Although rice is a diet staple for many in Asia, the harvesting of the crop is fraught with many challenges, including decreasing yield productivity due to the effects of climate change and the pressure to meet the rising demand for food as the world’s population continues to grow.
While the production of rice is traditionally known to be both a water guzzler and a high emitter of greenhouse gas emissions, it also holds the key to reducing global emissions.
What then, are the solutions to ensuring the responsible production of this ubiquitous crop?
According to Chris Argent, head of business sustainability, Asia Pacific, at international agribusiness Syngenta, climate-friendly farm management practices for rice currently exist. Some climate-smart solutions include laser-land levelling and the alternate wetting and drying system (AWD), which reduces water use and greenhouse gas emissions while optimising the use of inputs.
There are many trained farmers who understand sustainable agricultural practices, but the moment the support from the development grant ends, that mentality ends.
David Chen, co-founder, Golden Sunland, and CEO, Agrig8
But the challenge is encouraging farmers to adopt these new practices and technologies. Rice is primarily grown by smallholder farmers, whose returns are relatively low, averaging just about US$2-6 a day. Solutions aren’t lacking, but the focus now needs to be on increasing the affordability and scalability of these existing solutions.
Before jumping ahead though, it is important to have an intimate understanding of farmers’ immediate needs, suggested David Chen, co-founder of Golden Sunland and chief executive officer of agriculture fintech firm Agrig8.
Pre-pandemic, Chen spent around 60 per cent of his time in the rice fields, interacting with farmers to understand what their pain points are and what solutions are needed. To increase farmers’ access to finance, Agrig8 focuses on connecting smallholder rice farmers with lenders.
With farmers’ means of support being top of mind, positioning climate-smart agriculture solutions as directly beneficial to farmers’ livelihoods is necessary to get greater engagement.
“We need to modify the information to fit the realities that farmers face. Instead of saying that saving water is good for the environment, explain how these practices would help improve yields and productivity,” said Ladda Viriyangkura, advisor for Sustainable Rice Platform (SRP), GIZ Thailand.
Established more than 10 years ago, SRP’s aim is to improve smallholder livelihoods, reduce the social and environmental footprint of rice production, as well as offer the global rice market an assured supply of sustainably produced rice through their label.
Tailoring solutions for smallholder farmers
“Agriculture is inherently local—the climate, type of soil, topography, pests, all play a role in agriculture. Solutions have to be tailored based on each situation,” said Argent.
Establishing trust among farmers is another key piece of the puzzle, and this can be done by working closely with farmers’ associations and investing in demonstration farms to “show by doing”, said Chris Stevens, director, global agribusiness, Kellogg Company, a foods firm.
Irrespective of the type of crop, he has found changing farming practices to be particularly tough as these practices are an integral part of farmer culture and have been passed down through generations.
“We invest in educating and training farmers because that’s how we spread the word and give them access to new technologies and ideas,” Stevens said. For example, Syngenta and Kellogg’s are working together to run demonstration farms in Thailand to showcase the benefits of crop protection. While it’s a relatively small project, they have found success in the focused project of around 2,000 farmers on 5,000 hectares of land in Thailand.
To get farmers on board for the Sustainable Rice Platform, Viriyangkura observed that providing incentives for early adopters is crucial. “In my experience, developing incentive mechanisms to raise farmers’ interest is key to getting the initial number of farmers to join the programme.”
“We have demonstrations for local practices in the farmers’ fields and conditions, and create specific training to learn about the new technologies. Incentives should be in place but accompanied by explanations and comparisons about the benefits of following sustainable production practices. All of this takes time and a systematic approach to sustainable practices, alongside sufficient staff to work closely with the farmers,” she added.
Increasing access to finance
Funding poses another huge barrier to the adoption of climate-resilient technologies, as farmers’ primary concerns are making ends meet and feeding their families.
“Right now, a lot of the funding that is transforming the smallholder farming sector comes from developmental funds, which is ultimately not sustainable. There are many trained farmers who understand sustainable agricultural practices, but the moment the support from the development grant ends, that mentality ends,” said Chen.
“So we need to have a more efficient use of developmental funds, together with a blended finance product with green mandates,” he added. These funds should bridge the initial capital gap that farmers have in order to introduce the new technologies, but farmers should be financially sustainable beyond that.
While the conversation has been about farmers’ struggles, there should also be acknowledgement of the knowledge gap of the capital providers, said Chen. “Globally, financial institutions have yet to efficiently assess and accurately appraise farmers as borrowers. But with the right data and insights, lenders could radically transform the sector and make it more sustainable.”
In some countries, the legal lending rate for micro-finance institutions is as high as 30 per cent, but there are real challenges for the last mile service delivery and risk management, which adds to the cost of loan origination, he added.
The biggest problem is trust, said Chen. “Logically, the multi-debtor circumstance creates a vicious debt spiral for the farmers. But it is hard for these farmers to break away from informal lending even when formal lending can fulfil their complete loan requirement.”
“It has always been easier to trust neighbours who come to your aid quickly, with flexible terms. If we approach this problem with a tech-priority approach, it does not work. Honestly, nothing beats trust-building through communication. For a young startup like us, we may not be able to provide this level of attention to every farmer we come across, which is why we need to leverage on partners whom farmers trust,” he added.
Should additional costs be borne by consumers or corporates?
Instead of farmers bearing the full cost of shifting to climate-smart agriculture, perhaps the cost could be transferred or shared downstream, suggested Chen.
“We could go down the value chain and identify beneficiaries of such climate solutions. For example, does it benefit consumer-facing actors who could sell the final product at premium? Or does it fulfill lenders’ climate mandates? If downstream value chain actors benefit mutually, it is sensible to pass the cost down,” said Chen.
But unlike high-value crops such as fruits and vegetables, rice has its own unique set of problems as consumers in Asia are less likely to pay a premium for sustainable rice, observed Argent.
Efforts therefore have to be channelled into involving and educating consumers about the importance of sustainable rice.
Stevens said: “The pull in any of this comes from the consumer. And if we don’t recognise that the consumer plays that role, then we lose the supply chain. The consumer pulls on the retailer, who pulls on the manufacturer, who pulls on the miller, who pulls on the farmer. If you don’t create that flow up through the supply chain, it doesn’t work.”
Collective effort and focused partnerships among government, businesses, academia and farmers are key to solving this mammoth task.
“The scale and scope of the issues we’re looking at demand focused partnerships. This means that we need to zoom in to the issue and figure out the pain points of the specific group of farmers that you’re trying to reach out to,” said Argent.
Projects and partnerships with the public and private sector are also essential to accelerating the adoption of the latest technologies in rice production.
Lastly, open-minded discourse between governments and other stakeholders will help make science-based decisions, urged Argent. “It’s important to find ways to do things better and be open to new ideas.”