Review of Implementation of Taiwan’s New Southbound Policy for Agriculture

Review of Implementation of Taiwan’s New Southbound Policy for Agriculture

Published: 2022.04.26
Accepted: 2022.04.26
Deputy Secretary General
National Leadership Council Indonesian Farmers Union (HKTI)
Indonesian Agricultural Researcher’s Alliance (APPERTANI)
Distinguished Professor
Department of Forestry, National Chung Hsing University, Taiwan


In 2016, Taiwan’s new government of President Tsai proposed a “New Southbound Policy” (NSP) for the country’s diplomatic strategic planning to maintain long-term positive relations with the ASEAN and South Asian countries. The basic principles of Taiwan in promoting the NSP are longstanding, non-political and effective. The longstanding relationship between Taiwan and the ASEAN countries stands in the primary field of economics, humanities, culture and social relations. Taiwan's NSP could be the most feasible policy for Taiwan to present its value and identity to international participation. The policy is concealed in Southeast Asia because ASEAN regulators generally avoid distress with Beijing, China Mainland. Thus, to improve Taiwan's NSP application, the cooperative agriculture projects with Taiwan are typically known as humanity and economics mutual relationships. Their strategic roles could balance the economic and political influence of China's expansionism in Southeast Asia. Taiwan's New Southbound Policy missions are to develop mutually beneficial and win-win relations with Indo-Pacific countries. Ensuring food security and good health all point to strengthening the humanities. Food and agriculture in Indonesia are not only about nutrition fulfillment or poverty alleviation; it also about the connection between and among countries. Among countries in the ASEAN region, Indonesia is one of the most strategic countries to develop the implementation of the New Southbound Policy in agriculture. Besides the review of NSP, this paper also describes the practice of the Taiwan government's performance in the field of agriculture.

Keywords: New Southbound Policy, agriculture, investment, Taiwan



On 5 September 2016, the government of Taiwan officially launched the “New Southbound Policy”. The objectives of this policy were to enhance cooperation and exchanges between Taiwan and 18 countries in Southeast Asia, South Asia, and Australasia. Indonesia was one among other countries, i.e., Vietnam, Cambodia, Lao PDR, Thailand, Myanmar, Malaysia, Singapore, the Philippines, Brunei Darussalam, Pakistan, India, Nepal, Bhutan, Bangladesh, Sri Lanka, Australia, and New Zealand (Figure 1).  

The New Southbound Policy is an integral part of Taiwan’s economic and trade strategy. As an essential member of the Asia and Asia-Pacific region, Taiwan must respond to the changing global conditions and trends towards regional unification by making appropriate adjustments. The New Southbound Policy has been adopted to identify new directions and driving forces in the new stage of Taiwan’s economic development, redefine Taiwan’s important role in Asia’s development, and create future value. At the same time, through this policy, Taiwan’s government hopes to initiate more comprehensive dialogue and negotiations with ASEAN and South Asian countries, as well as Australia and New Zealand to build close cooperation and jointly achieve regional development and prosperity. Hence, this policy has critical goals and objectives, as presented in Table 1.

The New Southbound Policy is an integral part of Taiwan’s economic and trade strategy. As an essential member of the Asia and Asia-Pacific region, Taiwan must respond to the changing global conditions and trends towards regional unification by making appropriate adjustments. The New Southbound Policy has been adopted to identify new directions and driving forces in the new stage of Taiwan’s economic development, redefine Taiwan’s important role in Asia’s development, and create future value. At the same time, through this policy, Taiwan’s government hopes to initiate more comprehensive dialogue and negotiations with ASEAN and South Asian countries, as well as Australia and New Zealand to build close cooperation and jointly achieve regional development and prosperity. Hence, this policy has critical goals and objectives, as presented in Table 1.

One of the New Southbound Policy flagship programs is Regional Agricultural Development. This program includes four significant objectives (GoT, 2016). First,           enhance agricultural cooperation with New Southbound Policy partner countries and promote the export of Taiwan’s agricultural materials, production supplies, and technologies. Second, strengthen agricultural, human resources and bilateral technical exchanges, thus nurturing cross-border agricultural, human resources. Third, reinforce bilateral agricultural trade and investment relationships, and encourage (overseas) Taiwanese businesses to invest in agricultural industries in New Southbound Policy partner countries. Fourth, improve the regional food security by facilitating the establishment of crucial production bases.


