Hong Kong's agricultural industry focuses mainly on producing quality fresh food crops through intensive land use. Farming is done largely in the New Territories but only two per cent of the land there is being used for growing crops which comprises mainly vegetables and cut flowers, whose combined output was valued at about $258 million in 2006. Pigs and poultry are the principal animals reared for food and the value of locally reared pigs was about $585 million, while that of poultry, including chickens and pigeons, was worth $340 million.

The local agricultural industry has to adapt to fast-changing market trends to achieve sustainable development, constrained by the limited supply of farm land and labour, competition from imports, the cost of maintaining high environmental standards and calls for improved farm hygiene and safe produce. The AFCD encourages crop farmers to tap niche markets and to sharpen their competitiveness by cultivating safe, good quality vegetables. The department works with local organic farming organisations and the Vegetable Marketing Organisation to promote organic farming and to develop a market for organic vegetables. The department provides an organic farming support service to some 75 farms which are located on 34 hectares (ha) of land. The AFCD also promotes the use of greenhouse technology for intensive high-value crop production. During the year, two rich varieties of vegetable — green flesh rock melon and mini red watermelon — were introduced to farmers to cultivate in Hong Kong.

The voluntary Accredited Farm Scheme managed by the AFCD and the Vegetable Marketing Organisation since 1994 is designed to provide a stable supply of high quality, safe vegetables. A total of 215 farms spread over 1 855 ha of land have so far been accredited under the scheme. The organisation continues to use a 'Good Farmer' cartoon logo to promote accredited produce.

In June 2006, the Government introduced a voluntary surrender scheme for pig farmers and live pig transporters to reduce the number of local pig farms and environmental pollution caused by them. Under the scheme, pig farmers are granted ex gratia payments or loans for surrendering their livestock licences or terminating their farm business. Pig transporters may apply for loans to convert their vehicles for other transport business. Operators have one year in which to decide whether or not they want to take part in the scheme. As at December 31, 2006, the Government had received 101 applications from pig farmers to join the scheme.