Replies to LegCo questions

LCQ16: Sustainable development of local agriculture

Following is a question by the Dr Hon Lam Tai-fai and a written reply by the Secretary for Food and Health, Dr Ko Wing-man, in the Legislative Council today (January 21):

Question:

In a consultation paper on the new agricultural policy published in December last year, the Government proposed that an area of about 70 to 80 hectares of private agricultural land in the New Territories be acquired with public money through land resumption pursuant to the Lands Resumption Ordinance (Cap. 124) for setting up a government-run Agri-Park. The farmland in the Agri-Park will be leased at market rates to farmers affected by government development projects for agricultural rehabilitation and to other interested farmers as well. The Government also proposed to establish a Sustainable Agricultural Development Fund (SADF) to subsidise scientific researches on agriculture. However, some members of the industrial sector have relayed to me that while the Government proactively implements policies in support of agricultural development, it has turned a blind eye to the gradual decline of local industries. They consider that such a practice is favouritism, with the needs of industries for sustainable development being ignored. In this connection, will the Government inform this Council:

(1) as the authorities have pointed out that the agricultural sector would decline further without active government intervention, and local industries are declining as well, of the reasons why the Government has not implemented measures to actively support the development of industries, e.g. purchasing factory buildings and leasing them to manufacturers;

(2) of the current numbers and areas of farmland in the territory and, among them, the respective numbers and areas of fallow farmland and active farmland, with a breakdown by District Council (DC) districts;

(3) of the respective current numbers and areas of farmland in the territory owned by indigenous residents and non-indigenous residents as well as those owned in the name of a company and, among them, the respective numbers and areas of fallow farmland and active farmland, with a breakdown by DC districts;

(4) of the number of people engaged in farming in the territory in each of the past 10 years, and its percentage in the labour force;

(5) of the value of local agricultural output in each of the past 10 years, and its percentage share in the gross domestic product (GDP);

(6) whether it has made a forecast, with the implementation of the recommendations made in the aforesaid consultation document, of the number of people to be attracted to engage in farming as well as the added value to be contributed to GDP and its percentage in GDP; if it has, of the details; if not, the reasons for that;

(7) of the rationale and criteria for setting the area of the Agri-Park at about 70 to 80 hectares;

(8) how the authorities will select the site for the Agri-Park among the many suitable agricultural lots available; whether they have assessed the locations of the lands which are currently most suitable for development as the Agri-Park; if they have, of the details, together with a list of such lands by DC districts; if not, the reasons for that;

(9) of the conditions, criteria and procedures for land resumption involved in setting up the Agri-Park as well as the amount of compensation per square foot;

(10) whether it has assessed the amount of public money needed for resumption of 70 to 80 hectares of land; if it has, of the details; if not, the reasons for that; whether it will set a ceiling on the expenditure and reduce the area of the Agri-Park when the estimated total amount of compensation exceeds the ceiling;

(11) whether it has assessed the number of years required for recovering the land resumption cost; if it has, of the details; if not, the reasons for that;

(12) of the estimated number of lessees in the first year of commissioning of the Agri-Park;

(13) whether it has assessed if the setting up of the Agri-Park will dampen the development of similar private agricultural projects and result in competition with the private sector for profits;

(14) as the authorities have indicated that farmers interested in operating in the Agri-Park will be subject to evaluation of their capability and capacity to meet the tenancy conditions in terms of production targets and technological requirements, of the details of the evaluation concerned as well as the conditions for meeting such targets and requirements;

(15) whether it has assessed if Hong Kong's current level of agrotechnology is adequate to support the implementation of applying advanced technology in farming in the Agri-Park;

(16) whether it will request local universities to run courses on agricultural studies so as to nurture agriculture-related talents for promoting and implementing the application of advanced technology in farming; and

(17) whether it will lease the farmland in the Agri-Park to holiday farmers or amateur farmers; if it will, of the details; if not, the reasons for that?

Reply:

President,

The local agricultural industry has been diminishing in the course of time as Hong Kong moves towards a predominantly urbanised and service-oriented economy. In recognition of the benefits of sustainable agriculture to society and the growing public aspirations for balanced development of Hong Kong, the Government sees a strong case for adopting a more proactive policy towards the modernisation and sustainable development of local agriculture. This will allow Hong Kong to provide its own good quality agricultural produce on the one hand and promote the development of related industries on the other, bringing greater benefits to the community as a whole.

