Budget 2017 Speech by MOS Dr Koh: Supporting A Self-Reliant Community And Transforming Our Industries
Mar 8, 2017
Transforming our Local Agricultural Sector
Mr Ong Teng Koon, Mr Darryl David, and Mr Chong Kee Hiong spoke about growing uncertainties in global food supply, and how this might threaten Singapore’s food security. These are valid concerns because at the end of the day we import 90% or more of the food that we consume. We are, to some extent, “vulnerable” in our food supply because we lack natural resources to grow all the food that we will ever need. But we have never passively accepted our fate as it is. Just look at how we deal with our water issues. It is an existential vulnerability, but we have gradually strengthened our water supply through our “Four National Taps”. Our water story has been about transforming adversity into opportunity.
I believe we can do the same with food by embracing technology. We can intensify land use as some Members have suggested, reduce wastage, and increase the yields of our farms. We can transform our small but vibrant farm sector. And as some Members have noted, with global population growth and more extreme weather patterns, it is time for us to think ahead. With global supplies eventually being outstripped by the demand, it is time for us to take more concerted action.
We should envision “Three National Food Baskets”. The first of these baskets is imports from around the world. This is key because we do not have enough land to cultivate all we need. But diversification makes this basket much more resilient, so we will continue our efforts to look for more varied sources of food for import.
The second basket is internationalisation. This opens up new markets and helps our farms overcome land constraints in Singapore. We want to help local farms and food companies venture abroad to seek opportunities. Just last month, I led a delegation of Singaporean agricultural producers to Brunei to explore opportunities. Now Brunei is keen to attract our farmers as a way of diversifying their economy, and for us, we are interested to find alternative sources of food supply and for cultivation of the food that we need as well. We had good bilateral discussions between ourselves, the delegation and the Bruneian officials. Naturally, we hope that some of the food that our farms produce there will eventually be re-exported back to Singapore for our local consumption. We also want some value-added operations to remain in Singapore. Things like R&D, training, development of technology and innovation, we hope that this will continue to remain in the farms in Singapore. But overall, having our local food producers successfully operating overseas will strengthen our food security.
And in fact, some of our Singapore agriculture-specialists have actually done so. With your permission, Sir, may I display some slides.
a) For example, a Singapore–Brunei joint venture company, KR Apollo, whom I did the ground breaking just a short while ago, will transform a 12-hectare site in Brunei into a high-tech vertical fish farm – the very first in Brunei. The yield is expected to eventually reach 5,000 tonnes a year. That is not a small number. That number alone would approximate the annual total output from all the fish farms in Singapore, just from this one farm.
b) Another local farm, Sky Greens, has ventured into Hainan in China. I shared about the development in Sky Greens last year in COS, and this year, I am happy to show that Sky Greens has taken a step further by also internationalising into China. They have deployed their vertical farming towers on 0.23 hectares in Hainan Island in China, and they plan to develop 20 hectares more. That’s equivalent to 28 football fields!
The third basket is local production. Members have asked if local farms continue to play an important role. This is an important part of our food security because it provides a critical buffer against global supply shocks for especially key food items like vegetables, food fish and eggs. Our local food production targets are 10% for vegetables, 30% for hen eggs and 15% for food fish, and our production has generally been rising over the years. But we certainly can do better. It cannot be business as usual if local production is needed to strengthen our food resilience, and so our targets that we set are reviewed from time to time as our needs evolve and as technology becomes available. Realistically though, Singapore is too small to develop vast tracts of land for farming. We will never have enough land to ever grow all the food that we need. There are many competing uses for land, I think that is something that Members will understand. Just as we ask our SMEs in various other sectors to transform, automate, be more productive, take on automation, so we need our agricultural players to transform into one that is more productive as well. We need to adopt modern practices and embrace technology as a multiplier to do more with less.
We have been working with our farmers to help them raise their production levels. Over the past year, we have increased engagement with our local farms because they know the issues and challenges best as practitioners on the ground. We visited them over the last six to nine months, spoke with them, saw how they operate and understood some of the constraints that they have, and what they see as opportunities for the farming sector. To enable our local farmers to play an active role in transforming our farming sector, we formed an Industry Consultation Panel, or ICP, early this year. It consists of progressive farmers representing various food farm types, as well as academics who can help translate research in agricultural technology into practical implementation in our farms. Together, practitioners, researchers, academics and policy makers will work together to innovate, co-create and transform our farming sector through technology. Many Singaporeans asked, and in fact Members asked, whether local farming has a future in Singapore. This is a fundamental question. And the answer is an unequivocal “YES!”. Farming will be a part of Singapore’s future. But it will have to be a different looking farming sector from what it is today in order for the sector to fulfil its important role of strengthening Singapore’s food supply resilience and our food security.
