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Rice Inc's Sustainable Supply Chain for Sustainable Rice Farms in Bago

To create sustainable agricultural villages powered by a sustainable and efficient supply chain.

Photo of Lincoln Lee
5 3

Written by

Lead Applicant Organization Name

RICEINC UK LTD

Lead Applicant Organization Type

  • Small company (under 50 employees)

If part of a multi-stakeholder entity (i.e. team), provide the names of other organizations and types of stakeholders collaborating with you.

Hult Prize Foundation and the United Nations Office of Partnerships International Rice Research Institute UCL Innovation and Enterprise Ernst & Young Foundation

Website of Legally Registered Entity

https://www.riceinc.com/

How long have you / your team been working on this Vision?

  • 1-3 years

Lead Applicant: In what city or town are you located?

London

Lead Applicant: In what country are you located?

United Kingdom

Your Selected Place: what’s the name of the Place you’re developing a Vision for?

Bago District an administrative district of Myanmar, occupies an area of 2,909 km^2

What country is your selected Place located in?

Myanmar

Describe your relationship to the place you’ve selected.

Our initial vision for the project was to tackle the problem of wastage of rice simply by creating a sustainable drying service by using rice-husk fuelled dryer to help smallholder farmers dry their rice. This was because nearly 30% of all the rice loss in the world could be attributed to unsustainable sun drying practices farmers use around the world. However,  as we consulted industry experts to asses which country could benefit the most, who then pointed us to Myanmar as a potential site of collaboration.

We spent around a month in the township of Letpadan, bonding with the locals and getting to know the situation better, becoming friends with many of the villagers, and even the mayor. We partook in the their local celebrations, culture and even had a minor injury within their villages and had to be treated with traditional medicine. This led to us feeling a deep spiritual connection to this place as outsiders were rarely accepted into their community to the extent that we did. 

This place is especially important to us because speaking to the locals, we realized that they are more than ready to accept change and transform the food system they are currently involved in. They were knowledgable about the challenges they face and are willing to support organisations that would like to help them. 

Describe the People and Place: Provide information that would be helpful for an outsider who has never been there and may have no context about this Place to better understand the area.

Bago District is a predominantly Buddhist district of Myanmar. Under the district, there are seven townships, which contain up to 200,000 people. Each township is home to 28-30 villages, which are centred a single town. This results in a significant urban/rural divide: the 2014 Myanmar Population and Housing Census recorded the urban population of Bago District to be 26.2% - this was the last available report published by the government. This disparity is also clearly apparent in the lifestyles of the people; our firsthand experience found that the locals still rely heavily on traditional medicinal cures and live in either brick or wooden huts. The only concrete buildings can be found in the towns, where medical access is also limited- the clinics available in our area didn't even have a system for producing receipts. 

With a smartphone penetration rate of 80%, these villages have access to the Internet, though unreliable. Many of them are active on social media websites. This allowed them to make informed decisions which shaped our approach to helping them - they knew what sort of technology they needed to improve their livelihoods, such as rice dryer. They merely lacked the capital and technical expertise to make it happen.

The tropical climate of the region means that the average annual temperature in Bago is 23.2 °C | 73.8 °F. The annual rainfall is 1619 mm | 63.7 inch. The area is mostly paddy fields, save for uncultivated jungle.

The local cuisine is influenced by the countries' position between India and China, resulting in spicy, oily foods. The diet of locals is mainly rice and vegetables, with fish being the favoured source of protein. Some farmers alternatively choose to raise pigs and chickens as an alternative source of protein. Independent studies found the prevalence of underweight in Myanmar in 2015 was 14.1%, overweight 28.1% and obesity 13.1%

As a district with many villages, farming is the primary occupation in the region with rice being the dominant crop. These villages have a longstanding tradition of farming rice, with ingrained traditions of harvest festivals. Each household has all members of the family contributing to the farming process, from wives to children. There is a very strong communal spirit in these villages, where it is the social norm for villagers to pitch in for both funerals and weddings.


What is the approximate size of your Place, in square kilometers? (New question, not required)

2909

What is the estimated population (current 2020) in your Place?

1770785

Challenges: Describe the current (2020) and the future (2050) challenges that your food system faces.

