Farmer in rice field carries grass on his scooter (Thailand)

Indonesia / Thailand / Viet Nam South-East Asia: Agricultural business brings sustainable rice from the field to the supermarket

East Asia
GIZ
Classic
Agriculture & Food
Sustainable supply chains

For Viet Nam, Thailand and Indonesia, rice is essential for ensuring self-sufficiency and an important export for Viet Nam and Thailand. In order to cater to the substantial rise in demand internationally for high-quality rice produced under fair conditions, both its cultivation and processing need to become more efficient and sustainable. In their joint project, the global agri-business Olam Agri and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH are endeavouring to make the region’s value chain more environmentally, economically and socially responsible. To do this, they are taking a holistic approach in which they support smallholder farmers while developing long-term relationships with government authorities, research bodies and financial institutions. The German Federal Ministry for Economic Cooperation and Development (BMZ) is funding this collaboration as part of its develoPPP programme.

As a market leader in the global rice industry, Olam Agri wants to bring sustainably produced rice that meets international standards to the European market. It therefore needs to constantly ensure and improve the strength and reliability of its supply, as well as the quality and quantity of the product. Before the project was launched, the company could only source a negligible amount of high-quality rice from the smallholder farmers that predominately grow it. Farming families struggled to generate enough profit, and only few were able to invest in high-quality seeds and machinery. They also lacked the necessary expertise to apply sustainable and efficient processes. To make rice into a solid foundation upon which these producers can establish their livelihoods, they needed access to knowledge, advice, networks, services and markets.

The partners made use of the budget of approximately EUR 11 million from 2018 to 2022 to develop a supply chain for sustainable rice that is based on the needs of the market and provides a secure income for the farmers. They used a variety of measures to do this:

  • Developing a broad range of training opportunities for farmers that teach economic skills as well as sustainable agricultural practices. In cooperation with the countries’ ministries of agriculture and the environment and banks, they were provided with easier access to advice and financial services.  
  • Rating rice production according to the Sustainable Rice Platform e.V. (SRP)* quality standards.
  • Building an interregional network of public and private actors in order to mainstream and scale up the standards established in the course of the project on the ground over the long term. 

Olam Agri manages expertise with regard to international supply chains, rice processing and data gathering, while GIZ brings experience and networks from other rice projects in the region to the table. 

 

*The Sustainable Rice Platform e.V. (SRP) was co-convened in 2011 by the International Rice Research Institute (IRRI), the United Nations Environment Programme (UNEP) and GIZ. Today, it is an independent association with its own quality seal and more than 100 members from the public and private sectors, as well as research institutions and NGOs. ↗ https://www.sustainablerice.org/
‘Our project with GIZ has enabled us to provide food producers and retailers with access to sustainably grown rice. It meets the highest international food safety standards and can be traced back to the flourishing farmers in Southeast Asia.’
Paul Nicholson, Vice President Rice Research & Sustainability at Olam Agri
People are waving on the rice field (Thailand)
Smallholder rice farmers from Ubon Ratchatani, Thailand, at the field of a farmer who collaborates with GIZ and Olam Agri on making his farm more resilient and sustainable. Photo: © Olam Agri Ltd.
Farmer with rice bowl stands in front of roll-up
Smallholder farmer presents sustainably produced rice from her farm. Photo: © GIZ/Saya Chuenudomsavad

Over 35,000 farmers have been trained in environmentally friendly agricultural practices and business-related topics. This has reduced the greenhouse gas emissions in Thailand’s pilot provinces by an average of 21 per cent and increased the farmers’ incomes by more than 20 per cent. The development of long-term business relationships between producers, processors and retailers bolsters the reliability and efficiency of the rice supply chains in South-East Asia. At the same time, buyers like Olam Agri benefit from higher-quality rice. Thanks to the work of the project partners, they can now offer European customers guaranteed quantities of certified rice.

A further EUR 4 million in funding was provided to the project by the United Nations Environment Programme (UNEP) on the back of these successes. Using a holistic approach designed to improve the entire ecosystem in the two target provinces, the aim is to address a further 45,000 farmers (50 per cent of them women) by 2027 while at the same time cutting carbon dioxide (CO2) emissions by three tonnes.
 

DEVELOPMENT SUCCESSES

Stacked coins

≥ 20 per cent higher income for around 35,000 farmers 

Approximately 8,600 rice producers certified to the SRP standard

Trees

Average 21 per cent reduction in greenhouse gas emissions

BUSINESS SUCCESSES

Olam can supply guaranteed quantities of rice certified to international standards

High-quality and sustainably produced rice can be purchased in much greater quantities

Woman working at a loom

develoPPP Classic

develoPPP Classic is aimed at medium-sized and large companies that want to invest sustainably in a developing or emerging country and expand their operational activities locally. Suitable projects receive technical and financial support of up to two million euros in public funding.

Logo Olam Agri

Olam Agri

Olam Agri is a global agri-business with trade flows of more than 38 million MT in volume traded annually. It has a presence in more than 30 markets, employs over 9,600 employees, and its products and services span grains & oilseeds, integrated feed & protein, rice, edible oils, specialty grains & seeds, cotton, wood products, rubber and commodity financial services. It is a fully owned subsidiary of Olam Group. 

Logo GIZ

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

GIZ is a federal enterprise operating in international cooperation for sustainable development and education work for over 50 years. GIZ supports economic development and employment and works with companies to develop strategies for sustainable business development.

Paul Nicholson Vice President Rice Research & Sustainability Olam Agri
Daniel May
Daniel May Project Manager develoPPP Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH