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Green thumbs up for AVA's release of new agriculture land

Fixed price method will see farmers compete purely on tender proposal as land price is already fixed
Friday, May 12, 2017 - 05:50

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Farmers on Thursday welcomed news that new agriculture land for food farming in Lim Chu Kang and Sungei Tengah will be released for tender from August this year.

Singapore

FARMERS on Thursday welcomed news that new agriculture land for food farming in Lim Chu Kang and Sungei Tengah will be released for tender from August this year.

These will be the first tenders in about two decades, and come at a time when the leases of many existing farms are due in a few more years.

To urge farmers to raise their productivity, these tenders will adopt new land tender methods that emphasise more on productivity gains, rather than land price alone.

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For leafy vegetables, fish, beansprouts and quail eggs farming, the new farm land will be tendered using a fixed price method - the land price is already fixed - taking guidance from the chief valuer's valuation, and farmers will compete purely on their tender proposal.

For other general agriculture food farms, it will use a concept and price method, where tenderers who meet the criteria are shortlisted and the tender would be awarded to the shortlisted tenderer with the highest price.

In a media briefing, Agri-Food and Veterinary Authority (AVA) CEO Tan Poh Hong said: "Local production will continue to remain an important part of our food security agenda because it provides us with a buffer in times of global supply disruptions.

"But what is needed is a transformation in this sector, so that the strategy to be a buffer can be meaningful. The government is working closely with the farming sector to achieve this, but farmers must play their part, they must be willing to step up and embrace technology."

Singapore still imports most of its food. Last year, locally-farmed vegetables, eggs and fish contributed to only 12 per cent, 24 per cent and 10 per cent of Singaporeans' consumption, respectively.

Meanwhile, even as agricultural land takes up less than 1 per cent of Singapore's total land area, it still has to jostle with many other competing land uses. The government is thus urging farmers to maximise land, on top of labour and productivity.

A total of 36 plots of farm land spanning 60 hectares will be tendered out in the next few years in tranches (see table). The plots will be tendered on 20-year leases instead of the previous 10-year blocks.

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AVA recognises that some farmers may not be familiar with putting up tender proposals based on concepts, as farm land tenders have traditionally been based just on price, so it will conduct advisory sessions on the drafting of tender proposals before every tender launch. Some criteria farming companies will be assessed on include their production capability, track record, relevant experience and qualification, as well as ability to use innovation to improve and sustain production and maintain business viability.

Farmers told The Business Times they gave the idea of the fixed price tender method their thumbs-up.

Group CEO of food fish farm Apollo Aquaculture Group, Eric Ng, said there have been construction firms that outbid farmers for farm land and use them for illegal landfill and dumping purposes, depriving farmers of production grounds. So this tender method will prevent that occurence.

He also thinks that the tender method will ease farmers' concerns about competition from foreign companies with deeper pockets, because all the parties will compete only on skills and know-how.

Apollo has built a three-storey indoor vertical fish farm to house eight to 10 times more fish, thus optimising land use. It also uses high-tech water treatment which circulates water in self-contained systems that clean it more efficiently.

But speaking on the industry, Mr Ng said the biggest impediment to adoption of technology, besides the cost outlay, is likely the age of many of the farmers. Many are close to retirement age, with no certainty of a successor for their businesses.

"I think they will need the assurance that they can make a better return if they reinvest their profits from all the years of business into new technology. If they have to go through the entire risk-taking process again, at their age, they will want to reconsider."

Another farmer, owner of Eden Garden Farm, Desmond Khoo, is planning to participate in the August tender as the lease for his Lim Chu Kang premise will expire in 2019. He has held back from investing in more advanced technology for his existing farm in view of the looming lease expiry, but has recently set up Purelyfresh.com.sg, an online wet market with home delivery service.

He said: "Younger-generation farmers like me, we are ready to embrace new technology and we are constantly adapting to the local environment. If you talk about more traditional and older farmers, you probably need to spend time persuading them."

Singapore's productivity drive is already in place across sectors. For industrial land, for instance, JTC requires end-users to agree to boosting their land and labour productivity before extending their leases. Residential land tenders have also begun to include requirements for developers to use more productive building methods.

READ MORE: Can technology-enabled urban farms be a winner for S'pore?

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