The current challenges  in this food system stem from an unsustainable manner of life. Due to the nature of their predominantly farming lifestyle, many farmers are reliant on micro-finance loans to sustain their families outside of harvest seasons. The short-term nature of the loans forces these farmers to incur additional loans with higher rates of interest. Moreover, they often have to take out these loans to obtain capital for farming. The harvest season does not alleviate these financial issues of the farmers. Without proper access to capital to expand operations, farmers often rely on outdated methods to prepare the grains for sale such as sun-drying rice, leading to a loss of up to 30% of rice grains during the production process. When the rice itself is sold, farmers go through multiple layers of administrative barriers due to a lack of policies against middlemen or policies to ensure an integrated supply chain in the region. They are forced to rely on middlemen who in return, sell the rice to millers who will then sell the rice to traders which then sell to exporters or local shops. These middlemen take advantage of the harvest season to lower their prices because of the market glut, further reducing the potential revenue of these farmers. Without an integrated supply chain, these farmers lose up to 50% of potential profit to the overly-bureaucratic system. When speaking to some farmers, in the worst cases during a bad harvest they fail to earn enough to even buy rice from mills which used rice made on their own farms. This has led to some farmers resorting to subsistence farming to survive.


By 2050, we expect the Bago district to experience an even more drastic situation. At present, locals have mentioned that their children don’t want to work in agriculture because they think it’s too hard work for too little money. They perceive moving to the cities and working there as a preferable alternative. In the future, this extent of rural depopulation is predicted to cripple the food security of Bago further. With less people to work in the fields, the production of rice will decease, in a world where the UNFAO estimates that global food production needs to grow by 75% annually instead of 0.9% per year. As the UNFAO currently predicts that by 2033 we will feel the effects of having insufficient food production, it will be the people of Bago who will feel this effect the harshest, already struggling to survive in their current situation. An additional consequence of the predicted rural depopulation will be the loss of culture and traditions which the agricultural societies of Burmese villagers have long centered themselves around. 

Address the Challenges: Describe how your Vision will address the challenges described in the previous question.

Our vision aims to tackle current challenges by creating an integrated, sustainable supply chain for rice farmers in Bago. RICEINC tackles the issue of the supply chain on several levels. At the smallest levels we supply rice-husk fuelled dryers to villages in Bago, charging them a small nominal fee to use the dryers to dry their rice, much like how one would use a laundromat to wash and dry clothes. This reduces the amount of rice lost, allows farmers to earn more by having a larger quantity to sell.Furthermore, the rice processed is of a higher quality which fetches a higher price on the market. Finally, this reduces the carbon output from the wasted rice.




We are also simultaneously constructing an international brand under Rice Inc, to sell rice abroad for the purpose of reinvesting the profits from these sales into creating our own sustainable and ethical supply chain. Current trials have us investing 80% of our profits into villages we have partnered with in the Letpadan township of the Bago region. For now, we are investing heavily into developing scaling our rice dryers in all the villages of Bago. However, to create a supply chain that truly sustainable we will then be moving up and downstream of the supply chain. We would go into things like installing better irrigation systems and fertilizers for the farmers. We would also seek to produce more eco-friendly mills to process their rice. This is so that one day, the entire supply chain would be ethical through providing fair prices for the hard work of the farmers yet efficient and by having zero wastage. Finally, there would be a focus on renewable technologies such as our biomass powered dryer to ensure a sustainable supply chain for the environment.




We would construct a smartphone-based network to connect farmers with millers who we would partner with to become sustainable millers. Smartphone penetration amongst rural farmers stands at 80%, therefore allowing for mobile apps to have massive potential. Our rice brand Rice Inc would handle the exportation of rice, therefore allowing farmers to obtain a better price for their goods, whilst remaining sustainable.


Replacing the supply chain of rice farming on all levels requires funding and partnership with local stakeholders, such as mills. So that we can make the process of farming and selling rice much more profitable and sustainable, we hope to be able to reduce rural depopulation by making farming a much more attractive options to the Burmese youth. Making the way of life as a farmer a sustainable way of life, will allow the culture of rice farming communities to be preserved as an additional side effect.By creating an integrated supply chain, we reduce wastage of rice, in return contributing to better global food security. Most importantly, our current model aims to empower farmers to get fairer prices for their products by cutting out middlemen.

High Level Vision: With these challenges addressed, now provide a high level description of how the Place and the lives of its People will be different than they are now.

With the issues of an integrated supply chain resolved, farmers can expect to practically double their revenue by wasting less rice and from not having to deal with unethical middlemen who would charge them much lower than market rate. Their children would be able to afford and education, and possibly see a possible, more sustainable future in making a career out of agriculture, or at the very least being able to have it as a side-income.

