I. Current Situation and Development Trend of the World’s Agricultural Biotechnology Industry

(1) Growing importance of biotechnology application in agriculture

With the advancement in medicine and technology, people are enjoying longer lives while the population continues to increase. How to resolve the food supply problem so that man does not have to suffer from famine and hunger has already become a major challenge people around the globe are trying to overcome. During the previous century, agriculture’s green revolution has made a significant contribution to this problem, yet of the 6 billion people in the world today; 800 million are still in the state of malnutrition. Moreover, predictions forecast that by the year 2050, the world’s population will have increased to over 10 billion people. Due to man’s need for living and activity space, it will be even harder in the future to expand farming land to increase food supply. The only way to resolve this problem is to rely on enhancing the production methods of breeding, testing, farming, disease prevention, and nutrition so that plants and animals that originally could not be grown or difficult to raise in certain areas can now be cultivated and grown. Furthermore, by boosting photosynthesis, increasing the efficient use of nutrition as well as enhancing our ability to ward off disease and adversity can help achieve the goal of increased productivity and improved quality. However, the long-term use of chemical fertilizer and pesticides in traditional agriculture has led to the worsening of soil and water conditions. The waste created by the farming industry and deterioration of the ozone layer has seriously affected the quality of living. In spite of this, the swift development in biotechnology in recent years not only has provided several solutions to these problems, but has also given people many good things to look forward to as it continues to progress. As such, the importance of applying biotechnology in agriculture is steadily growing.

The application of agricultural biotechnology is currently under parallel development. On one hand it is being widely applied with traditional breeding, testing, farming, disease prevention, fertilizers, and pesticides, and has significantly improved production volume and the quality of traditional agriculture. On the other hand, the application of new biotechnology has allowed agriculture to collaborate with medicine, food, and environmental protection industries, expanding whole new arenas for agricultural activities and creating new industries in the process. The economic value created by these new technology and applications is growing rapidly and with unlimited potential.

(2) Development trend of the worldwide agricultural biotechnology industry

1. Fast growth in R&D and commercial applications of genetically modified organisms

Generically modified organisms (GMO) is the most important example of biotechnology application in agriculture. Since the commercialization of genetically modified crops in 1996, its growth has taken off at a very rapid pace. According to statistics, the world’s total area used for farming has already reached 125 million acres. Of the staple crops grown, soy beans, corn, and cotton have the highest economical value. Generically modified strands of soy bean, corn, and cotton account for 46%, 7%, and 20% of the world''s total farming area today, respectively. Currently, the purpose for generic modification is still to help farmers lower their costs. The main generic feature introduced and applied most widely is weed killing repellents , but the future trend is to gradually introduce added value, emphasizing the benefits to consumers. Golden rice is such an example.
Today, the main growers of generically modified crops are the U.S., Argentina, Canada, Mexico, Romania, Uraguay, and South Africa. In the U.S., which is the most technically advanced of these countries, over 70 percent of the soy beans and cotton grown are generically modified strands. Attention should be paid to China, whose investment in generically modified crops is second only to the U.S. The amount China has invested in the research of generically modified crops equals that of all the developed countries combined and is further planning to quadruple its investment in research by 2005. Besides such crops as cotton, rice, corn, and grain, tomatoes, cabbage, potatoes, and melons are all targets of their generic modification research. Meanwhile, transgenic will focus mainly on anti-insect and anti-sickness research. As of 2000, China already has 251 generically modified crop varieties in the field testing stage. Many signs show that China will bypass conventional breeding and directly enter transgenic. What effects it will have on Taiwan is something worth observing.

2. The growing importance of managing and certifying Biosafety.

Although genteric modification techniques and its products have undergone many tests and cleared of any safety concerns, yet due to its short history coupled with the food safety incidents that occured in the 1990s, there is still growing concern among consumers and environmentalists over the safety of such products. This has led to even tighter management and control of biotechnology products. In terms of international trade, many requirements already exist in the Biotechnology Safety Agreement. As for the individual requirements of various regions, the development in the European Union should be carefully watched. In order to win the people’s confidence, the European Commission proposed a Gene Modified Product Control Act on July 25, 2001. Important points of the Act include:

(1) Products which contain GMO must be recorded and tracked from their place of production place, processing plant, up to point of sales.

(2) Animal feed which contain GMO and additives must be labelled.

(3) Labelling is requried where the specific DNA or protein of the GMO can no longer be identified in the final product.

