S’pore farms brace themselves for rise in costs due to Mid-East war, will keep prices steady for now

An SFA spokeswoman told ST that farms can buy eligible energy-efficient equipment and technologies by leveraging the Agri-food Cluster Transformation Fund 2, which aims to support farms in the adoption of new farming technology through co-funding.

“This will help farms improve energy efficiency, and manage production costs and strengthen long-term resilience,” she said. 

SFA will continue to monitor the situation and provide the necessary assistance to farms, said the spokeswoman, in response to ST’s queries on how farms may be impacted by the expected increase in electricity prices. 

The conflict in the Middle East is nudging up oil and gas prices globally. This increase is expected to be reflected in the next round of electricity tariffs for the second quarter of the year, which will be announced at the end of the month. 

Artisan Green’s Mr Poh said electricity is one of the primary cost drivers for indoor farms. His farm grows a range of crops, such as baby spinach, lettuce, herbs and microgreens.

“Electricity for lighting and cooling accounts for a significant portion of our operational costs,” he said. “Beyond energy, we are also anticipating upward pressure on input costs such as fertilisers, which could further compound operational expenses.”

He added that the farm’s new site at Sungei Tengah has several measures to reduce energy consumption, such as adjustable lighting and a centralised chilled water system. “We will be deploying solar panels as part of our broader efforts to offset energy consumption and manage long-term energy costs,” Mr Poh added.

Mr Tham of Tomato Town said his farm grows crops naturally suited to Singapore’s warm climate, such as basil and tomatoes. This eliminates the need for cooling systems, which tends to be one of the biggest energy costs in indoor farms, he added. 

“Instead of adopting expensive ‘high-tech’ solutions, we focus on appropriate technologies and crops that match Singapore’s environment. This avoids unnecessary energy consumption from over-engineered systems,” he said.

He added that the farm’s aeroponic systems, where a nutrient solution is misted onto free-hanging plant roots, are built to function with a limited electricity supply.

As a result, their energy consumption remains low, and the farm does not foresee a significant increase in electricity costs or immediate price hikes for their produce due to rising energy costs, Mr Tham said.

While installing solar panels can help to offset part of the farm’s electricity use, the farm remains focused on choosing crops and systems suited to the local climate, he said. 

At The Fish Farmer, which produces a range of fish such as red snapper and barramundi, Mr Ong said he is expecting the cost of fish feed to increase, as the farm imports most of its feed from Malaysia and Vietnam, which is delivered by truck or ship.

“We expect the price to go up because some of the suppliers have already given us some indication that during the next round of delivery, they’ll have no choice but to increase the price,” he said.

As the increase in feed prices will affect not only The Fish Farmer but potentially other farms as well, Mr Ong said he hoped that the Government could help the farms cope with the cost increases, such as coordinating bulk purchases of fish feed across the aquaculture farms. 

While the farm hopes to avoid raising the costs of its products, Mr Ong said he may have no choice but to do so unless measures are put in place to help reduce operating costs.

“We are trying our best to manage, but it’s going to be tough.”