingly, the park will help domestic growers tackle this issue, particularly concerning the use of pesticides.
On another front, TOP will move to help the small- and medium-sized producers with international marketing. "Sometimes, the most important factor for a successful agricultural product is not how to produce it, but how to develop markets for it," he says. "Consolidating the marketing and sales system is just as important."
Apart from conducting market research for industrial reference and species collection for R&D, Kao's administration will establish a product certification system to enhance the quality and image of Taiwan's orchids internationally.
In principle, TOP will be open to biotech companies, growers, traders, industrial experts, research institutions and innovation incubators. Resident individuals or companies can lease a plot of land and take out a government-backed low-interest loan to build greenhouses to their own specifications, or they can rent ready-built ones.
"We hope to produce a cluster effect by gathering all the concerned parties together for resource integration and sharing in terms of experience, information, knowledge and technique," Kao says. "The plantation is also designed to function as a one-stop service window for foreign buyers, who can purchase sundry orchids with ease."
For the time being, a total of 12 individuals and companies have signed up for plots at TOP, with 29 greenhouses on 22 hectares. In the next stage of the project, another 35 hectares of land will be leased and 75 more greenhouses built.
Wu Ming-chu has been cultivating orchids for 25 years and is one of the growers at TOP. Around 80 percent of his produce is sold here in Taiwan. "My farm is in a remote area. It's not easy for foreign buyers to access it," he says. "I'm getting involved in TOP to develop more sales channels abroad as the domestic market is nearing saturation." Wu says in the past, flower growers like him had very little information and few resources in terms of talent and investment capital. They could only learn from trial and error and this took a lot of time.
By moving into TOP, he says he'll have more opportunities to learn from other growers, benefit from R&D and consult with experts. "It's really a great comfort to know that we no longer have to do business single-handedly," he says.
Moreover, because most individuals operate on a small scale, Wu says producers can cooperate, for instance, on volume when they receive large orders. "This industry features low turnover, high investments and huge risk. But its production value is among the highest in agricultural products," he says. "Orchids are a cash crop, or say, a strong currency. As long as the quality is good, selling them at very good prices is no problem at all."
Wu is conscious of the importance of developing quality seedlings to ensure that adult plants fetch market prices. About three years ago, he invested more than NT$10 million (US$317,460) to set up a lab and recruit an R&D team for variety development.
Wu has cultivated more than 100 orchid varieties. He specializes in planting moth orchids, citing their widespread popularity, range of colors and high production volume. Nevertheless, he plans to gradually reduce his varieties to 20 or 30 so as to achieve production economies of scale.
"We have a wide range of orchids in Taiwan. In order to make the most of this advantage we have to select those that can be mass-produced and concentrate on types suited to different markets," he says. "With the concerted effort of the government, the industry and academia underway, I look forward to a promising future for my own business and the whole industry."
After nearly three decades of sustained development, orchid cultivation in Taiwan has grown from an amateur hobby for high-income professionals to a fully-fledged industry with commercial production on a large scale. Due to the hard work of the myriad farmers and corporations, Taiwan now plays a leading role in the global supply chain of high-quality orchids.