(4) stablish a centralized agency to regulate GMO products in order to simplify the related review and approval process.

This Act is clearly stricter than current laws. Although the Act still has to be passed by the European Council as well as each European nation before it can be implemented, the tremendous market opportunites for GMO and its related products will affect how the EU regulates these products. Future evolvement not only involves legal implications, but will also impact the consumer movement, agricultural biotechnology, international trade, and even foreign diplomacy among the major nations.

3. New applications could change the face of agriculture

New biotechnology techniques, such as genetic engineering, has broke through the boundaries of plants and animals, and in addition has expanded the application of agricutural activities into the fields of pharmaceutics, medicine, food, and environmental protection. The underlying thinking in genetic modification today is not only to “lower invested costs,” but to also “enhance production value.” Hence, the concept of “molecular Farming” naturally evolved. Under this concept, the goal of growing plants or raising animals is no longer just to provide food, but might be used to manufacture protein medicine or high price nutritional ingredients. At the same time, the upcoming of animal cloning techniques and the concept of “other animal organs” (xenotransplantation) has helped close the gap between animal & poultry farming and the medical industry. Moreover, many environmental protection requirements can only be achieved through biotechnology produced feed, medicine, or processing. The production of these new applications is similar to traditional agricultural activities, but require millions of dollars.

4. Application of genome steadily being realized

As gene decoding techniques gradually mature, genomics and its application is becoming more and more important. On the plant side, presently, the Gene Sequencing of monocotyledono rice and dicotyledon Arabidopsis has been completed and the research focus now has shifted to DNA function, metabolism path, and metabolism remains. In the future, it is expected to be produced along with secondary metabolism remains, health foods, and medical material.

Compared to plants, research in the past on animal DNA has clearly been less aggressive, the main reason being animal research falls in between plants and Human Genome Programs, and thus not that easy to stand out. Moreover, the raising of animals and the vertical integration of its health care industry is insufficient, so investment in new technology is relatively low. Yet because the development of related techniques has slowly matured while animal DNA research and human medical research can complement each other. Research on canines, for example, shows that there are about 200 DNA diseases that are related to humans. Therefore, animal DNA research and application will continue to grow.

5. Industry operations is changing toward enterprise management

New techniques and new applications has brought about structural changes in the industry. In order to cope with the fast development and R&D needs of agricutural biotechnology, the industry operations is now headed toward enterprise management. During the past few years, several agricultural biotechnology companies have been established while the agricultural biotechnology department of a few large companies have spun off as new companies. Based on operation strategy considerations, agricultural biotechnology companies have followed suit with the pharmeceutical biotechnology companies and begun mergers and acquisitions. Large deals such as Bayer’s acquisition of Aventis CropScience was worth US$6.6 billion. The major multinational agricultural biotechnology manufacturers today include Syngenta, Monsanto, BASF, DowAgro, DuPont, and Bayer.

II. Development opportunities of Taiwan’s agricultural biotechnology industry

(1) Agricultural biotechnology is a must for the sustainable development of Taiwan’s agriculture

Agriculture played a very important role during the early stages of Taiwan’s economical development. Through joint efforts between the government and farmers, Taiwan’s agriculture recorded many outstanding achievements. However, Taiwan’s farming land is limited. With the coming of economic prosperity, the increase in labor costs, plus the small farmer system formed by land reforms, Taiwan’s farming land has been fragmented into too many small plots. This makes large scale commercial or mechanical farming difficult, and has thus reduced the global competitiveness of Taiwan’s agricultural productivity. For the farmers, their income has greatly declined. Taking the rice production in 2000 as an example, production costs per kilogram totalled NT$15.84 for the first cycle, and NT$18.95 for the second cycle. Meanwhile, the average wholesale price of rice per kilogram was only NT$18.13, which was close to or even lower than costs. Farmers made almost no profits. On the government side, agricultural production has rapidly declined from the country’s GNP, from 7.87% in 1982, down to 3.5% in 1995. In 2000, Taiwan’s total agricultural output totaled NT$364,397,212 thousand, accounting for less than 2% of total GNP.

