Better Rice for a Better Price
Better Rice for a Better Price
Co Van Dau is one of hundreds of farmers in the remote district of Bao Yen, Lao Cai province that grows Japonica rice DS1 – which is often called ‘Japanese rice’ by local people in this Northern mountainous area of Vietnam. His family, together with other 37 families in the district have been working with a large seed company to pilot the production of Japonica rice that is promised to bring them better income.
“The Company provided us with seeds, fertilizer and a subsidy of nearly USD 400 per ha of farm land to produce Japanese rice. This variety is highly productive and is very tasty” – Dau said happily after he finished the Summer harvest of “Japanese rice”.
Vietnam National Seed Joint Stock Company (NSC) is a leading seed company in Vietnam that has developed an innovative business model that addresses the highly potential market opportunity. Demand for Japonica rice accounts for 20% of the total global demand for rice. Because of its high quality, Japonica rice is often sold at a high price. There is an increasing demand for Japonica rice within Vietnam. Export markets such as Japan and Taiwan also offer an opportunity for Vietnamese exporters that meet food safety and hygiene standards.
The Company has made a breakthrough in innovation by developing a closed Japonica rice production cycle from seeding to distributing finished products. It combines traditional production methods and new biotechnologies to create Japonica rice seeds that are adaptive to deltas and mountainous areas and provide higher productivity, quality, and market value. NSC has made inclusivity a core aspect of its operations, engaging low-income populations at two points:
As producers: The Company builds production capacity through cooperatives.
As consumers: The Company sells high quality seeds to farmers and high quality rice to consumers.
The VBCF team have been working closely with NSC to help the Company deliver impacts at three levels:
Commercially, NSC has the potential to significantly expand its product portfolio and customer base across Northern Vietnam and secure a profitable business.
Socialy, this inclusive business model helps improve income and job opportunities for more than a thousand farming households that supply Japonica rice seeds. More than a hundred thousand farmers benefit from better seeding and higher selling prices of Japonica rice.
Environmentally, Japonica rice is more resilient to pests than other varieties, which reduces the use of pesticides. Moreover, applying System of Rice Intensification (SRI) methods in Japonica rice cultivation helps further reduce the use of pesticides and chemical fertilizers.
“The Company tell that we can sell this Japanese rice to them for almost twice the price of traditional rice that we used to grow.” – Dau said.
There is a high potential for scaling up this inclusive business model. Research shows that 15% to 25% of the land under rice cultivation in the North of Vietnam is suitable for Japonica rice production. This variety has been proven to be higly productive and very tasty which is becoming a favourate product of domestic and overseas consumers.