Commentary: Is Singapore’s decades-long shift away from agriculture about to take a U-turn?
The food industry can thrive in land-scarce Singapore, looking at other small but successful food exporting countries, says RSIS’ Paul Teng.
SINGAPORE: Singapore has gone through such spectacular changes in its bicentennial history that today’s visitors to the country may be forgiven if they think it has always been a glitzy concrete shopping paradise and financial hub.
It was only at the turn of the 19th century that Singapore grew, exported and traded in gambier, nutmeg, cinnamon, among other produce. And until the 1970s, orchards, chicken and pig farms thrived on the main island.
As Singapore accelerated its transformation from Third World to First post-independence, so too did its policy makers confront difficult choices on the use of limited land.
Economic transformation focused on transferring resources from land-intensive agriculture to other more value-adding sectors. Land used for farming then shrunk, and by the 1990s Singapore’s agriculture had become confined to six agro technology parks occupying some 1,500 hectares of land or less than 1 per cent of its total area.
During the 2000s, emphasis was placed on productivity and use of technology to enable increased production of vegetable, fish and eggs in limited spaces.
The Agri-Food and Veterinary Authority of Singapore (AVA), as the Government agency responsible for food, animal and plant health, rolled out initiatives to support farmers and research.
Others in the food science sector chipped in to support Research and Development (R&D) in various aspects of plant agriculture and aquaculture, although an explicit national strategy for research investment was not obvious.
FROM FOOD SECURITY TO FOOD INDUSTRY
Singapore has for a long time had a small food manufacturing and processing sector. In 2017, the sector employed just under 50,000 workers and was worth S$4.3 billion or about 1 per cent of GDP.
Recently more calls for a renascent food production and processing sector have been made, not just to encourage increased production for food security but also as a potential value-adding sector which could foster new livelihoods and even contribute to exports of products and intellectual property.
This had in mind not just the Singapore market but the broader Asian and indeed global market.
These aspirations, however, are more closely linked to and take dressing from Singapore’s larger aspirations to be a leading player in advanced technologies and digital applications, agriculture being just one sector.
But a change is underway, as the thinking surrounding agriculture has shifted beyond food security to food industry, reinforcing Singapore’s emergence as a matured economically confident nation and reflecting the changes from labour-intensive to technology-enabled farming and food processing picking up pace in most developed countries.
On Monday (Mar 4), Senior Minister of State for Trade and Industry Dr Koh Poh Koon re-emphasised Singapore’s vision to be “a leading urban agriculture and aquaculture technology hub with a food production model that can be exported to the region”.
This vision was given a concrete domestic target on Thursday (Mar 7) when Environment and Water Resources Minister Masagos Zulkifli announced that the country will aim to produce 30 per cent of Singapore’s nutritional needs by 2030 and laid out the strategy to get there, through the employment of technology, unlocking of physical spaces, developing local talent and getting consumers to support local produce.
In this transformation journey, there are lessons from other countries with similar goals.
NETHERLANDS’ FOOD VALLEY
While large countries like the US and Brazil dominate the global food economy, much smaller countries are also in the top league of food exporters measured by value.
The Netherlands is the second largest food exporter after the US – top Dutch companies include Unilever and Heineken – but ranks first in the world if agricultural land size is accounted for. The next most land-productive country is Belgium.
Both not only export primary produce but also convert imported primary produce into food or other products in varying degrees of sophistication for export.
The Netherlands has a “Food Valley” occupying – an internationally recognised, self-contained, extensive agri-food park that encompasses education and agricultural R&D, food manufacturing and processing entities, distribution networks and financing institutions.
Two decades ago, the Netherlands committed to developing a model of sustainable agriculture, with the goal of producing twice as much food, with half as many resources.
Starting in 2004, a “Food Valley Organisation” (FVO) was formed with support from government and private sector to build on the strengths of individual entities and through derived synergy, propelled the Netherlands into a global food player.
The FVO is sustained by subscriptions from its members and grants from public agencies for services performed. It works with the government but is not a government agency.
Likewise, in Belgium, the analogous area is the Flanders region which has a similar nodal, coordinating entity called “Fevia” working with all players but sits outside government.
WHAT ENABLES SUCCESS?
