Sustainable and inclusive rice in Vietnam

In Vietnam, rice has long been a strategic crop for national food security. For decades, the government actively supported increases in rice productivity, first for the domestic market, then for export markets. Since 1993, Vietnam has become a significant net exporter of rice, and in 2015, rice production reached 28 million tons. The country’s past growth track was based on high production of low quality rice and export at low price based on government-to-government contracts to Asian, African, and Middle Eastern markets. Coupled with low production costs, the strategy made Vietnam one of the top five rice exporting economies in the world.

Vietnam is a country with exceptional comparative advantages in rice production. At present, the rice sector plays an important role in Vietnam’s social and economic development, and rice lands account for 82% of the country’s arable land, according to IRRI, the International Rice Research Institute. About 52% of Vietnam’s rice is produced in the Mekong River Delta and another 18% in the Red River Delta.

Over 15 million smallholder farmers derive their livelihoods from rice in the Red River and Mekong deltas but the number of smallholders who can make a living from rice is declining. In An Giang province, in the Mekong delta, an average family only earns 100 USD a month from cultivating rice, about a fifth of what coffee-growers earn in Vietnam’s Central Highlands (Oxfam cited in The Economist, 2014).

1. Smallholder farmers struggle to meet the increasing quality demands of quality rice markets. In Vietnam as in other countries in the Mekong region, the trend of increasing land use intensification goes hand in hand with a drastic increase in pesticide use. Smallholder farmers often lack the necessary know-how to produce quality rice. Furthermore, Vietnamese rice strains tend to be of low or middling quality compared to that of competitors that have specialised in fragrant rice.

2. Unorganised smallholder farmers have limited access to markets. While rice plots should ideally cover 2-3 ha, the average cultivation plot of the Vietnamese rice farmers is about one acre (0.5 ha). Farmers’ small farm size and lack of organisation undermines their standing as potential business partners, making them vulnerable actors in the value chain. Farmers that organize themselves into farmer groups have a better chance of earning a decent income from rice. However, even farmer organisations are struggling to satisfy the demands of quality rice markets due to poor linkage with private actors, lack of information about the market, and lack of professionalism in the organisations’ management. A shift towards business farmer organisations would help improve farmers’ access to markets.

3. Rice farmers are increasingly vulnerable to the impacts of climate change. In 2016, an estimated 1.29 million tonnes of Vietnam's rice were lost to the country’s biggest drought in 90 years. At least 221,000 hectares of rice paddies were hit by the drought and related saltwater intrusion and the livelihoods of nearly 2 million smallholder farmers and poor households were affected, particularly in the Mekong Delta, Vietnam’s “rice bowl”.

4. Current rice production practices in Vietnam remain input-intensive to the detriment of the environment and people. Vietnamese soils in rice-growing regions are very poor in nutrients making it impossible to immediately use them for other crops such as maize. Rice paddies are a major producer of methane, a greenhouse gas which contributes to climate change. Environment-friendly technologies and practices are available but still limited despite a recent push towards more sustainability in the sector as illustrated by the 3-/3+ and 1m5R policies.

5. Rice products from Vietnam have very limited traceability. Rice enterprises have heavily relied on collection systems to supply their paddy which makes traceability difficult and undermines the quality of rice products. Many rice millers and exporters have established direct supply contracts with farmer organisations, especially for high-quality rice for both domestic and export markets. However, these contracts mainly benefit millers and exporters. More inclusive business practices would ensure win-win and fairer relationships between farmer organizations and rice enterprises.

6. Vietnam’s export consists mainly of white rice at the lower end of the market. The quality of Vietnamese rice sold in export markets is lower compared to other Mekong Countries, and therefore cheaper. This market niche occupied by Vietnam – low quality and cheap price – enables the country to easily export to and penetrate lower income countries globally. However, Vietnam’s reputation for providing low quality rice and the absence of an appealing national brand contribute to keeping low prices for farmers.

Together with the challenges above, numerous opportunities have appeared in recent years to improve the sustainability of Vietnam’s rice sector:

• At the national level, there is a growing demand for better quality rice as income levels increase and consumer food preferences change. This trend creates an opportunity for smallholder farmers to improve the quality of the rice that they produce and to make a better income out of it. This transition would require the implementation of quality standards and certifications that are accessible to small-scale farmers.

