Budget 2018 Speech by SMS Dr Koh Poh Koon: Growing Our Industries; Supporting the Vulnerable

Mar 6, 2018

Update on Farm Transformation Efforts

Let me begin by thanking Mr Darryl David and Mr Leon Perera for their comments on our local agricultural sector. Both members spoke about its importance and how we should continue to nurture the growth of the agricultural sector.  I agree with them. That is why AVA launched the Farm Transformation Map (FTM), in collaboration with the Industry Consultation Panel, last year. The FTM provides a platform that brings together government agencies, industry players, and institutes of higher learning to transform our farming sector to become more resilient and productive. The FTM remains a “live document” that is constantly updated based on evolving needs.   

I’m glad to report that we have made progress. For instance, AVA launched the new farmland tenders on 20-year leases last year. Now, this is the first time that AVA is tendering out land using the Fixed Price tender method. This allows tenderers to compete on concept as opposed to price. Proposals will be evaluated based on production capability, track record, relevant experience, innovation, and sustainability. Any farmer who is committed to being productive and has a good track record will stand a good chance of winning the tender.  

Eden PurelyFresh farm is one such example. It started out growing vegetables using traditional farming methods. But in 2012, the owner Mr Chan Yow Tiong, decided that the farm needed a new approach in order to stay competitive. So he brought in Mr Desmond Khoo, a technologically savvy 25-year-old entrepreneur with strong marketing skills.  Mr Khoo also owned a few vegetable stalls in wet markets, as well as a fresh food import business. Through this complementary partnership, the farm began exploring innovative ways and technologies to increase their productivity.  I am happy to note that Eden PurelyFresh farm won a plot of land in the last tender exercise with a proposal to grow vegetables using greenhouses with innovative monitoring systems. This shows that with the right partners and mindset, farmers can indeed take their businesses to the next level. In fact, this on-going series of tenders will provide existing farmers with a clean slate of sorts to bring in new technology and transform the way they operate, without the encumbrances of previously existing operations.  

There are also opportunities for farming in unconventional spaces.  Rooftops are interesting possibilities in our highly urbanised environment.  In 2014, we piloted Singapore’s 1st rooftop farm – Comcrop - at SCAPE mall in Orchard road. We saw its potential to scale up and facilitated conversations between Comcrop and JTC for a 35,000 square feet rooftop space on one of JTC’s food factories in Woodlands. With space the size of 7 basketball courts, Comcrop has now finalised plans to develop 8 high-tech greenhouses with environmental controls. We will continue to push for such innovative projects to optimise our land-use and to grow our urban farming movement.   

But farm transformation can only succeed if the industry takes the lead to embrace innovation as well.  So in this regard, I am glad that a few members of AVA’s Industry Consultation Panel came together last October to form the Singapore Agro-Food Enterprises Federation, or SAFEF for short. SAFEF aims to represent, advance, and promote the agro-food sector in Singapore for economic development and for export. As a ground up initiative, SAFEF’s founding members collectively contribute more than 50% of our locally grown produce and represent some of our most productive food farms. Having these progressive farmers band together to walk this journey with us makes me confident that we can raise the sector’s productivity and improve our food security. I look forward to more farmers joining SAFEF and working closely with us.

And indeed, we want to do even more together. We have worked closely with the industry and taken on board their feedback to review existing schemes and develop new initiatives to better support our farmers. Let me highlight three key initiatives. First, we will further enhance the Agriculture Productivity Fund (APF). Many farmers have told us that they are happy to adopt more productive technology. However, new farming systems require heavy capital investments. Advanced greenhouse systems with environmental controls and automation, which can double their production, can cost around $4 million. We appreciate that this poses challenges for many of our farms. So to help farmers take this leap, we are increasing the APF Productivity Enhancement component’s co-funding cap from $700,000 to $2 million for our strategic food farms. This is a significant enhancement.

Beyond the capital cost of implementation, farmers have told us that they need assistance in testing these new systems prior to a larger-scale deployment, to ensure that the technology can be adapted to our local conditions and produce. Several rounds of trials are usually necessary before farmers can commit to a particular technology or system at a commercial scale. Hence, we will now introduce a new test-bedding component to the APF to co-fund up to $500,000 for food farms that want to testbed new solutions.    

