Recent Closures of High-tech Farming Companies and Impact on "30 by 30" Plan for Local Food Production

Mr Chua Kheng Wee Louis asked the Minister for Sustainability and the Environment (a) whether the Government remains committed to the “30 by 30” goal that aims to produce 30% of Singapore’s nutritional needs by 2030 locally; and (b) whether there are plans to (i) further boost local demand for locally produced food and (ii) address the price differential between locally produced food and imported food in order to promote the market viability of domestic food production.

This response will also address the written Parliamentary Questions filed by Ms Hany Soh for Parliament Sitting on 2 July 2024. [Please refer to "Progress of '30 by 30' Goal and Grant Funding Disbursed", Official Report, 2 July 2024, Vol 95, Issue 137, Written Answers to Questions section.]

Since its formation, the Singapore Food Agency (SFA) has been stepping up efforts to grow our local agri-food sector, alongside our efforts in import source diversification and stockpiling. Local production can help to buffer any impact of supply disruptions and add to Singapore’s food security. We set “30 by 30’’ as an ambitious vision of building the capability and capacity to locally produce 30% of our nutritional needs by 2030.

When the “30 by 30” vision was first conceived in 2019, 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. Some farms have taken a pause in development works to re-evaluate and finetune their business models. Global agri-tech companies have also not been spared from similar headwinds. That said, while there have been farm closures, we are also seeing new players enter the agri-food sector. Overall, the total number of land- and sea-based farms has 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 (a) accessing land and infrastructure for farming, (b) improving energy efficiency and productivity, and (c) increasing demand offtake for their produce. Let me elaborate.

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- and sea-space leases to be extended for a further 10 years to give more certainty to farms when planning and seeking investors.

Second, we have increased support to farms for energy efficiency and productivity transformation. 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, to a wider range of food types, such as fruited vegetables, mushrooms and shrimps, allowing more farms to benefit from higher co-funding. The ACT Fund encourages 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 farms better manage their electricity costs. As of 30 April 2024, SFA has awarded $25.7 million to support 68 projects under the ACT Fund.

To ensure funds are used effectively, the grant is allocated only after considering the farms’ financial statements, key personnel involved in farming, relevant track record, the merits and reasonableness of the project proposal, projected costs and whether the outcome supports Singapore’s food security. SFA requires funding recipients to meet key performance indicators (KPIs) in areas, such as production output, energy and manpower savings. Farms are also required to submit half-yearly progress reports to document progress in the project. The funds are disbursed through reimbursement and in tranches, ensuring that project milestones are achieved before additional funds are released.

Third, we are also working to increase demand for local produce. The price of food reflects a combination of factors. Aside from costs of production, higher prices may also reflect better quality and value, such as freshness or being pesticide-free, which are value-added attributes that consumers might be willing to pay for.

SFA is supporting the industry through the Singapore Agro-Food Enterprises Federation Limited (SAFEF), which has spearheaded the formation 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 at Fairprice supermarkets under a six-month trial under the brand names “The Straits Fish” and “The SG Farmers’ Market”. I am heartened to hear that consumer response to the products has been positive.

Consumers can play a part in ensuring our national food resiliency by choosing to purchase local produce that are labelled with the red SG Fresh Produce logo, or dining at food businesses under the Farm-to-Table Recognition Programme which recognises food businesses that feature local produce on their menus. Together, we can continue to safeguard Singapore’s food security.

The “30 by 30” vision has always been an aspiration, which seeks to rally our efforts around the important task of enhancing Singapore’s food security. We have achieved some results in a few areas. For example, our local egg production now contributes more than 30% of local consumption from 26% in 2019. Local beansprout production has also come in at more than 50% of consumption. We have also 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. SFA will continue to anchor more of such farms and help them scale up over time.