Through focus group discussions involving the ICP, as well as meeting up with farmers directly, we developed a Farm Transformation Map, or FTM, to guide the transformation of our farming sector in four areas — physical space, innovation, people development, and the larger broad ecosystem. Let me address these one by one.
Firstly, to overcome space constraints, we need to go upwards into the sky, downwards into the ocean and even inwards into our buildings. I have already spoken about Sky Greens and Apollo using vertical technology to grow more with less space. Even traditional farms like Kok Fah are using advanced greenhouses and irrigation systems to mitigate the effects of extreme weather changes on their crop growth. Fish farms like Barramundi Asia are growing seabass in deep underwater netcages, just off Pulau Semakau. Farms like Panasonic and Sustenir are growing vegetables in climate-controlled, multi-tiered indoor spaces. Another company, ComCrop, is even growing vegetables on our rooftops! These are all innovative solutions that can help us grow more food with less space, and we should explore more opportunities and options to scale this up.
Second, we need more innovation. To optimise limited space and increase production yields, we need to push technological boundaries. We need to pursue water and energy efficiency. We need to automate and integrate systems through robotics and sensors. We have to adapt our solutions to protect against climate change that affects the yields of crops. For instance, technologies like closed containment aquaculture systems can reduce the vulnerability of our coastal fish farms and their stocks to environmental risks. In response to Ms Cheng Li Hui’s question earlier on how we can help our coastal farms mitigate consequences of coastal oil spills, this is one good example of how our farms can adopt technologies to protect themselves from untoward circumstances, especially those relating to environmental pollution or weather pattern changes. Even some of our other farms, beansprout farms for example, and I have seen it for myself, are using technology to transform the way they pack their beansprouts. It is a fairly automated process from how the beansprouts are being put into a sorter, automatically weighed, put into packets, sealed and ready to get into the freezer, and sent out to our shops. Our egg farms as well, have adopted a lot of automation, such that the eggs are automatically collected on a conveyor belt, sorted by some form of infra-red scanning to make sure that the eggs are not broken, have no micro-cracks, and then sorted into size, and packed and ready to be shipped out as well.
Through technology, from my description, you will see that farming will begin to resemble an industrial production process, much like any other factory we have. It will also attract and excite a younger generation of tech-savvy Singaporeans to consider venturing into this industry seriously. And this brings me to the third thrust.
We need the right people to achieve our vision. Transforming the sector requires a knowledge-based workforce. Our modern farmers should be more appropriately called “agri-technologists” or “agri-specialists”. We will need a generation of “agri-specialists” with multi-disciplinary expertise. Farming will no longer just be about horticulture or aquaculture. It will no longer just be about toiling in the sun doing manual labor but also about engineering, info-comm technology, entrepreneurship and R&D. The interactions between these areas will generate ideas to transform the farming industry. Back to the example of Apollo again. Apollo, as a vertical fish farm has also adopted and invented some of their own technologies – their own software, their own sensors in the fish tanks, so much so that actually, the operation room is an air conditioned room where the operator sits looking at computer monitors. They can tell the water temperature and the salinity of the water. They even have video cameras to tell how the fish are doing in the tanks and automatic feeding as well to feed the fish. So in essence, this is a very high tech process and Apollo has worked with Temasek Polytechnic and Republic Polytechnic to provide internships for students in their aquaculture course to be trained in using their high tech systems. Many young people in these polytechnics are now excited to join Apollo in their venture, especially now that Apollo has gone overseas as well.
Fourthly, we need to grow the ecosystem. This means encouraging ancillary players. It means increasing demand for local produce and helping our farms to seek financing. Consumers, Singaporeans, must also pay a part and actively support our local produce. In other words, it is about creating an active ecosystem, an environment where our farms can thrive. In this regard, the ICP pointed out that tight cash flows often limit the farmers from investing in more expensive technology. The current Agriculture Productivity Fund (APF) co-funds investments in technology but only on a reimbursement basis after the farmers have spent their own money. We have listened to the suggestions put forth by the ICP. Therefore, from April this year, the APF will disburse up to 30% of the approved funding quantum upfront, to facilitate the adoption of technology. This will complement our move to increase the tenure of farm lands to 20 year leases, from the previous 10 plus 10, based on industry feedback.