Based on the background mentioned above, this article aims to review the New Southbound Policy for agriculture. It comprises the following sections: (1) New Southbound Policy Framework; (2) Development Program/Projects of Taiwan in Indonesia; (3) New Southbound Policy Implementation in Indonesia; and (4) Conclusion and Policy Implication.  


The framework of the New Southbound Policy can be illustrated in Figure 1. It consists of four pillars, five flagship projects, and three innovative fields as follows:

  1. Four pillars include: (1) Promote economic collaboration (cooperate with partner countries on supply chains, market demand, and infrastructure projects; (2) Conduct people-to-people exchanges (deepen bilateral exchanges through the cultivation of scholars, students, and industry professionals); (3)          Enhance resource sharing (promote bilateral and multilateral cooperation in culture, tourism, medical care, technology, agriculture, and small and medium-sized enterprises); and (4) Forge regional links (systematize bilateral and multilateral cooperation with partner countries while strengthening dialogues and negotiations.
  2. Five flagship programs comprise of the following: (1) Agricultural development; (2)     Medical/public health cooperation; (3) Talent cultivation; (4) Innovative industries; and (5)         Youth exchanges and policy forums.
  3. Three innovative fields consisting of: (1) E-commerce, (2) Infrastructure, and (3) Tourism.

Agriculture is one of the five flagships implicitly related to the four pillars and the innovative fields of the New Southbound Policy. This policy provides technology assistance and increases business exchanges with partner countries through increased cooperation and innovation between Taiwan and partner countries. In the case of Indonesia, Taiwan has set up a partnership with the Indonesian Ministry of Agriculture.

The implementation principles of the New Southbound Policy is summarized in Table 2. It involves certain aspects of capacity, innovation, strategy, investment, cooperation, and organization.

Table 2. The implementation principles of the New Southbound Policy

Implementation principle



Establish long-term results, strengthen the “sense of economic community” by increasing capacity and overcoming various difficulties and bottlenecks


Determine the future role of Taiwan in regional development based on the new model as a core element of work, innovation, and equity through roles as innovator, sharer, and provider of services


  • Link countries by promoting bilateral and multilateral cooperation. Taiwan was setting soft power as a core aspect of the strategy
  • Strengthen information and communication technology (ICT), domestic industry, energy and petrochemicals, new agriculture, and financial services within supply chains
  • Connect regional markets through increasing investments and two-way trade, promote closer economic cooperation, and regulatory adjustments
  • Relate and link among communities (people-to-people) as a catalyst in intercultural exchange and integration through the use of tourism and cultural resources


Foster more people with the skills needed to support the “New Southbound Policy” through the investment of resources


Achieve institutionalized bilateral and multilateral cooperation related to the momentum of the Trans-Pacific Partnership (TPP) in addition to the Regional Comprehensive Economic Partnership (RCEP)


Set up comprehensive actions on coordinated measures and effective risk control, including deregulation that ensures the free movement of people, goods, and money, provision of convenient financing channels, technical support, and comprehensive information implementing serious risk management, and fully aware of the possible political and economic risks associated with the New Southbound Policy by taking into account local political realities and conditions of expatriate communities, establishing early warning and emergency response mechanisms for significant events to control risks effectively.


Participate in international cooperation besides building strategic alliances with friendly countries and jointly building relations with ASEAN and South Asian countries

Dialogue and negotiation

Promote comprehensive dialogue and dialogue mechanisms to remove barriers rooted in systems and policies


Interact and cooperate with good intentions through dialogue and mutually reinforcing negotiations with related parties


Generate good use of the existence of private organizations and the vitality of private organizations such as academic, research, religious, cultural, artistic, industrial, and commercial groups and associations of Taiwanese investment companies and NGOs.

Source: TETO, 2016 and GoT, 2017

Figure 2 shows the five flagships of NSP Taiwan's education, medical services, agriculture, science & technology, and other soft-power elements that have tremendous comparative advantage and attractiveness for the ASEAN and South Asian countries. When facing further deepening of bilateral relations between Taiwan and these countries, the Taiwan authorities can use these advantages to promote cooperation and exchanges with the countries of the region under a mutually beneficial and win-win policy.

The implementation framework of the New Southbound Policy includes three aspects. First, the adoption of policy guidelines for the President's Office, National Security Council, Executive Yuan, and relevant cabinet bodies carries out the required responsibilities, including flagship programs in different fields and relevant work with clear plans, procedures, and priorities. Second, the establishment of mechanisms for elected officials and the local government to conduct the policy implementation. Third, initiation and full implementation of the “New Southbound Policy” through helping support the legislature and participation of the local government to the central government, which develop cooperation and progressive work mechanism.  