To describe how it would be different from what they would otherwise suffer from, I'd like to share a case study we encountered with our dryers below:

During our first trials of our rice-husk powered dryer, a woman was waiting for us during one of our site inspections. This woman was a single mother who's rice harvest was too wet - were it not for our rice dryer, she would have been without income for six months. She waited while her rice was drying to personally thanks for the fact that she'd be able to sell any rice at all, which meant being able to pay for her daughter's school fees in addition to feeding her family.

This is the sort of impact we hope to have for Bago and its rice farmers.

Full Vision: How do you describe your Vision for a regenerative and nourishing food future for your Place and People for 2050?

Creating a nourishing and regenerative food future for the rice farmers of Bago relies upon being able to empower these farmers to pursue an ideal of sustainability and living standards which they want. To this we must reform the system they operate in from several different angles.

During our month-long stay in Myanmar, we spent time interviewing the locals, having several town hall meetings and joining them for celebrations. From this, we understood their needs - one village we spoke to had long had their eyes on an industrial dryer, but lacked the capital to make such a purchase. The locals were the ones who shared their experience of exploitation by middlemen and millers who took advantage of the market glut during harvest season. 

We provided them a rice-husk fuelled dryer, which uses rice husks to create heat, with an electric fan spreading the heat throughout a flat bed dryer which can accommodate 5 tonnes of rice in one batch. This reduces the amount of rice wasted from 20-30% to nearly 0. At its current implementation, we install one dryer in each village we operate in, charging a small nominal fee for farmers to use the machine, much like how one would use a laundromat to wash and dry their clothes.

The amount of electricity needed for the drier is minimal: plugging it into an power outlet. Realistically, this means that a power source with enough power must be found to, which can be done through renewable methods such as solar energy generators - this is especially possible in an Asian climate where the number of hours of daylight are consistent, and villagers with smartphones would be able to reach out to us through channels such as social media. In more remote villages, this would be a necessity to ensure such a dryer was kept running, but in more advanced areas with better access to electricity the voltage would suffice. More importantly, the smart phones can hold videos or guides to refresh the memories of any villager tasked with maintaining the dryer, something especially possible in a community with such a strong communal mindset. 


On the macro scale, our vision will ultimately require us to compete with near-monopoly of rice production and exportation, which is further reinforced by lack of consumer awareness about affordable, sustainable rice brands. Our first step to tackling the ‘end’ segment of the supply chain has been to sell our ‘Impact’ Rice, partnering with farmers across the world. 80% of profits from sales of this rice are reinvested into our efforts to create a sustainable supply chain in Myanmar. Once the number of sustainable farmers in Bago reaches is able to scale to produce a consistently sufficient quantity, we can then act as an international intermediary, to sell their rice overseas. 

Rice Inc’s “Impact Rice” initiative is a smaller-scale version of what we hope to implement, as we look for suppliers who are willing to purchase our rice in tonnes so that we will be able to sustainably fund our programs in the villages of Bago. We are very fortunate to have already begun serving Sodexo in the UK and thus have begun the process of generating revenue from our "Impact Rice" brand and reinvesting it into the villages of Bago.

In more tangible terms, this will be used to expand the number of townships we can partner with to set up rice-drying facilities. Progressing to the next phase of transforming Bago’s rice supply chain into a more sustainable would consist of partnering with local rice mills to ensure they have more sustainable practices, and to more importantly directly connect with farmers within their area. Rice mills we partner with would not only be working towards being certified as sustainable, but would provide farmers fair prices for their rice. This method also naturally increases the income of farmers who cooperate in our programme as we remove middlemen from the picture. 

Our Vision aligns with the Evaluation Criteria in the following areas. Our approach, informed by input from our own stakeholders (i.e. farmers and local officials), as well as end-users who would buy our rice, such as caterers for universities. One such caterer is Sodexo. The vision is naturally systems-focused as it targets the supply chain which rice farmers are subjected to. We do our best to work within the system present, simply providing more ethical and sustainable ways for them to work. Their Diet is improved as farmers will be able to higher better quality levels of food with a higher income. Our approach is supported by the local government, and helps to fill in gaps of regulations and anti-exploitation policy. The transformative potential of the project is clear; farmers are given a technologically advanced, sustainable and feasible method to ensure their product can be dried efficiently, and with a supply chain network of mills and with Rice Inc acting as an exporter, they could contribute towards creating a sustainable system where they would get fair prices, and subsequently be able to attain a higher standard of living.

How did you hear about the Food System Vision Prize?

  • Word of Mouth

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Photo of Aphrodite Oti
Team

Great project for rural community through access to technology. Will you be incorporating tech training and transfer to the local youth populace? That way they can develop indigenous tech that will solve other related challenges of agriculture in the area.

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