• Recently, the Vietnamese government launched a policy strategy for restructuring the rice sector which shifts the government’s focus from quantity to quality, from food security to food safety, and from a supply-driven sector to a market-driven one.

• The Sustainable Rice Platform, an initiative of the United Nations Environmental Programme (UNEP) and the International Rice Research Institute (IRRI) made up of over 80 institutional members recently adopted a standard for sustainable rice production. However, this standard does not yet come with a recommended quality assurance system to verify farmers’ compliance and progress towards the standard. At Rikolto, we believe that third party certifications are not the only solution to certify the quality and safety of rice, and that reliable and more affordable alternatives exist to ensure their accessibility to smallholder farmers.

The overall objective of our rice programme is to mainstream inclusive business practices for sustainable rice across the Vietnamese rice subsector. All our programme activities belong to one of the five intervention categories listed below:

1. Strengthening farmer organisations to improve their capacity to engage in inclusive business relationships with rice companies and supermarkets. We do so by providing trainings on marketing, business negotiation, production planning, and business planning;

2. Improving the sustainability, gender-sensitiveness and youth inclusiveness of rice value chains;

3. Testing the feasibility of using Participatory Guarantee Systems as a quality assurance mechanism for rice produced according to the SRP standard. Building on our experience of setting up & supporting Participatory Guarantee Systems for safe & organic vegetables, we are adapting the methodology and trainings to the Vietnamese rice context.

4. Facilitating the development of long-term inclusive business relationships between companies and FOs. Rikolto uses different approaches to help smallholder farmers and companies work better together. Among them are the LINK methodology developed by CIAT and Sensemaker’s Inclusive Business Scan.

5. Scaling out and up inclusive and sustainable practices for rice value chains. We therefore closely document our approaches and pilot experiences to support evidence-based advocacy towards policy-makers, the private sector and other actors, nationally and internationally, through Rikolto’s International Rice Cluster.

Rikolto works within rice value chains in 9 countries: Indonesia, Senegal, Tanzania, Uganda, Democratic Republic of the Congo, Benin, Burkina Faso, Mali and Vietnam. Through pilot projects with farmer organisations, Rikolto tests innovative practices and builds evidence, alongside research and finance institutes, private companies, and other actors to help answer crucial questions in the rice sector. The rice programme puts 3 main issues on the forefront:

• Sustainably produced rice
• Quality rice for consumers
• Inclusive business relations in the value chain

To contribute to this vision, the rice programme will build a vibrant collaborative environment by bringing members, partners and stakeholders together to exchange knowledge and information, to build common evidence to be shared at the continental and global level, and to design and implement common programmes to help set the agenda and nurture the international debate on sustainable rice. The Sustainable Rice Platform is an important forum for the rice programme as an entry point to major players on the global rice scene. Rikolto has been a member of the platform since May 2015.

By 2021, Rikolto in Vietnam has supported approximately 1,700 farmers in 13 farmer cooperatives in Dong Thap and Kien Giang provinces, and two farmer groups in An Giang province.

The total SRP-compliant area is 5000 ha. All the farmer cooperatives have been provided technical services, inputs, exploring market opportunities for the members of cooperatives, and contributing to environmental protection in the area.

The budget for Rikolto's rice programme in Vietnam for the period 2017-2021 amount to 347,500 EUR. We are constantly looking to expand and diversify our sources of funding. If you wish to support us, please reach out to Mr. Tuan Le: tuan.le [at] rikolto.org

As an international NGO, we are only allowed to receive funds from outside of Vietnam.

