Have few minutes? Help us improve how content is organized on IFC.org by completing a brief survey.
Cao Thi Kim Thoa grows rice in an eight-hectare field in the Mekong Delta—long known as the “rice bowl” of Vietnam for its fertile and productive land. For much of the last 25 years spent farming, Thoa sprayed pesticides liberally, believing it would protect her crops. She had no idea that too much pesticide could be unsafe for human consumption or that exposure to those harmful chemicals could affect her own health.
But now she knows—because Loc Troi Group (LTG), a leading provider of agricultural services and products in Vietnam, shared that information with her when she began work as a contract farmer. Since then, she has started producing rice sustainably and spends much less money on seeds, pesticides, and fertilizers.
“The output is similar, but the quality of rice is definitely better and more profitable,” Thoa says.
Such sustainable rice farming practices, if adopted widely, can expand the global market share for Vietnamese agriculture, increase the sector’s profitability, and improve farmers’ livelihoods. Threats from climate change make a focus on sustainability even more urgent.
That’s why IFC and the International Rice Research Institute (IRRI), in partnership with the government of Canada, have helped LTG adopt the world’s first rice sustainability standard from the Sustainable Rice Platform (SRP), a multi-stakeholder partnership that promotes sustainable rice cultivation. Strict requirements ensure the production of safe grains, protect the environment, and guard the health of farmers and consumers. Ultimately, these efforts will help improve the quality, safety, and traceability of rice harvested in Vietnam while opening up international markets
An Appetite for Sustainability
LTG is the first agribusiness to apply sustainability standards in Vietnam. To meet SRP’s conditions, the 3,500 farmers in LTG’s value chain must conform to 46 farming requirements in rice production in the Mekong Delta’s seven provinces.
The expected results make this change worthwhile for the farmer as well as the consumer, says Thoa. “New standards have changed our old ways of farming, and the use of pesticides is one example,” she explains. “The SRP standard does not allow a residue on the final product, so instead of spraying pesticides close to the harvest, we are now advised to stop doing this 35 days ahead of harvest. Farmers must be aware of the issue and gradually change their traditional practices as this is firstly beneficial to themselves.”
Farmers like Thoa have been among the first to benefit from the move to sustainable rice farming. Since the company pays a premium price for SRP rice, she can earn an additional $150 and save around $2,000 per crop for future expansion.
Nguyen Van Nhat, a 52-year-old farmer from An Giang province who has grown rice for three decades, has also been won over. Since 2016, when Nhat started applying SRP standards, his farm’s productivity has increased by about 10 percent. That’s not the only plus: he also saves $100 per hectare per crop due to fewer expenses related to input.
With such positive results, he sees growth in his farm’s future. “I have rented more land to expand rice production and I hope to buy at least one more hectare in the next three to four years,” he says.
Competitiveness is Key
The shift to sustainable rice farming is significant in Vietnam, where rice accounts for 82 percent of the total cultivated land area and is staple food for its 97 million people. Over 15 million smallholder farmers derive their livelihoods from rice in the Red River and Mekong deltas. However, the number of smallholders who can make a living from rice is declining. In the Mekong Delta, an average family only earns $100 a month from cultivating rice. Income of rice farmers in Vietnam is 2.7 times lower than Thailand, and 1.5 times lower than Indonesia.
But there is reason for optimism: LTG has received an order from one of the world’s leading rice traders to supply 5,000 tons of SRP rice by 2021. To meet this target, LTG is expanding its SRP supply chain to 10,000 more farmers in the Mekong Delta over another 10,000 hectares in the next two years. With more orders from international traders, LTG expects to increase production capacity in the coming years.