Abstract Within the credit departments of farmers’ associations in Taiwan, there exist innate weaknesses and contradictory characteristics. These difficulties along with changes in circumstances have resulted in management difficulties within and long-term abuse of the credit departments of farmers’ associations. Although the enforcement of the Agricultural Finance Act of 2003 secured the establishment of credit departments, the problems mentioned above persist. The purpose of my research is to explore these problems and suggest how credit departments should manage themselves and how the government should exercise efficient supervision. My thesis comprises four parts. Firstly, I examine the proper characterization of the credit departments so as to determine the application of laws and design of reform measures. Secondly, I analyze the main regulations in the Agricultural Finance Act of 2003 and propose approaches to support their implementation. In the third part, I address issues of legal concurrence between the Agricultural Finance Act of 2003 and other relevant laws and present resolutions. Finally, I review Taiwan’s failing credit departments from the perspective of comparative law, examining practical cases and court verdicts. By doing this, I construct an alternative optimal handling mechanism. There is long-standing abuse of the credit departments of farmers’ associations in Taiwan. This thesis aims to propose practical solutions for the problems.