We expected that by the end of 2021:

1. Our partner rice farmer organisations will have developed the required business and management capacities to access quality rice markets, including the ability to implement regularly updated business and production plans, and access up to date market information systems;
2. Approximately 5,000 supported farmers are able to meet high value rice markets’ requirements in terms of quality, variety and quantity, and can make a better income out of the sale of rice;
3. Supported rice value chains have become more gender-sensitive and create more income-generating activities for the youth;
4. Rice produced by our partner farmers complies with national and/or international quality standards such as the Sustainable Rice Platform standard, and is grown using environmentally-friendly and climate-smart practices;
5. Local Participatory Guarantee Systems for rice produced according to the Sustainable Rice Platform standard are fully operational, able to function independently from Rikolto, and engage a wide range of stakeholders (local authorities, rice buyers, farmers, consumer associations and civil society);
6. Vietnamese consumers have better access to affordable quality rice produced in a sustainable way;
7. Innovative inclusive business models and tools are developed together by the private sector, farmers and Rikolto;
8. Farmers’ views are better reflected in contracts with rice companies and they are able to trade rice under good conditions in terms of price, quantity and contract duration;
9. A strong evidence base is built by Rikolto and its partners to convince policy-makers to improve the enabling environment for more sustainable and inclusive business in the rice sector;
10. The international debate on rice sustainability is nurtured by experiences from Vietnam, especially by Rikolto’s partners;
11. Participatory Guarantee Systems is recognised as a valid quality assurance mechanism for rice produced according to the SRP standard by the Sustainable Rice Platform.

Rikolto in Vietnam’s rice programme will specifically contribute to the following Sustainable Development Goals:

SDG 1: End poverty in all its forms everywhere

• Target 1.1. By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day
• Target 1.2. By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions
• Target 1.7. Create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies, to support accelerated investment in poverty eradication actions

SDG 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture

• Target 2.1. By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious and sufficient food all year round
• Target 2.3. By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment
• Target 2.4. By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding and other disasters and that progressively improve land and soil quality

SDG 5: Achieve gender equality and empower all women and girls

• Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life

SDG 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

• Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-year framework of programmes on sustainable consumption and production, with developed countries taking the lead.

• Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value ** SDG 10: Reduce income inequality within and among countries**

• Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average

SDG 12: Ensure sustainable consumption and production patterns

• Target 12.1. Implement the 10-year framework of programmes on sustainable consumption and production (10YFP), all countries taking action, with developed countries taking the lead, taking into account the development and capabilities of developing countries
• Target 12.3. By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses
• Target 12.4: By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health and the environment

SDG 13: Take urgent action to combat climate change and its impacts

• Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.

SDG 17: Strengthen the means of implementation and revitalize the global partnership for sustainable development

• Target 17.7: Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships

By the end of 2021, 1,700 direct beneficiaries, including about 1000 farmers applied SRP in rice production with an area of 2,500 ha were supported.

Rikolto promoted the (SRP) standards in the rice programme from 2017 to 2021 through training for farmers and encouraged the adoption of these standards. Rikolto conducted an SRP baseline survey, concerning not only sustainable production but also environmental and social aspects, such as the public awareness of environmental protection, the local situation of natural resources and waste management before developing the programme interventions. Based on the survey results, the team accompanied some FOs, and local authorities to pilot specific SRP models. Technicians of the district department of agriculture and rural development and staff members of the FOs were working alongside farmers to train, coach, and assure their compliance with SRP standards. Rikolto monitored the results and identified areas for improvement in every season.

As the result, over 90% of farmers got an 80+ score in SRP standards with the increased sustainability indexes, i.e., climate change (from 1.27 in 2017 to 2.65 in 2021), resource management (from 1.40 in 2017 to 2.37 in 2021), water management (from 2.07 in 2017 to 2.23 in 2021), and soil conversation (from 1.60 in 2017 to 1.99 in 2021). By adopting SRP, the production costs were reduced by about 2,9 million VND/ha (equivalent to ~120USD/ha), thanks to the cut of fertilizers and pesticides use. Rikolto also researched some climate-smart rice techniques for rice production such as an integrated rice-fish farming system and modelling of biochar production to contribute to reducing the carbon footprint in rice production and developing the ecosystem.

Asian Organic Agriculture Research and Development Institute (AOI)

Dong Thap Department of Agriculture and Rural Development

Kien Giang Agricultural Extension Center

Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD)

International Rice Research Institute (IRRI)

Ong Tho Rice Corporation

GIZ in Vietnam

Oxfam in Vietnam

Loc Troi Group Joint Stock Company (Loc Troi Group)