Secondly, we will develop a Singaporean workforce for our farms of the future, in partnership with our Institutes of Higher Learning. It will provide a talent pipeline to ensure our farms have skilled manpower to undertake transformation and innovation. For a start, Temasek Polytechnic will launch its new “Earn and Learn” work-study programme to attract ITE graduates into the aquaculture industry. Under this programme, participating farms can enjoy up to $15,000 worth of incentives for each graduate to defray their training costs. I’m glad that six of our food fish farms have already pledged support for this programme. The graduates will start their 12-month attachment programmes from April this year. I hope that our farmers will indeed take this opportunity to create a positive learning experience for the graduates. This will help encourage our young talent not just to enter the industry, but also to stay and contribute more to the industry.

Third, we will do more to help increase demand for local produce.  As our farmers become more productive, they will naturally need more consumers to support them.  In this context, we organised the first SG Farmers’ Market last September at myVillage mall in Serangoon Gardens. The event generated plenty of interest.  More recently, we co-organized the second Farmers’ Market last month with SAFEF.  More than 25 local farmers participated, and I am happy to say that most of them sold out all their products to the crowds that visited the Market. This was a very good response. Five busloads of my Yio Chu Kang residents visited the Market and snapped up the produce. I’ve heard good feedback from my residents. I also know that many other grassroots organisations organised groups to support the event. And for that I want to thank everyone for the support. We will keep up the momentum and bring Farmers’ Markets to the heartlands by August this year. AVA will also partner SAFEF in developing a broader marketing plan for local produce to raise consumer awareness.  I urge consumers, especially Singaporeans, to support our fresh and nutritious local produce. 

These efforts will strengthen the ecosystem and the operating environment for our farms.  But as the industry matures, we also need to start looking at the wider food value chain.  We will continue to work towards creating an enabling environment to keep our local agricultural sector commercially viable and sustainable for the long term.  

Helping Low-income & Vulnerable Families

Now let me move on to supporting our families in need.

Everyone wants a safe haven to call home, but some may have lost their homes or have been displaced.  Several Members have highlighted that this can be a difficult time for these families, and asked about assistance for single parents, families in hardship and our seniors. 

Smoothening Transitions for Families

Single Parents

Minister Lawrence Wong earlier announced that we will lift the divorce time bar.  HDB may also offer rental housing to those in need and displaced by divorce. Some may have no family to turn to. They also cannot buy an HDB flat until the divorce is finalised, and their housing eligibility and budget are clear. HDB does help them. We will deal with them on a more flexible case-by-case basis.

Ms Cheryl Chan spoke about the housing needs of widowed Non-Residents.  Following the demise of their Singaporean spouse, they may retain the flat with a Singaporean family member.  Where there are young children involved, HDB can allow the flat to be retained in trust for the children, or let those with no housing options rent a flat.

Mr Muhamad Faisal asked for housing policy to better cater to unmarried parents.  We encourage those who live with their family to do so, for mutual support and childcare.  But each family has different needs and circumstances, and therefore we will exercise flexibility where needed, to ensure that every child has the opportunity to grow up in a stable and secure environment.

Changes to Rental Debarments

As Mr Saktiandi Supaat highlighted, families in financial hardship may end up without a place to stay.  And they may worry about being rejected from public rental because of past property ownership.

In fact, HDB takes a needs-based approach in assessing applications for public rental.  HDB considers their income, whether family members can accommodate them, and the applicant’s ability to afford a flat.  This takes into account the sales proceeds from their previous property, if any.

We have updated the eligibility criteria for public rental to make these considerations much clearer.

Catering to the Needs of the Vulnerable

Several Members asked how we help Singaporeans who do not meet the eligibility criteria for public rental, and how we cater to larger families with children. Let me emphasise again this is why HDB’s needs-based approach is important.

While the public rental income ceiling is one such consideration, the cost of homeownership is another. Over the years, homeownership has stayed affordable, with more grant options and also higher grant quanta.