The Council of Agriculture (COA) is actively implementing relevant New Southbound Policy initiatives based on mutual assistance for mutual benefit, shared agricultural prosperity and sustainable development, and win-win solutions for Taiwan and New Southbound Policy partner countries. The COA has defined four main objectives under which Taiwan will aim to foster regional agricultural prosperity and strengthen its ties with New Southbound Policy partner countries by combining resources and strengths. These four primary policy objectives are:

  1. To enhance agricultural cooperation with New Southbound Policy partner countries and promote the export of Taiwan’s agricultural materials, machinery, and technologies to these countries;
  2. To strengthen bilateral exchanges in agricultural, human resources and technologies as well as to nurture the cross-border development of agricultural and human resources;
  3. To strengthen bilateral agricultural trade and investment and to encourage Taiwanese businesses (as well as those owned by overseas Taiwanese) to invest in the agricultural sectors of New Southbound Policy partner countries; and
  4. To implement New Southbound Policy in agriculture and establish food production zones to safeguard regional food security between partner countries.


Agricultural program/project(s)

Since 1976, Taiwan and ASEAN countries, mainly Indonesia have had a cooperation agreement in agriculture (TETO, 2017). It includes: (1) The signing of a technical cooperation agreement between Taiwan and Indonesia in the field of agriculture. Since then, Taiwan has been dispatching a technical mission to East Java and Central Java (1976); (2) The signing of Memorandum of Understanding (MoU) in the field of agriculture, in 1996, Taiwan sent a technical mission to West Java (1995); (3) Taiwan and Indonesia signed a technical cooperation agreement in the field of agriculture (2006); (4) The signing of the MoU of “One Village One Product (OVOP)” and then Taiwan Technical Mission established two work stations in Bali (2010); and (5) Taiwan and Indonesia signed a cooperation agreement in the field of agriculture (2016).

For more than 40years the Taiwan government has sent agricultural technical teams to Indonesia to help farmers develop and improve their products. There are several collaborative programs between Taiwan and Indonesia, including the One Village One Product, Agribusiness Development Center (ADC) “University Farm,” Corporate Agriculture Development and Improvement, Rice Superior Variety Development, and Agricultural Pilot Area Cooperation (, 2019).

One village, one product (OVOP)

The OVOP program/project was implemented in Bangli and Badung regencies from 2011 to 2015. This project was carried out by collaborating agencies of the Taiwan Technical Mission (TTM) in Indonesia, the Indonesian Ministry of Agriculture (MoA), and the Indonesian Ministry of Cooperatives and Small and Medium Enterprises (MSMEs).

Agribusiness Development Center (ADC) “University Farm”

The Taiwan Technical Mission, in collaboration with Bogor Agricultural University (IPB), carried out the program/project of ADC "University Farm" at Cikarawang Village, Bogor (West Java), from 2007 to 2013. The objective of this program/project was generally to improve the quality of Indonesian farmers' resources to penetrate local and international markets. The University Farm was established in 10 hectares of land of IPB, of which about a third was used for facilities such as offices, parking areas, cafeterias, and other buildings, and the rest for agricultural land. The facilities and experts were derived from IPB, while the Taiwanese provided funds of around US$300,000 for physical development.

Corporate Agriculture Development and Improvement

Starting in 2015, the Taiwan Technical Mission (TTM) and the Institute of Agricultural Training Agency (BBPP) established a collaboration program/project, "Strengthening Incubator Agribusiness with Human Resources Development and Optimization of Horticultural Production for Farmers," through Lembang Agribusiness Incubation Center in Bandung, West Java ( 2021).

The implementation of this program/project was basically to improve the welfare of farmers. This was implemented to optimize the products and develop the markets through a cooperative institution. Along with training, farmers were provided with information, including a quality grade required by markets-based branding products with reasonable selling prices. The cooperative also facilitates such packing houses and more astounding transportation. Hence, farmers were not only cultivating, harvesting, and marketing the products but also calculating the businesses to be more profitable and sustainable through introducing good quality products to the community while determining the price.

Rice superior variety development

The Taipei Economic and Trade Office (TETO) and the International Cooperation and Development Fund (ICDF) of Taiwan, in collaboration with the Faculty of Agriculture, Hasanuddin University, had completed the establishment of the Greenhouse Prototype for Rice Superior Variety Development at Makassar in 2019.  

