Local agriculture is directed towards the production of high-quality fresh food crops through intensive land use. Farming is largely undertaken in the New Territories and just 2 per cent of the land area is under cultivation. Overall, the most common crops cultivated are vegetables and cut flowers, and production was valued at about $296 million in 2004. Pigs and poultry are the principal animals reared for food and the value of locally produced pigs amounted to $538 million and that of poultry, including chickens and pigeons, to $287 million.

As a result of limited supply of farm land and labour, competition from imports, raised environmental standards and calls for improved farm hygiene and safe produce, the local agriculture industry has to adapt rapidly to sustain its long-term development.

The AFCD encourages crop farmers to target specific niche markets and enhance their competitiveness by cultivating safe and quality vegetables. The department has cooperated with the local organic farming organisations and the Vegetable Marketing Organisation to develop organic farming and the market for organic vegetables in Hong Kong. So far, farmers from four local farming districts have joined the Organic Farming Conversion Scheme. The AFCD also promotes the use of greenhouse technology for intensive high-value crop production. During the year, two improved vegetable varieties suitable for local production — golden sweet corn and broccoli — were introduced to farmers for production.

The voluntary Accredited Farm Scheme operated by the AFCD and the Vegetable Marketing Organisation aims to supply clean and safe vegetables. This programme has continued to expand with an additional seven farms accredited. The organisation continued to use a 'Good Farmer' cartoon logo to promote accredited produce.

Under the terms and conditions of land grant, a farmer who wishes to build agricultural structures such as greenhouses, livestock sheds, hatcheries, fish ponds and store rooms, on leasehold agricultural land must apply to the Lands Department for a Letter of Approval for Agricultural Structures. To facilitate farmers to apply, AFCD has sought the agreement of the Lands Department to act as agent for them and provides a one-stop service for farmers. During the year, the department assessed 12 applications.