Replies to LegCo questions

LCQ14: Accredited Farm Scheme

Following is a question by the Hon Andrew Cheng and a written reply by the Secretary for Health, Welfare and Food, Dr York Chow, in the Legislative Council today (July 12):

Question:

Regarding the Accredited Farm Scheme jointly run by the Agriculture, Fisheries and Conservation Department (AFCD) and the Vegetable Marketing Organisation (VMO), and the charging of commission from vegetable wholesalers by the VMO, will the Government inform this Council:

(a) of the qualifying conditions for applying to join the Accredited Farm Scheme;

(b) whether the fruits and vegetables produced by accredited farms are required to be marketed by the VMO; if so, of the reasons for that;

(c) whether local and Mainland farms invested and operated by Hong Kong people are allowed to join the Scheme upon application, and enjoy the exemption that the vegetables produced by them are not required to be marketed by the VMO; if not, the reasons for that; and

(d) whether it knows the total amount of commission charged by the VMO from vegetable wholesalers for the use of its facilities and services in each of the past three years?

Reply:

Madam President,

(a) Applicants must meet the following eligibility criteria in order to join the Accredited Farm Scheme:

(1) They must be permanent residents of Hong Kong who operate vegetable farms in Hong Kong or Guangdong province;

(2) Vegetables produced by their farms must be marketed through the VMO for consumption of Hong Kong people; and

(3) They must adopt good horticultural practices and follow the technical advice of the AFCD in farming vegetables.

(b) The Accredited Farm Scheme is an agricultural development project launched by the VMO. Under the Scheme, the AFCD offers technical advice to farmers whilst the VMO tests their vegetables for pesticide residues prior to harvest to ascertain that they meet the required standard. Before distributing the farm produce to accredited retailers approved by VMO (including vegetables stalls in markets and supermarkets), the VMO will conduct another spot check on accredited vegetables to ensure that the amount of pesticide residues is in compliance with standard required for safe consumption. Therefore, all participant farms of the Scheme must sell its vegetables through VMO.

(c) Through its Cheung Sha Wan Wholesale Vegetable Market, VMO provides a fair and efficient trading venue for farmers. It also provides marketing services for vegetable vendors, such as transport, baskets for vegetables, transaction platform and bad debt recovery service. The VMO also checks the pesticide residues for farmers to ensure that the vegetables distributed through its channels meet the safety standard and thus enhance confidence of its customers in the vegetables it marketed. Under the monitoring mechanism of Accredited Farm Scheme, VMO would conduct spot checks on accredited produce to test for pesticide residues and distribute the vegetables for sale through its accredited retailers. The inspection and tests are part of the quality assurance service provided for farmers and the costs would be wholly covered by the commission that VMO charged for sale of vegetables. Therefore, VMO cannot allow farmers that do not sell vegetables through its channels to join the Accredited Farm Scheme.

(d) VMO is a statutory organisation run on a self-financing and non-profit basis. It provides various marketing services to farmers by charging commission on sale of vegetables. It has ploughed back the profits accumulated over the years into local agriculture by setting up Agricultural Development Fund, scholarships and loan funds to finance agricultural studies and development programmes; facilitate agricultural land rehabilitation; improve infrastructure for agricultural land; provide capital for farm operation and infrastructure; subsidise training courses in agriculture and encourage offspring of farmers to pursue further studies, etc. The commission charged for vegetable sale varies from 6% to a maximum of 10%, depending on the service option chosen by the vendor. The following shows the total annual amount of commission earned over the past three years:

Financial Year     Revenues from Commission
2003/2004             $51,200,000
2004/2005             $52,000,000
2005/2006             $53,000,000

The revenues from commission are usually just enough to cover daily operational expense of the VMO, including the provision of transportation and transaction platform, etc. as well as checking pesticide residues.


Ends/Wednesday, July 12, 2006
Issued at HKT 12:48

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