On December 29, 2014, the Government published a consultation document entitled "The New Agricultural Policy: Sustainable Agricultural Development in Hong Kong" to seek public views on the new policy. The consultation document put forward, among other things, a number of supportive measures which include (i) exploring the feasibility of establishing an Agricultural Park (Agri-Park); (ii) considering the establishment of a Sustainable Agricultural Development Fund (SADF); (iii) strengthening the existing support to help farmers move up the value chain, such as marketing of their agricultural produce and brand building; and (iv) promoting other auxiliary activities related to agriculture such as leisure farming and educational activities for students and the public.

The consultation period will end on March 31, 2015. The Government will take into account the feedback received, and formulate specific proposals and devise the implementation plan subject to the resources available and approval of the relevant authorities.

My reply to the various parts of the question is as follows:

(1) The benefits that sustainable development of agriculture may bring to the community are multi-fold. In recent years, public perceptions about the future development of local agriculture have changed, and people generally agree that agricultural development could bring positive impacts to the sustainable development of Hong Kong. The new agricultural policy has been formulated in response to public calls as well as people's aspirations favouring the balanced development of Hong Kong in future.

On other industries, the Government has put in place many supportive measures, such as the SME Loan Guarantee Scheme, SME Export Marketing Fund, SME Development Fund, Dedicated Fund on Branding, Upgrading and Domestic Sales as well as the Support and Consultation Centre for SMEs of the Trade and Industry Department. These measures have been providing support to various sectors (including the traditional industries) in the areas of financing, communication and enhancement of competitiveness.

Given the limitations on land supply and manpower resources in Hong Kong, we consider that our traditional industries should progress towards high value-added or high technology, such as deploying resources to product development and design, brand promotion and management, and research and development. The Government is committed to rendering support in these areas, including the provision of hardware and software support to promote local innovation and technological development (such as the Hong Kong Science Park and the Innovation and Technology Fund); organisation of various activities and provision of information for enhancing the trade's knowledge about brand development; and the promotion of "Hong Kong brands" and the provision of platforms for Hong Kong enterprises to showcase their products through the Hong Kong Trade Development Council.

(2) The size of active and fallow farmland over the territory by District Council districts in 2013 is listed in Annex 1.

(3) The Government does not keep the information requested.

(4) The number of workers engaged in farming in Hong Kong and its ratio to the total labour force for the period from 2005 to 2014 are listed in Annex 2.

(5) The gross production value of local agriculture and its contribution to Gross Domestic Product (GDP) for the period from 2005 to 2014 are listed in Annex 3.

(6) The proposals put forward in the consultation document will help stabilise the supply of farmland, promote the use of advanced farming techniques and improve financial assistance, allowing farmers to adopt more modernised and diversified production methods with a view to strengthening the development of local agriculture. With the new policy and relevant measures in place, we believe that those who aspire to become farmers will join the industry and the overall productivity of local agriculture will be scaled up gradually.

Based on the proposed scale of the Agri-Park, it is estimated that the value of local agricultural produce will increase by about $200 million. Taking vegetables as the basis for estimation, the overall production capacity is expected to increase by about 25% (approximately 4 000 tonnes).

(7) The main objective of establishing an Agri-Park is to facilitate knowledge transfer in agricultural science and agro-business management for enhancing productivity, thereby increasing local agricultural production. The Agri-Park will serve as a base for experimenting with new agricultural practices for commercial production and promoting the application of advanced technology to agricultural uses, thereby encouraging other farms to develop and adopt modernised and diversified production methods. Moreover, eligible farmers displaced by development projects on Government land may re-establish their farms in the Agri-Park. According to our preliminary idea, the area of the Agri-Park will be in the range of 70 to 80 hectares (about one-tenth of the size of the farmland currently under active farming), which enables us to achieve economy of scale and ensure that the Agri-Park will be viable in meeting its objectives.

(8) The Government has set out in the consultation document the conceptual plan of setting up an Agri-Park. The Government will take into account the views of the relevant stakeholders, the public and the Legislative Council and further suggestions collected during the consultation period before deciding whether to proceed with its implementation and formulate an implementation plan. There is no concrete proposal for the potential site at present.

As mentioned in the consultation document (paragraph 4.9), in identifying the potential site for the proposed Agri-Park, the Government is looking to farmland which is zoned "Agriculture" in existing statutory plans but largely remains fallow, and which would be basically ready for starting agricultural activities. The area should be relatively unspoiled, with soil and water quality favourable for agricultural purpose, and provided with the essential and operational agricultural infrastructure, such as access footpaths and irrigation channels. The site may consist of fallow farmland and some active farmland. To achieve economy of scale and the objectives of the Agri-Park, the site should be of sufficient size.

