Progress of "30 By 30" Food Production Goal Given Recent Farm Closures

Mr Speaker, Sir, my response to Mr Melvin Yong's Parliamentary Question (PQ) will also address related "30 by 30" PQs filed by Mr Dennis Tan, Mr Don Wee, Ms Hazel Poa and Mr Zhulkarnain Abdul Rahim.

Last month, my Ministry responded to PQs by several Members regarding the "30 by 30" vision. As the PQs for this Sitting are related, let me first provide a brief recap.

Since its formation, the Singapore Food Agency (SFA) has been undertaking efforts to grow our local agri-food sector, alongside import source diversification and stockpiling. Local production adds to Singapore's food security by helping to buffer the impact of supply disruptions.

The "30 by 30" vision was conceived in 2019 as an ambitious aspiration of building the capacity and capability to locally produce 30% of our nutritional needs by 2030. At that time, there was strong investor interest in the global agri-food sector, a low interest rate environment and lower global energy prices. Since then, the business climate has become less favourable due to factors such as the COVID-19 pandemic, geopolitical tensions and inflation. Ms Hazel Poa asked about the impact of rising business costs on the farming sector.

During the COVID-19 pandemic and initial phase of reopening, our farms faced a shortage of foreign workers and construction delays. Since then, in the post-pandemic period, inflation and energy price hikes exacerbated by geopolitical tensions, as well as a more challenging financial environment, have added to their challenges.

Some farms have taken a pause in development works to re-evaluate and fine-tune their business models. Global agri-tech companies have also not been spared from these headwinds. That said, while there have been some farm closures, we are also seeing existing players looking to expand their operations as well as new players entering the agri-food sector. So, overall, the total number of land- and sea-based farms have remained relatively stable at about 250 since 2019.

Given the nascency of our agri-food sector and the challenging environment, SFA has provided our farms with support in various areas, including availing land and infrastructure for farming, improving energy efficiency and productivity, and increasing demand offtake for their produce.

First, we are making land and infrastructure available for farming by regularly launching land and sea space tenders. In 2022, we also introduced the option for the typical 20-year land lease and sea space leases to be extended for a further 10 years to give more certainty to farms when planning and seeking investors. To Mr Don Wee’s question, we will continue to press on with the Lim Chu Kang Masterplan and co-develop the Singapore Aquaculture Plan with our stakeholders, including other Government agencies, nature groups, academics, industry players and offtakers.

Second, we have increased support to farms to improve their energy efficiency and productivity so as to reduce their cost and to increase revenue. To Mr Dennis Tan’s query on how the Government will assist businesses in coping with business cost challenges, SFA ensures that the Agri-Food Cluster Transformation (ACT) Fund remains relevant in meeting farms’ business and growth needs. In 2022, the ACT Fund was enhanced to extend the higher co-funding quantum of 70%, or up to $6 million per project, to a wider range of food types, such as fruited vegetables, mushrooms and shrimps, allowing more farms to benefit from this higher co-funding. The ACT Fund encourages our farms to invest in productive and resource-efficient technologies that can help to manage resource use and, consequently, operating costs. In 2023, SFA introduced the Energy Efficiency Programme (EEP) under the ACT Fund to co-fund energy efficiency audits and the adoption of energy-efficient equipment and technologies to help our farms better manage their energy costs for the longer term.

Ms Hazel Poa asked about the Government’s support for traditional open style agriculture. Given the reality of our limited land, manpower and natural resources, farms that adopt more productive, climate-resilient and resource-efficient farming methods have greater commercial viability potential. Regardless, SFA assesses all farm applications for the ACT Fund and considers the merits of each case, each and every proposal on its own merit, and its ability to contribute to our food security.

Third, we are working to increase demand for local produce. SFA is supporting the industry through the Singapore Agro-Food Enterprises Federation Limited (SAFEF). SAFEF has taken on the role of an industry level supply and demand aggregator that partners farmers, traders and food processing companies to better match demand and supply. Through the efforts of SAFEF and its partners, locally grown vegetables and fish are now sold under the brand names “The Straits Fish” and “The SG Farmers’ Market”, respectively, at FairPrice supermarkets under a six-month trial. And, in fact, consumer response to these products have been encouraging.

So, consumers, too, can play a role in strengthening our national food security. They can choose to purchase local produce which can be easily recognised by the red “SG Fresh Produce” logo or dine at food establishments using local produce under the Farm-to-Table Recognition Programme. Together, we can continue to safeguard Singapore’s food security.