AVA will also adopt a new “account management” approach for our farms. This means that each farm will now have a dedicated account manager to advise them on business development, technology adoption, and financial assistance. The account manager will facilitate the farmer’s interactions with many agencies and they will also work with stakeholders. Think of these account managers as the equivalent of SPRING Singapore for our farming industry. AVA wants to help our farmers succeed. If they are willing and able to transform, AVA will walk this journey with them.
In fact, one of the things that AVA has been actively doing is to help our famers understand technology better. Just last year, AVA brought a group of our farmers to Japan to source for technology, to help them look at indoor farming technology which they may be keen to adopt. This year. in April, we will be bringing another group of farmers to other advanced farms in China to understand land-based farming and some of the technologies they can adopt in Singapore as well.
This Farm Transformation Map is just in its infancy. We will continue to work with the ICP and other stakeholders to refine it as we gain momentum and as technology for farming matures. Over the next few years, this partnership will create practical initiatives and solutions that will be impactful for the farming industry.
Therefore, to respond to the three Members, the Government has a strategy. But it will not be without challenges going forward and we cannot do it alone. We need the cooperation and support of our local agricultural practitioners to transform themselves and the entire sector. And I believe that if we can do this, we will have a “food story” to go along with the “water story”.
Transforming our Real Estate Sector
The agriculture sector is not the only sector that has to transform itself to prepare for the future. The real estate sector also needs to change. Mr Chong Kee Hiong asked how the Ministry will help our real estate industry overcome the challenges that are posed by digital disruption. We are already seeing signs of such disruption in countries like the US, UK, and Australia, where sophisticated online platforms have enabled consumers to conduct property transactions themselves. They have used online property searches and viewing, as well as e-conveyancing and other value-added services.
We have also seen quite a number of DIY property portals sprouting up in Singapore in recent years. This has led to a growing number of Singaporeans choosing to complete their property transactions without the use of property agents. To survive and thrive, the industry must consider new ways of doing things. MND is therefore bringing together industry stakeholders across the entire real estate value chain. This includes property developers, estate agents, conveyancing and valuation firms, to collectively develop a Real Estate Industry Transformation Map or the Real Estate ITM. This is one of the 23 ITMs being developed under the Industry Transformation Programme. Through the ITM, we hope to create a resilient and future-ready real estate industry that will continue to provide good jobs for Singaporeans. This will involve three broad thrusts: (i) productivity; (ii) scale; and (iii) skills.
First, we must help our real estate companies maximise the potential of their workers and raise their productivity. This will allow them to remain competitive, and continue to provide good jobs. On our part, government agencies will consider how we can streamline processes to make the sector more productive, while providing consumers with added convenience and more positive experiences. HDB is already doing a review of its resale transaction processes with the aim of significantly reducing total transaction time. One possibility that we are considering is to do away with one of the HDB’s resale appointments by leveraging on ICT technology. We will also explore how to streamline other transactions, such as for rentals or private properties.
Our second thrust is to help companies scale up and take advantage of new growth areas. With scale, companies can leverage on greater economies of scale, increase their value proposition, and better respond to market disruptions. Several real estate companies have done this by expanding into related areas in the property value chain, or by venturing overseas. One example is home grown company, LHN Group. They have enhanced their value proposition by expanding downstream — from their original focus in space optimisation, to facilities management and shared services. LHN’s efforts, with support from SPRING and IE Singapore, have allowed the company to take advantage of new areas of growth, including expanding into China to manage mixed-use developments.
We need more of such examples. Expanding into new business areas or overseas markets is not easy. This is why, as part of the real estate ITM, we will work with the industry to identify new areas of growth, and see how to support their efforts to deepen their expertise, develop competitive niches and enter overseas markets.
The third thrust is to ensure that our workers are equipped with the right skills. As we work with the sector to raise productivity and pursue new areas of growth, there will be new ways of doing things and new jobs created. For example, with more information and services being online, it may be more important for property agents now to hone their skills in servicing clients and building up their credentials rather than just competing on marketing and closing transactions. We will be working with companies, industry associations and unions to ensure that there are training opportunities to help workers upskill and continuously refresh those skills throughout their careers.
Together, these thrusts will support a major transformation of the real estate industry. This will not be easy. But as the CEO of Netflix, Reed Hastings, said: “Companies rarely die from moving too fast, and they frequently die from moving too slow.” The time to transform is now. Over the next few months, colleagues from MND and the agencies will work closely with all stakeholders — companies, industry associations, workers, and unions — to develop the ITM and the way they should take forward.