We want to encourage homeownership whenever possible. Those who can afford to buy a flat – especially First-Timers with grants – are not allowed into public rental, even if their income is within the ceiling.

On the other hand, others above the income ceiling may be accorded flexibility.  For example, larger families have higher expenses, which we account for when assessing their housing options.  In the last 3 years, we let more than 470 families with income above the income ceiling enter public rental.

Today, a family of 3 can already rent a 2-room flat if they earn an income.  More than 90% of rental households have 4 or fewer registered occupants.  For the larger families, most live in the larger flats.  

I would like to assure Mr Chong Kee Hiong and Mr Pritam Singh that the waiting times from application to key collection now average 3 months, down from a peak of 21 months in 2008. This is the result of HDB ramping up supply over the last decade to about 60,000 rental flats today. We will continue to monitor the need to build more rental flats. Some wait time, however, is inevitable as HDB assesses each application and considers the household’s preferred location.  For those in urgent need, HDB may offer them priority allocation or interim rental.

For both rental and homeownership blocks, HDB and the Town Councils work together to ensure the cleanliness and maintenance of common spaces.

Helping Low Income Families with Homeownership

Low Income Seniors

Let me now address Members’ suggestions for seniors. Mr Dennis Tan and Mr Gan Thiam Poh suggested measures to help low income seniors buy a flat, which we will study further.  Today, seniors already have the option of short-lease 2-room Flexi flats, which are highly affordable.

Mr Tan’s suggestions to reduce the single premium is already in place. All price components for short-lease flats are adjusted downwards based on the lease chosen. Now with grants, first-timer seniors can buy a short-lease 2-room Flexi flat for as little as $3,000.  For second-timer seniors, we cap their resale levy at $30,000 and adjust it downwards based on the shorter lease.  They can buy a 2-room Flexi flat, on a 40-year lease, for as little as $58,000 including the resale levy.  This is just over half of what they would pay for the same flat on a 99-year lease.

We also thank Ms Cheryl Chan for her suggestions.  While MSF actively encourages Singaporeans to make a Lasting Power of Attorney or LPA, and to do so early, this is ultimately a personal decision.  We also note her points on means-testing for seniors living in short-lease private properties.  We will study these issues further with the relevant agencies.

Fresh Start Housing Scheme

Homeownership is a cornerstone of our nation, and Mr Gan Thiam Poh asked how we are helping rental tenants with this.

Members will know of the Fresh Start Housing Scheme, for second-timer rental families with young children.  I am pleased to update that more than 130 of such families applied, and 61 families have been emplaced.  31 of them have booked a flat, of whom 2 will be collecting their keys this year.

One of our Fresh Start families is the Chng family, who booked a flat in Yishun last year.  With the Fresh Start grant of $20,000 and his CPF savings, Mr Chng bought the flat without a loan.  After collecting their keys, the family of four can receive up to $15,000 in grants over the next 5 years, which will grow their CPF savings.

For rental families who are ready to buy a flat, we want to help them to do so sooner.  Therefore, we will reduce the minimum stay requirement for Fresh Start, from 2 years currently to 1 year.  This means that eligible families may even be emplaced before their first rental tenancy renewal. 

Fresh Start is still a very new scheme, and we will continue to consider further enhancements with the Advisory Committee.

Other Rental Families

We encourage all rental families, including those who wish to purchase a larger flat, to discuss their homeownership aspirations with HDB.

On average, about 800 households move from rental into homeownership each year.  Most of them are first-timers, helped by the affordable flat prices and our generous housing grants.  Rental families also get priority allocation under TPS, the Tenant’s Priority Scheme.  After we expanded TPS to include second-timer families in 2016, 150 more families have benefitted.

One of them is the Ng family. After entering rental, Mr Ng found steady employment and grew his income.  The family of five has recently moved into their own 3-room flat in Punggol.  I am happy for them, and wish them every success.

Now I hope these data and examples will assure Members that we take a needs-based approach in providing assistance.  We will continue studying how to support families on their homeownership journey, and I look forward to sharing more of our progress next year. Thank you very much.