Tuesday, 12 April 2016


Chen Wei-han reports in today's Taipei Times...
"Residents from Kaohsiung’s Lujhu (路竹) and Hunei (湖內) districts rallied against a proposal by Chen Nan Iron Wire Co — the parent company and supplier of a fastener company participating in the exhibition — to build an iron wire and screw factory in Hunei, as effluent produced by the factory could affect agriculture."
I am familiar with the area described, having worked in both districts and driven back and forth through them en route to either Tainan or Kaohsiung countless times. It shouldn't be too difficult for me to find the exact site that is the subject of these protests and go and take a look for myself. The first thing I will check is this claim...
"The proposed factory site, a farm owned by state-run Taiwan Sugar Corp at the border of Hunei and Lujhu, is surrounded by large areas of tomato and broccoli farmland."
I already knew there were tomato growers in Hunei, but I didn't know there were broccoli farmers there too. Is the site actually "surrounded" by these farms, or are there just one or two of them nearby? I don't know because I haven't checked it yet and I am not comfortable with taking things on trust from the Taipei Times as so many of their staff are likely extreme environmental activists themselves.

In any case it seems, prima facie, to be a classic textbook case of externalities for which there are a minimum of three solutions. Possibly the easiest one, and the one that entails the least government involvement, is for the factory owners to get an independent estimate of the costs imposed on the farmers and then offer to pay them off, but that assumes (a) that accurate and unbiased estimates of a value can be made which all parties can agree to and (b) that the factory owners can afford to pay them off. A few tomatoes might not sound like much, but I can't pretend to know what the actual cost would be. Another solution is for the factory owners to pay the costs of cleaning up their effluent so as to eliminate or reduce the pollution. This may be done either voluntarily (e.g. it might be cheaper than paying off the farmers), or it could be done via government regulations to be imposed on the factory owners with the threat of financial sanctions. A third option involves far greater government involvement and a systematic violation of property rights via the use of actual central planning to locate factories downstream from farmland.

Of those three solutions, can you perhaps guess which solution the Taipei Times' quoted activist prefers?
"...“Agriculture is an industry as much as the fastener industry is. The city government should have a comprehensive plan to develop different industries in appropriate locations and screw factories should be placed in industrial parks away from farmland,” resident Yang Kuo-hua (楊國華) said." 
Did you guess right? No surprises: the commie solution of total government discretion as to who can do what where. The only question is how representative or not this guy Yang is. Is he actually a "resident" or a parachuted-in environmental activist that Chen Wei-han just happened to ask?
“The city government is contradicting its own agricultural land solely for agricultural use policy by allowing farmland to be converted into a factory,” Yang said."
Since I know the area already, I can point out a problem with this statement: there are already lots of factories in the area surrounded by farmland, and indeed this is not just true of Hunei and Lujhu districts - but of almost all the districts between Tainan city proper and Kaohsiung city proper. Moreover, there are screw factories in Alian district just down the road which are adjacent to farmland (I know because they lie on my preferred back-roads route to Agongdian reservoir). So there is reason to think this isn't anything new.

However, there is a larger context to this story. Cases like this will always be used by environmental activists and various "reconstructed" middle-class communists to push for prohibition by means of government central planning. Instead of screw factories, they would prefer tomato farms. That there is an enormous difference in market value between the two either doesn't occur to them, or is seen as a social evil. If these people are not exposed and ridiculed for the jumped up, deformed Trotskyites that they are, then they will continue to push for so-called "green policies" which will, in effect, be a euphemism for the gradual destruction of wealth and industrial manufacturing in Taiwan.

No comments:

Post a Comment

Comment moderation is now in place, as of April 2012. Rules:

1) Be aware that your right to say what you want is circumscribed by my right of ownership here.

2) Make your comments relevant to the post to which they are attached.

3) Be careful what you presume: always be prepared to evince your point with logic and/or facts.

4) Do not transgress Blogger's rules regarding content, i.e. do not express hatred for other people on account of their ethnicity, age, gender, sexual orientation or nationality.

5) Remember that only the best are prepared to concede, and only the worst are prepared to smear.