Abstract
There is an increasing consensus in Taiwan that for agricultural development and policy planning the traditional production-based agriculture perspective should be replaced with a value chain perspective. Accordingly, when considering the value-added contribution of Taiwan’s agricultural sector, its relation-ship with upstream, midstream and downstream sectors should be considered and estimated altogether. In this study, we use the demand-side input-output (IO) methodology to compute and analyze the value-added and linkage effects of Taiwan’s agricultural sector. We found that if all the contribution along the value chain is considered, agriculture sector accounts for approximately between 10.56% and 11.85% of GDP, which is a sevenfold increase compared to contribution based on its mere production value (i.e., 1.65% - 1.87% of GDP). This study recommends that future agricultural policy planning, in addition to focusing only on the primary production agriculture, should also include the distribution sector and food and beverage services sector, such as regulations for e-commerce sales channels for agricultural products, food hygiene regulations for the food and beverage industry, and cold chain logistics regulations for agricultural products.
Highlights
( ) multiplied by the domestic IO table I − AD −1 domestic inter-industry interdependence coefficients matrix for 2011 and 2016, respectively, to obtain the output created by Taiwan’s agriculture and related industries. This vector is multiplied by the value-added rate of the industry in the year to get the effect of AFS on the value added of agriculture and related industries
By using the broad definition of AFS agriculture, the upstream and downstream related industries are taken into account, and both direct and indirect effects, which comprise the actual impact of agriculture on the overall economy, are fully captured
The results show that if we look at the agricultural production, the impact on the overall economy is about 1.8% only, and if we consider the upstream factor inputs driven by agriculture, such as pesticides and fertilizers, as well as the downstream food and beverage services, and wholesale and retail, it will reach about 11%
Summary
Of major interest is the analysis of the relationships between agriculture and other economic sectors during the economic development, the use of resources (land, labor, capital) and the influence of institutional and technological factors in the long-run performance of agricultural sector For this important issue, Pinilla and Willebald (2018) provide a general overview of the process of agricultural transformations and their interaction with the rest of the economy. The contribution of agriculture to the overall economy has declined in terms of production, the non-economic function of agriculture is increasingly important, such as ensuring food security, providing green landscapes and promoting ecological balance It is irreplaceable for other sectors, and the importance of agriculture cannot be measured solely by its production value only. With rapid urbanization and globalization, the traditional perspective on production agriculture may need to be extended into food supply (value) chain perspective
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