Expansive arable land is not a pre-requisite for success in becoming an innovative country with high-value food exports, as seen from the Netherlands and Belgium.
Food industry clusters which are successful do not develop by chance. A spate of enabling factors are discernible.
These include focal organisations which promote coordination, growth and synergies. It appears to have been important in positioning the Netherlands’ and Belgium as top food exporters in terms of land productivity.
Appropriate infrastructure for R&D and enterprises, supportive public policies, a culture of innovation and entrepreneurship, and the presence of an ecosystem are what makes for a successful food industry.
Having relevant human resources - people with the requisite skill sets - is indispensable for the successes enjoyed by major food exporting countries.
In the Netherlands and the Belgium Flanders region, higher education institutes and vocational schools like Wageningen University provide a reliable supply of skilled labour and act as a key source of research powering their countries’ food revolution.
Today’s food systems are made up of supply chains with many parts from farm to fork. Along these parts require a country to have an ecosystem of key ingredients including knowledge, infrastructure or support systems, financing and regulations.
SO WHAT “CHECKS THE BOXES” FOR SINGAPORE?
Singapore does not have the comparative advantage to grow extensive crops like rice, but can develop a niche positioning in intensive, small-area specialty crops.
In doing so, it should leverage existing national strengths: Its proven capabilities in research, an educated, adaptive workforce for high-tech agriculture and food processing, and well-supported enterprises.
But it is lacking still in people with the knowhow that can take the food industry to the next level, which hopefully will be addressed by recent new initiatives at Budget 2019 – such as the establishment of a Centre of Innovation in Aquaculture (which will cover marine farming) at Temasek Polytechnic, a school that also offers an applied food science and nutrition diploma.
The global agtech market - the intersection of agricultural and advanced technologies in information technology (artificial intelligence, internet of things), chemical and electronics - presents opportunities for Singapore to attract industry players.
In the expanding plant factory space of indoor vegetables, there is also a silver lining of exporting Singapore branded factory vegetables.
Singapore’s largest indoor vegetable farm of 20,000 sq m is expected to be fully functional by early next year, and will be one of the biggest in the world. Still, surplus production may find new markets in the rest of Asia if accompanied by aggressive, enlightened marketing.
BIRTHING A NEW FOOD INDUSTRY
The goals associated with developing a renascent food industry sector in Singapore are, apart from improving food security, to create jobs, gain economic advantage through value-added exports, and contribute to a culture of innovation and entrepreneurship. To achieve these, some aggressive strategies will be needed.
One strategy is to double down on a laser-sharp focus on high value-add activities within total food systems. The sector could focus on meeting upstream research needs or downstream processing, or generate only high-value, unique and branded produce that can produce a high margin and do not rely on volume sales to be profitable.
A second strategy is to establish an independent private-public-partnership food industry nodal entity supported by key stakeholders who have access to funding, expertise and networks including EDB, Temasek Holdings, notable large food enterprises and Singapore food industry groups - to coordinate, catalyse, leverage, and synergise across food industry sectors so as to accelerate progress.
A third strategy is to accelerate the development of a tech-savvy workforce in agriculture and food processing knowhow, backed by appropriate R&D capacity through Singapore higher education institutes and ASEAN centres of expertise in food production and processing.
Putting in place support that is clearly defined can encourage the growth of a new food industry which makes use of Singapore’s comparative strengths.
LAND FARMS IN OUR GARDEN CITY
But, lest it be forgotten, Singapore’s aspirations to be a “City in a Garden” need to have an agriculture sector aligned to it. Not all of Singapore’s food production capacity need or should be indoor, in a controlled environment or use high tech.
There is an existential human need to have some real green farms growing plants and animals like the majority of farms in Asia – which bring quality of life benefits to citizens.
In fact we will be a poorer Singapore if our children do not have at least a small farming countryside to go to and experience how the food we import are grown, and how the soil can bring life to our tables.
This last part is perhaps the most crucial ingredient because knowing more about farming improves the appreciation for food.
Paul Teng is Adjunct Senior Fellow (Food Security) in the S Rajaratnam School of International Studies, Nanyang Technological University in Singapore and concurrently Honorary Senior Fellow, Southeast Asian Regional Centre for Graduate Study and Research in Agriculture (SEARCA/SEAMEO) in the Philippines.