Additional Cuts
Let me now address some of the other queries raised by Members. Mr Chong Kee Hiong asked about using the Estate Upgrading Programme (EUP) to address the deterioration of public infrastructure in older private estates. Let me clarify that the EUP is not the most appropriate way to do so because it is meant to provide amenities in private estates that go beyond routine maintenance work. Public infrastructure in private estates is maintained by public agencies like NParks, LTA, and PUB. If deterioration occurs and ad-hoc repairs are needed, the public can alert the relevant agencies directly, or go through MSO’s OneService app to do so. Mr Chong Kee Hiong’s Clover estate, is one of the private estates that he asked about earlier. The estate has already been approved for batch 9 of EUP, and I believe we are in the process of calling for tender to appoint the consultants. We hope that by June or July this year, we will be done with appointing all the consultants, and then they will be able to work with the relevant working committees to plan the schedule for EUP in batch 9. Mr Chong Chee Kiong also asked about the master developer concept. This has been covered under Minister Lawrence Wong’s speech earlier, so I will not elaborate further. He also asked about the option of using a Business Improvement District (model) in our planning, and I think this is something that we will study, and hopefully we will be able to release more details when the studies are completed.
Mr Louis Ng made several suggestions to better tackle animal crime, including increasing the number of AVA inspectors for wildlife crime, introducing sniffer dogs to detect smuggled wildlife, and working more closely with Animal Welfare Groups (AWGs). I thank the Member for his interesting ideas. We will certainly consider them. AVA already works closely with AWGs on animal cruelty cases. This has been found to be mutually beneficial, and this cooperation has resulted in several successful investigations. I believe AVA is happy to engage more AWGs who can be helpful in this way.
Mr Louis Ng also asked whether we can extend the funding and support for the Love Cats pilot project to more estates in Singapore. We are currently in the process of assessing the Cat Welfare Society’s proposals, but we do need to recognise that there are differing views among residents on this subject. We want to be a City in a Garden with its attendant Fauna and Flora. For that to be a reality, we all need to play a part in finding the right balance between human–animal interaction and conflict. We expect pet owners to be responsible for their pets, just as we expect others to treat animals with respect and tolerance.
Mr Louis Ng asked about the possibility of labelling palm oil on food labels so that consumers can play their part in anti-haze efforts. This is an idea that requires further study. For instance, requiring this labelling on food labels could help consumers make more conscious decisions. However, this would also be stricter than international standards and may be misperceived as a trade barrier. For the moment, we have taken the approach of encouraging the industry to voluntarily declare that their palm oil is from sustainable sources. The Minister for the Environment and Water Resources will talk more about the haze issue later in his COS session.
Helping Low-income/Vulnerable Families
While we move to tackle the challenges ahead, we must also support the vulnerable in our community. Several Members asked whether we can do more for single parents. There were suggestions to waive the resale levy, to allow flat applications before the finalisation of divorce, to lift the debarment and raise the income ceiling for public rental, to have a dedicated appeals channel, and to give more help to single unmarried parents.
Let me just say that single parents are not a homogeneous group and each of them may have their unique circumstances and challenges. Let’s think back on all the residents we see at our Meet-the-People sessions (MPS) – there is no typical case of a single parent. There is no classic case that fits a certain profile – they all have their unique social challenges, different family backgrounds and unique family situations. We have addressed some of these challenges and how we help single parents in previous parliamentary questions before but let me reassure members once again that while certain rules and criteria are needed to achieve fair allocation and policy objectives, they are not applied in a blanket manner, simply because there is no typical case, and there is no typical profile. And therefore, we take a case-by-case approach and apply flexibility, taking into account those factors I said earlier.
I would like to share some actual cases from last month (Feb 2017) where HDB has made exceptions to help families in need.
a) A gentleman, let’s call him Mr A. He earns $1,800 monthly at a hawker stall. He is the sole breadwinner supporting his wife and two children, and sold his flat last year due to debts. A very common story that we may have encountered at our MPS. HDB waived both the income ceiling and the 30-month debarment for the family. They moved into a 2-room rental flat in Ang Mo Kio last month.
b) Another gentleman, let’s call him Mr B. He earns $2,000 monthly as a driver, and is close to retirement age. His wife is unable to work due to health issues and looks after their daughter. They had been staying with a friend, but the friend asked them to move out. Another common story. HDB waived the income ceiling for them, and today the family is in a 2-room rental flat in Bedok.
c) Another case – Mdm C, a lady in her 30s, is a single unmarried parent with 3 children who were born out of wedlock. Her family turned her out, and she could not turn to the children’s biological fathers as they had moved out of Singapore. Another sad but not an unheard type of story. She is unemployed as she needs to look after her children. HDB allocated them a 1-room rental flat in the Northern part of Singapore.
