1. Mr Masagos Zulkifli, Mr Teo Ser Luck and Mr Low Thia Khiang have spoken on issues related to food safety, food supply and food inflation. These issues are intricately linked.

Food safety

2. Ensuring food safety has always been a key priority of AVA. AVA adopts a science-based, risk management strategy, in line with international standards and benchmarked with the best practices.

3. Food items that carry a higher risk of contamination are inspected more frequently and subject to systematic sampling for testing to detect foodborne pathogens, residues and contaminants.

4. Despite numerous press reports concerning the safety of Chinese food products, as Mr Teo has pointed out, the rejection rate for food imports from China is comparable with the overall rejection rate for food imports over the last three years. AVA will remain vigilant, and may introduce additional programmes or checks if necessary.

Resilience of Food Supply

5. A robust and effective food safety management system ensures that our import requirements are adequate but not overly stringent. It provides the necessary bedrock to give us the confidence and latitude to consider various strategies to enhance supply resilience and manage food inflation.

6. Diversification of supply sources, backed by AVA’s food safety regime, will remain a key strategy to ensure supply resilience. Diversification enables us to switch quickly to alternative sources to deal with supply disruptions in one or several sources, regardless of whether the disruptions are caused by disease outbreaks, bad weather in certain places affecting crop yields, or temporary export bans. AVA has been working closely with the industry on our food diversification strategy for many years.

7. The food industry manages short-term demand and supply fluctuations through their business continuity plans. These include holding buffer stocks and pre-identifying alternative sources or substitute products.

Food Price Increase

8. Let me address the issue of food inflation. The recent trend of rising food prices is a global phenomenon. In 2007, many countries experienced considerable food inflation. Food prices went up by 12.3% in China, 11.2% in Vietnam, and 4% in the US last year. Adverse climate, diversion of agricultural land to produce bio-fuel crops, rising fuel prices, as well as increased consumption in emerging countries like China and India, have all contributed to rising food prices.

9. As we import the bulk of our food, we cannot be totally insulated from this global effect. In 2007, food prices in Singapore rose by 2.9%.

10. Mr Masagos is right. Subsidies and price controls are not the way to go. To mitigate food inflation, our approach has been to keep our market open so that importers can source for food items from diverse sources at the most competitive prices.

11. Our diversification effort has yielded positive outcomes. For example, taking year-on-year comparison for 2007, the import prices of chicken and pork had not risen significantly, hovering at 1% on average.

12. The Government is doing more to mitigate the impact of food inflation. We are working on further diversifying our sources. AVA is expediting the approvals of more countries and establishments to export to us.

13. To open up even more sources, we also need to be innovative and explore new ways to bring in the food safely. One innovation, which AVA piloted, recently was the sea freighting of chilled pork from Australia. This has opened up an alternative logistic channel, which has the potential to bring down the import prices of chilled pork, for example.

Consumers’ role in managing cost of living

14. But we need more than the Government and industry efforts to mitigate the impact of food inflation. Consumers have an important role to play in managing their cost of living. They can manage their expenditure on non-cooked foods through various options.

15. Firstly, they can switch to frozen meat, which are typically around 20% cheaper than chilled meat. Some cuts can go even up to 53% cheaper, such as chicken wings and drumsticks; while frozen pork loins are about 38% cheaper.

16. We have received anecdotal feedback that some consumers are unwilling to use frozen meat. The perception is it is less fresh and tasty. It is somewhat ironic that some of them would buy chilled meat, only to freeze it for use some days later. Many people also may not realise that we have been consuming frozen food, such as frozen chicken and pork, which is used widely by the food industries, restaurants and hawkers for preparing their cooked or processed food. In fact, the consumption of both frozen pork and chicken in Singapore last year was about 60% of the total demand for pork and chicken.

AVA’s Frozen Meat Public Education Programme

17. To help consumers make informed decisions, AVA has embarked on a public education programme to raise awareness on the availability of frozen meats, educate consumers on the proper handling of frozen meat products, and dispel the misconception that frozen meat is not fresh, tasty or wholesome.

18. Second, consumers who are willing to make adjustments to their preferences for basic food items also have other options.

19. For most food items including cooking oil, rice and bread, there are many other varieties and brands that consumers can choose from. For example, house-brand items offered by retailers are 10 to 15% cheaper on average. Consumers can also shop around for promotions which give them greater value for dollar.

20. Mr Low has asked on the feasibility of Singapore producing its own food. In land scarce Singapore, we cannot rely on expanding agricultural land to supply the amount or variety of food for the whole population. This is neither viable nor practical. We have however, invested in certain degree of local food production by exploiting technology, as Mr Low has suggested. One example is our long-term plan to develop the aquaculture sector, as fish harvest from wild catch is expected to drop over the years. AVA has invested in high-value upstream technology to produce robust fish frys, which is the weakest link in food fish production. Notwithstanding this, given our land size, there would still be a need for us to partner regional players for the grow-out phase to be carried out beyond our shores.

Conclusion

21. The Government will continue to monitor the food safety, supply and price situation. We will remain vigilant and work closely with the industry. We will step up our efforts to raise awareness on the availability of food choices to enable consumers to make practical and informed decisions. More importantly, consumers must recognize their role and play their part in managing the impact of food inflation.

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