This greenhouse prototype is intended as a center for the development of superior rice varieties, which had the advantage of automatically recording the surrounding climate situations, including analyzing the use of fertilizers and the weather that is suitable for nurseries and others. The function of the greenhouse comprises testing the existing varieties, analyzing vulnerable conditions, and enhancing productivity. It is expected that the greenhouse is capable of producing five tons per hectare of rice seeds with a total harvested yield of about 7-8 tons per hectare. It is targeted that the greenhouse prototype will later be established in the seven central rice-producing district areas in South Sulawesi province. Moreover, the greenhouse will develop more sophisticated sizes and technology applications that can produce practical experiments in the future.

Agricultural pilot area cooperation

In 2017, the Government of Indonesia conveyed the idea of cooperating in the utilization of water resource facilities with Taiwan through the Taipei Economic and Trade Office (TETO) in Indonesia. Following several surveys conducted by water resources experts in the country, it was decided to establish the "Taiwan-Indonesian Cooperation in the Integrated Agricultural Area Pilot Project" located in Karawang regency, West Java province (RTI, 2021).

The project consisted of five main programs, namely: (1) utilization of water resources for irrigation systems; (2) increasing the amount of rice production; (3) horticultural production; (4) livestock industry; and (5) farmer organizations; carried out on an area of 1,000 hectares. With the help of Taiwanese experts, small control dams and 42 sluice gates have been completed, with an area relegated to the utilization of water resources facilities reaching 400 hectares.

Review of challenges and opportunities

Indonesia and Taiwan are two entities that do not have official diplomatic relations but maintain durable economic and socio-cultural relations. Though ASEAN more emphasizes with Beijing relationship and Indonesia adheres to the One China Policy principle, this country continues to nurture its relations with Taiwan in economic and socio-cultural aspects (Kabinawa, 2013). The cooperation between the two countries went well, even showing much progress in economy, trade, education, and employment. In agriculture, the Taiwan Technical Mission has been helping Indonesia develop this sector for more than 40 years. As a result, the Indonesian Ministry of Agriculture and farmers of this country have high confidence in Taiwan.

Despite Indonesia's most significant potential for biodiversity, coupled with a wealth of solar energy and good rainfall, the country’s agricultural progress is still facing several challenges. On the one hand, Indonesia has extraordinary natural resources, but on the other hand, the country has a lot of small-scale farmers (Unpad, 2020). The classical problems encountered in Indonesia's agricultural sector start from pre-harvest, harvest and postharvest, including the distribution processes. Table 3 shows the problem case of the agricultural fresh product supply chain in the country.

Apart from technical aspect problems, Indonesia is also facing challenging non-technical issues related to socioeconomic characteristics. According to the Indonesian Central Bureau of Statistics (BPS), as cited by Disbun Jabar (2021), the composition of Indonesia farmers based on age group is currently: (1) 17.29% (less than 30 years old); (2) 29.15% (30-44 years old); (3) 32.39% (45-59 years old); and (4) 21.70% (over 60 years old). In other words, most farmers (54.09%) in Indonesia can be categorized as old workers. Moreover, about 65.23% of farmers have low education, equivalent to elementary school and below.

It is essential to regenerate the old farmers into young farmers. However, the younger generation's interest to become farmers tends to decrease. It is because: (1) there is an assumption that farming is the last choice compared to other types of work, (2) low control of agricultural land due to the inheritance system, which causes farming to be deemed unfit to guarantee the necessities of life; and (3) uncertain income from agricultural products and high risk of production losses. It notes that some old farmers recommend their descendants not to pursue their work as farmers earning fewer promising incomes.

The decreasing number of productive farmers will cause the increasing abandoned land and land conversion to affect environmental problems. Therefore, it is required to develop agriculture with an attractive management system through various innovations, including investments toward strengthening the competitiveness of this sector. In this regard, the New Southbound Policy is strategically implemented in Indonesia, supported by sustainable, strong policies. This is fundamentally in line with the implementation principle of the New Southbound Policy related to the aspects of capacity, innovation, strategy, investments, cooperation, action, participation, dialogue, negotiation, interaction, and organization.

Domestic policy support

There are two essential policy supports related to implementing the New Southbound Policy in Indonesia. They are: (1) Law Number 11/2020 on Job Creation (GoI, 2020); and (2) Regulation of the Indonesian Minister of Agriculture Number 40/2019 on Business Licensing Procedures in the Agricultural Sector (MoA, 2019). 