All these families, and many others, were assisted by HDB because they were in need, had no other housing options and no family support. Each of them has a different story and a different need at the same time.
I thank Members for their various suggestions, and we will study them as we review our policies.
Ms Kuik asked what is the best approach for single unwed parents to access housing. I would say anybody who is in need is welcome to approach their MPs for help, but they can also appeal to HDB directly and the examples I gave earlier showed that HDB does take a compassionate approach towards these cases in need. HDB will seek to understand the facts of each case, evaluate all appeals fairly and objectively, and apply help where necessary.
Ms Kuik also asked for an update to the ASSIST scheme. Let me just remind Members that ASSIST stands for Assistance Scheme for Second-Timers, where we set aside 5 percent out of the 30 percent second-timer quota for 2R Flexi and 3-room BTO flats in non-mature estates for divorced or widowed persons. Since May 2013, 887 flats were set aside under ASSIST. Of the 282 applications received before 2016, 199 or 71 percent went on to book a flat. 66 of them or 23 percent did not proceed despite qualifying. Perhaps they already have alternative housing options. And another 42 applications are currently under process.
Ms Kuik also asked about the underlying principle of why only applicants who sold the flat before divorce can apply for ASSIST scheme. Let me just explain that ASSIST is meant to cater to those who are unable to own a place on their own after divorce. Therefore, those who were able to retain their matrimonial flat after divorce or those who are able to buy a flat after divorce - when they dispose of their old flat, they get some money and they are able to buy a flat on their own - they would not qualify for the ASSIST scheme. So the financial status is also something that we consider and whether they end up owning the matrimonial home subsequently. That is why the scheme is designed this way.
Our housing policies address the majority of our population, and there will always be a minority whose circumstances are not addressed. The channels for appeal are always open to them and they are not intended to create extra friction. Rather, it is to ensure fairness to the majority who have abided by the general policies. So I urge Members of this House, and members of the public, to approach agencies for assistance when necessary.
36 Ms Cheryl Chan and Mr Pritam Singh asked whether HDB can offer rental flats to Singaporeans married to foreigners. If they do not have Singaporean children, it is difficult to extend them the same level of subsidies as households with two or more Singaporeans. Nonetheless, as the Member has acknowledged, HDB does exercise flexibility and HDB has made exceptions to help those in extenuating circumstances, and we will continue to do so.
Separately, on the Joint Singles Scheme (JSS) in public rental, we agree with Mr Henry Kwek that flatmates provide company and support for each other. For the minority who cannot get along, HDB advises them to seek mediation and if that is unsuccessful, they may search for another eligible person or apply to rent another flat. We do not intend to allow singles to stay alone, but we are working to address some of the issues through design. Since 2015, HDB has made available 180 JSS rental flats with partitions for more privacy. Another 320 of such flats are now under construction.
Update on Fresh Start
I would now like to close with an update on the Fresh Start Housing Scheme, which opened last December for second-timer families in public rental. We have received 68 applications from families who meet the basic profile [in terms of demographics and housing situation]. And I am pleased to say that 13 families have been emplaced, and 4 of them have already applied for their 2-room flexi flats in HDB’s sales exercise last month. A few more are awaiting their emplacement interviews and another 48 applications are being processed.
One of the emplaced families, the Lim family, visited the 2-room Flexi show-flats at HDB Hub, and told us they are very excited at finally being able to have their own home. Mrs Lim in particular cannot wait to do up her own kitchen. It is every woman’s dream to want to have a nice kitchen I suppose.
Many applicants have told us that the help offered by Fresh Start is useful, from the grant, to the concessionary rate loan, and the capping of the resale levy. Before Fresh Start, second-timer families would not have been eligible for any of these concessions — certainly not a second housing grant. I think this shows that we do consciously review our housing policies to make them more inclusive and to help families who would otherwise not qualify again.
I thank Mr Saktiandi for suggesting that Fresh Start be extended to single unmarried parents in public rental. They are welcome to apply and HDB will take a case-by-case approach to assess their eligibility.
I am very excited for the emplaced families who have begun their journey back to homeownership. It is early days in this scheme, and we look forward to welcoming more families on to the scheme.
Thank you.