(9) to (11) Much of the farmland in the territory is privately held and ownership is usually fragmented. As proposed by the Government in the consultation document (paragraph 4.14), if the initiative of setting up an Agri-Park in Hong Kong is to proceed, the lots concerned will be acquired through land resumption pursuant to the Lands Resumption Ordinance (Cap. 124).

If the Agri-Park is to be set up through the resumption of private land, the Government will offer ex-gratia or statutory compensation to the land owners in accordance with the existing policies and relevant legislation as applicable. The amount of compensation will be calculated by the relevant department on the basis of the applicable rate at the time of making the compensation and the relevant compensation zones. The compensation rate is regularly updated under an established mechanism. Land owners who do not agree with the amount of compensation may make their claims to the authorities concerned under the existing mechanism, including referring their cases to the Lands Tribunal for determination of statutory compensation.

The Government has outlined the conceptual plan for setting up the Agri-Park. Whether this will proceed as suggested, the size of it and whether the lots concerned will be acquired through the resumption of private land are issues that will be further considered after the consultation period. We will take into account the views received when finalising the proposal. If this is implemented, the Government will seek funding approval by the Legislative Council in accordance with the established procedure.

(12) At present, the average size of a farm in Hong Kong is 0.2 hectare only. Based on this, the Agri-Park (of a size of 70 to 80 hectares) can accommodate several hundred farmers. As currently active farmers will be allowed to carry on farming in the Agri-Park and there will be a need to accommodate farmers affected by development projects, we estimate that around 100 tenants may operate in the Agri-Park in its first year.

(13) The Agri-Park is intended mainly for farmers engaged in crop farming and commercial production. It will serve as a base for experimenting with new agricultural practices for commercial production and promoting the application of advanced technology to agricultural uses, and for demonstration of feasible modes of modernised and diversified production. The Agriculture, Fisheries and Conservation Department (AFCD) will assist other farmers through experience sharing and knowledge transfer. AFCD will help improve agricultural infrastructure and strengthen marketing and brand building for local agricultural produce, thereby bringing benefits to the farming community as a whole.

(14) According to our current proposal, the Agri-Parkt will be put under the management of AFCD. The land will be leased to farmers who are interested in crop farming and commercial production. AFCD will lay down terms and conditions, as well as the management and appropriate control measures in the tenancy agreements entered into with the tenants. For example, AFCD may state in the tenancy agreements the agricultural activities that tenants should pursue. Tenants are required to present an annual production plan indicating the production method to be adopted and the crops to be grown. AFCD will evaluate the tenant's capability and capacity to meet the tenancy conditions in terms of production targets and technological requirements, and on this basis, the tenants will have to participate in a competitive bid with other farmers intending to operate in the Agri-Park.

On the other hand, AFCD will also impose conditions in the tenancy agreements for the farmland, requiring farmers to achieve a reasonable production output. AFCD will conduct regular inspections, provide technical support for those who are unable to achieve the target and record in detail the production condition for follow-up actions. For farmland left idle, the tenancy agreements concerned may be terminated or will not be renewed, or the size of the farmland will be reduced. The imposition of the relevant terms and condition and production targets is to ensure that the farmland of the Agri-Park is put to productive use, achieving the objective of setting up the Agri-Park in the first place, namely promoting and upgrading local agricultural production.

(15) There exists room for improvement in scientific research on agriculture in Hong Kong. Therefore, under the new policy, we have proposed establishing a Sustainable Agricultural Development Fund (SADF) to support research on agriculture and manpower training, with an aim of implementing modern technological farming in the territory.

(16) The proposed SADF to be established under the new policy would provide financial support for tertiary and research institutions to conduct applied studies in the local context on such areas as farming systems, production management skills and primary pests in crops. Subsidies may also be provided from SADF for relevant farming skill training courses, obtaining assistance from specialist researchers to solve technical problems and train young professionals in farming as well as promoting the application of modern technology to agriculture in the territory.

(17) The main objective of establishing the Agri-Park is to facilitate knowledge transfer in agricultural science and agro-business management with a view to enhancing productivity, and to increase local agricultural production. The Agri-Park will also serve as a base for experimenting with new agricultural practices for commercial production, promoting and demonstrating applications of advanced technology to agricultural uses, thereby encouraging other farms to develop and adopt modern and diversified production methods. Therefore, the Government has no plan to lease the farmland in the Agri-Park to holiday farmers or amateur farmers.

Ends/Wednesday, January 21, 2015
Issued at HKT 17:07

NNNN

LCQ16 Annex