The Value-Added and Linkage Effect Analysis of Taiwan’s Agricultural Sector

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.