The relatively low productivity of Taiwan’s agriculture has also created unbalanced use of the country’s resources. Currently, farmers, which represent 10% of Taiwan’s population, use 24% of the total land (or 50% of the non-forest area). However, productivity volume is relatively insufficient. This is not good for both the country overall or the individual farmers. In addition, after Taiwan enters the World Trade Organization (WTO), the agriculture department will be faced with requests from the international community to open up markets and lower subsidies. Under such pressure, traditional agricultural policies will be faced with serious challenges. Therefore, Taiwan must look for a new development path that has an overall, forward looking vision, and considers the future of farmers, their rights, and the overall benefits of the nation. Looking forward to agricultural development in the 21st century, besides satisfying traditional consumer needs, it must also provide global competitiveness and maintain the ecology of the environment in order to achieve sustainable development. Yet the key to all this is the advancement of technology. Hence, whether considering it from a global trend, national strategy, or industrial development standpoint, developing agricultural biotechnology applications will be the road that Taiwan’s sustainable agricultural development must follow.

(2) Development situation of Taiwan’s agricultural biotechnology industry

The job of promoting Taiwan’s agricultural biotechnology industry is based on the “Enforce Biotechnology Industry Promotion Program” issued by the Executive Yuan. Planning and execution is conducted by the Council of Agriculture. As many research projects, regulations, and industry promotions involves collaboration with the National Science Council, Department of Health, Ministry of Economic Affairs, and the Ministry of Finance, the Executive Yuan has thereby set up a “Biotechnology Industry Guidance Committee” The Team is made up of science political committee members in addition to the Minister and Deputy Minister of each Ministry and Department. The Team helps coordinate cross-departmental issues. In order to integrate upstream, mid-stream, and downstream resources as well as allow full coordination between the research projects and industry development, the Council of Agriculture has collaborated with Academia Sinica and the National Science Council in implementing the “National Program for Bio-Agricultural Biotechnology” Currently, phase one of the three year project has already been completed. Phase two will focus on the protection of plants, aquaculture farming, animal antibiotics, environmental protection, and health care/medicine use plants. In recent years, the Council of Agriculture has been aggressively amending related regulations. On one hand, it is investing resources to encourage related research and set the future direction of Taiwan’s agricultural biotechnology industry based on Taiwan’s rich material resources and global competition analysis. The focus will include plant sprouts, aquaculture farming, ranching (animal & poultry), animal use antibiotics, biotech food, biotech fertilizer, and biotech pesticides. It will try to break traditional methods by fully utilizing the strengths of the industry, the government, academia, and research fields. Initial results such as the planning and construction of fundamental facilities, amendment and discussion of regulations, common agreement on the research direction, etc. have all been completed.

Of course, a lot more effort is still needed to smoothly develop Taiwan’s agricultural biotechnology industry. According to a survey conducted by the Development Center for Biotechnology, local biotechnology companies today need assistance from technology, funding, regulation amending, all the way to market development. Of this, accurate and complete information can facilitate the linkage between academia and industry and reduce the gap between R&D and the market as well. It is also a necessary factor for developing global markets and what vendors need the government to help out the most as well. Through the implementation of the “Agricultural Biotechnology Industry Information Survey and Market Potential Research Analysis,” hopefully the government departments, research centers and the industry can obtain valuable information need for policy setting, technology development, knowledge property protection and market development.

III. Development Vision and Objectives

Taiwan is located in the subtropical region, is rich in biological resources and has a solid foundation in traditional planting and farming. Based on these subjective conditions, Taiwan’s form of agricultural is in need of transition. The development of Taiwan’s agricultural biotechnology will have a vision of “enforcing Taiwan’s agricultural biotechnology foundation, build up Taiwan to become the world’s important research, production, and service country for the subtropical biotechnology industry.” Solid objectives include:

(1) Improve the level of technology, assist the transition of traditional farming, reduce production costs, and increase product’s value to achieve the objective of helping farmers.

(2) Expand the application scope of agricultural activities, promote to high value added fields such as medicine, food, and environmental protection to increase productivity of agricultural activities.

(3) Promote organic, fine production, create sustainable agriculture, reduce environmental pollution, protect the ecology, and enhance the benefits of society.

IV. Development Strategy

Based on analysis of the overall development vision, objectives, current status of the industry, the existing foundation, and global competition, the development strategy of Taiwan’s biotechnology industry is:

(1) Choose plant sprouts, aquaculture farming, animal antibiotics, functional food polypeptide, biotech fertilizer, and biotech pesticides will be the initial focus of development. On one hand, to accelerate the pace of transforming traditional farming, on the other hand, to accumulate technical know how and talent in the field of new applications.

(2) Aggressively create an agricultural biotechnology information system and certification management system, amend current regulations and adjust administrative operations. In addition, develop an agricultural biotechnology industry science project to create a healthy industry development environment and gradually build a new agricultural biotechnology industry.