Members have also asked about the progress for “30 by 30” and if we remain on track despite the recent news on farm closures. To Mr Zhulkarnain’s question on the reasons for the farm closures, let me explain that these are commercial decisions that are farm-specific in nature. And as with any nascent sector, our agri-food sector will need time to grow and prove their business models.

The “30 by 30” vision has always been an aspiration, which seeks to rally our collective efforts around the important task of enhancing Singapore’s food security. As my Ministry shared in our reply to Parliamentary Questions on this matter last month, we have achieved some results in a few areas. For example, our local egg production now contributes more than 30% of local consumption, an increase from 26% in 2019. Local beansprout production has also come in at more than 50% of local consumption. So, the progress is expected to be uneven. Some sectors will move ahead faster and closer to our aspirations, some will still need some collective efforts from all of us. We have seen both new and existing farms harnessing technology and innovation to scale up production and operate productive, viable models. Some have expanded their operations to higher value products that better cater to consumers’ evolving demands. I want to assure Members that SFA will continue to anchor more of such farms and help them to scale up over time.

Sir, I thank the Senior Minister of State for his reply. I would like to first acknowledge the good work of the Ministry of Sustainability and the Environment (MSE) and SFA in recent years to incubate and also grow our local farms. As consumers, we must support locally grown produce so that our local agriculture sector can flourish and also act as a buffer when food supply disruptions happen periodically. I have two supplementary questions for the Senior Minister of State.

First, I would like to ask for an update on the utilisation rate of the $60 million ACT fund, which the Senior Minister of State has mentioned, and whether the Ministry could consider extending the use of this grant to offset high operating expenses, such as the rising electricity costs.

Second, the survivability of our local farms hinges on a predictable and consistent demand as this impacts their cash flow. So, I am very glad to hear that the National Environment Agency and SFA have partnered associations, such as SAFEF, to create a demand aggregator. My question is: can this collaboration be extended to supply a collective pool of local produce to our local hawkers? We can work through the hawker associations. This can result in a win-win outcome where farmers get more certainty in demand and our local hawkers get fresh quality local ingredients.

Sir, I thank the Member for his supplementary questions. On the utilisation of the ACT fund and what is the extent of the projects being funded, as of 30 April this year, SFA has awarded $25.7 million to 42 companies under 68 awarded projects. So, there are still available funds for companies that want to tap into this fund to expand their businesses, adopt technologies and to use it for energy efficiency purposes.

As I said in my main reply, we did enhance this fund with the energy efficiency programme so that farms can tap on this fund to do energy audits, look at their current operations and see if there are equipment or processes that could be altered, so that they can adopt more energy-efficient measures. It could involve things like changing the type of LED lights so that it is more energy-efficient. It could include things like adopting solar panels so that you can get some more renewable energy sources that could well be cheaper than energy from the grid. These are measures that farms can adopt to defray some of their operating energy costs.

But to directly offset operating expenses, that will be something quite challenging because it could well end up having the perverse effect of paying for inefficient players to offset their costs to the detriment of taxpayers' money as well. So, we want to fund them so that whatever they do, has durability and sustainability for the longer term and fundamentally changes the way the company operates for a more sustainable future.

On whether demand aggregation can work with hawkers, I think SAFEF and the farms are prepared to explore. But it is not a straightforward issue of trying to ask the hawkers to buy from the aggregator because many of these hawkers and businesses have already established relationships with specific suppliers, and it is probably not so easy for them to change this kind of relationship overnight. But if there are particular hawker associations, particular groups of hawkers in a particular locality, who are keen to come together to do some group buying, I think SAFEF will be prepared to work with them and discuss longer-term contracting models where there is more constancy of supply with good quality and there is also better demand for the farmers themselves. So, if there are hawker associations who are keen, do get in touch with SFA or SAFEF directly.

Speaker, I have a supplementary question for the Senior Minister of State. As we go for more resource- and energy-efficient models of agri-tech production, would the Ministry consider taking a more active stand, beyond just grants, to look at areas of R&D, scaling and commercialisation? What I meant by that is, for example, actively curating technologies that may be functional and would work to enable the success, and introduce it to the different businesses so that we have a higher chance of getting this programme on the road.

Sir, I thank the Member for her question. Indeed, the ACT Fund actually does both. The ACT Fund also has a technology adoption component that allows farms to adopt technology that has already some degree of curation by the expert panels, so that these are easier to adopt as they are technologies that have some degree of proven record. The ACT fund also allows innovation to take place at the farm level, if they want to try a new innovation based on current base technology to unlock new potential. So, the ACT fund already allows farms to adopt it to do both the things that the Member has asked for.