Law Number 11/2020

The essence of this Law is quite imperative since Indonesia has numerous regulations in which some are not effectively implemented, and others are overlapped. It notes that there are 42,875 regulations comprising of 1,687 Laws, 4,735 Government Regulations, 2,008 Presidential Regulations, 14,722 Ministerial Regulations, 3,758 Non-ministerial Government Institution Regulations, and 15,965 Regional/Local Regulations. Thus, implementing the Law is necessary for addressing public policy conflicts, harmonizing government policies, and assuring legal certainty for policymakers both at the central and local government levels effectively and efficiently (Rafani and Sudaryanto, 2021).

Law Number 11/2020, whose scope is wide-ranging, should help to reduce longstanding impediments to doing business in Indonesia by reducing red tape (conformity to formal standards), simplifying land acquisition processes, easing restrictions on foreign investments, loosening labor laws, and providing more incentives to free-trade zones. The reforms will put Indonesia in a better position to capitalize on global manufacturing supply chains shifts. It improves the ease of doing business in Indonesia. It attracts investments, thereby boosting job opportunities and economic growth since it focuses on streamlining business licenses, making the country more open to foreign investments, and having a more flexible labor market.

Law Number 11/2020 introduces critical amendments to several sectors, including agriculture, particularly concerning business licensing procedures. It covers several aspects of prioritization, importation, foreign investments, land, storage, and sanction. In other words, this Law regulates the sectoral business licensing procedures. It provides convenience for the community, especially business actors, in obtaining business permits from the agricultural sector by altering, abolishing, and setting the new formulation on several provisions stipulated in specific agricultural regulations. They are: (1) the Law Number 39/2014 on Estate Crops; (2) the Law Number 29/2000 on Plant Variety Protection; (3) the Law Number 22/2019 on Sustainable Agricultural Cultivation Systems; (4) the Law Number 19/2013 on Protection and Empowerment of Farmers; (5) the Law Number 13/2010 on Horticulture; and (6) the Law Number 18/2009 on Livestock and Animal Health.

The New Southbound Policy should refer to the existence of Law Number 11/2020 in implementing its activities, including agriculture in Indonesia. This is in line with one of the implementations of this policy, namely supporting the legislature and participation of the local to central government which must develop and coordinate development mechanism establishments.

Regulation of the Indonesian Minister of Agriculture Number 40/2019

Essentially, Regulation Number 40/2019 is one of the initial efforts to drive the ease of doing agricultural businesses in Indonesia. It is implemented by simplifying and streamlining licensing procedures to promote more investments in the agricultural sector in the country. Accordingly, the business licensing procedure in this Regulation includes a registration given to business actors to start and run business activities in the form of approval as outlined in a decree or fulfilment of requirements and commitments (statement of the business actor). Business actors include individual businessmen/women, business entities, legal entities, government agencies, overseas customers, observers, social institutions, representatives of foreign/international institutions, state or local-owned enterprises, farmer's groups, cooperatives, and producers. Those are registered in the Online Single Submission (OSS) system and issued by the OSS institution towards simplifying and streamlining the licensing processes while encouraging investments.

The type and scope of commercial/operational licenses generally comprise of the following: (1) Business licenses; (2) Entry licenses; (3) Entry and exit licenses; (4) Recommendation licenses; (5) Certification licenses; and (6) Registration licenses. Simplifying, streamlining, and promoting agricultural investments through this Regulation is strategically implemented since the country has a large inventory of laws and regulations that are often overlapping and inconsistent, which may deter investors (Rafani and Sudaryanto, 2020).

Concerning the New Southbound Policy, the implementation of the Indonesian Minister of Agriculture Regulation Number 40/2019 can be viewed as a spirit to attract investors to develop the agricultural sector in the country. It is not only to facilitate the improvement of agricultural investments but also to expand its sustainability to support the agricultural development in Indonesia. The more accomplishments in investments, the more job opportunities available and income gained.


Taiwan put its emphasis on constructing authentic and robust relations with other countries, especially countries in South and Southeast Asia region. As the substance of the relationship between Taiwan and these New Southbound Policy member countries becomes solid, political and diplomatic relations are naturally developed. The agricultural sector is the primary key to strengthening Taiwan and other countries' relations based on food security or sovereignty that underlies humanity and equality. For Taiwan, the range of NSP strategies is the ASEAN and South Asia region. Through integration with Indonesia, Taiwan can become the core of the Southeast Asian power in food and agriculture, reaching the great potential of Taiwan besides its vibrant industrial sector.


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