CIIFAD's Role in Marketing Rice Grown with SRI Methods
Connecting SRI farmers to markets represents an important opportunity to have a significant economic and environmental impact on smallholder rice communities, conserve biodiversity, and attract more farmers to adopt SRI’s beneficial practices. Subsistence SRI rice farmers, who are especially vulnerable, face the same constraints as other small farmers, including low prices, isolation, no guaranteed regular sales, poor access to urban and export markets, lack of collective bargaining, and inadequate funding and knowledge to create a sustainable supply chain to international markets. In the case of rice, there is also the issue that urban consumers are generally unfamiliar with the remarkable range of rice biodiversity. The food industry is highly competitive and heavily regulated. Launching a new product into strongly established markets such as in the US can take 5-10 years and requires large up-front investments. The failure rate is high. Smallholder farmers lack the funds and expertise needed to attempt to bridge this gap.
For these reasons, starting in 2004, CIIFAD reached out to production partner organizations in Cambodia, Madagascar and Sri Lanka to create an informal SRI Global Marketing Partnership, with a view to developing marketing channels for SRI farmers. The Partnership received the SEED Award 2005, which led to a modest grant award of $21,500 from SEED and the Swiss reinsurance company, SwissRe, in 2006.
CIIFAD’s Sustainable Rice Systems Program has been encouraging greater attention to marketing issues since 2004. In order to demonstrate to buyers around the world that there is a market for SRI rice, CIIFAD has been collaborating with a small US-based company called Lotus Foods to link SRI farmers to North American markets. In 2009, Lotus Foods successfully introduced three SRI rices (from Cambodia, Madagascar and Indonesia). The rice from Indonesia, a blend of traditional fragrant rice and a local red rice, is the first rice to be certified as Fair for Life by the Institute for Marketecology (IMO), perhaps the most stringent fair trade designation in the industry. It is produced by farmers of the Simpatik Organic Cooperative in Tasikmalaya, West Java, and distributed through Bloom Agro. Feedback has been very positive indicating that SRI farmers have a real opportunity to compete in global markets. (see Fancy Food Show blog)
In mid-2005, on behalf of the group, a McKinsey Management marketing consultant conducted a pro bono three-month analysis of the SRI value chain in each country and prepared a strategy for strengthening capacity to reach national and international markets. The report found that facilities were in place in all three countries to produce, process, package, transport and sell SRI rice in satisfactory quantity and quality, and six rice varieties (2 per country) could satisfy international demands. Lacking were: human resources and marketing/business knowledge; organic and fair trade certification programs; startup funds; standardized quality and control; and reliable, stable buyers.
In 2006-2007, in response to a Bill and Melinda Gates Foundation call for proposals on improving smallholder value chains, CIIFAD, the Center for Study and Development of Cambodian Agriculture (CEDAC) and the National Confederation of Koloharenas in Madagascar seized the opportunity to collaborate on an ambitious proposal. The proposal sought to strengthen national production and marketing capacity, to conduct research to improve value-chain performance, and to consolidate and share knowledge to accelerate scaling-up of successful experience.
A key new partner was Lotus Foods, a small California-based company that had pioneered in the US food trade the introduction of traditional rice varieties grown on small family farms in countries like Bhutan, Bangladesh and China. In Bhutan their work with farmers helped to keep local red rice production from being overwhelmed by imported varieties. Thus, another goal of the proposal was to launch three SRI-grown rice products under the Lotus Foods brand in US supermarkets and other classes of trade, selling a minimum of 1,000 tons of SRI rice in three to four years, and identifying new markets for SRI rice. CIIFAD had approached Lotus Foods because of shared values to conserve biodiversity, improve smallholder incomes and protect the environment. When Lotus Foods co-owners Ken Lee and Caryl Levine, learned about SRI, they also came to share the same commitment to SRI as CIIFAD.
Although the proposal was among the finalists, it was ultimately not funded. Nonetheless, the partners set out to fulfill the plan to launch three SRI rices, though on a much reduced scale than envisioned in the grant proposal. The challenges have been enormous, particularly in light of the global crises of 2008, which included temporary rice export bans in both Cambodia and Madagascar, record-high prices for rice and oil, the credit crisis, and eroded consumer and retail spending.
However, in 2009, Lotus Foods introduced three SRI-grown rices from Cambodia, Indonesia and Madagascar at the Natural Expo West, the largest natural products trade show in North America. Marketed under the label of SRI: One-Seed Revolution, the rices are being promoted for their healthful qualities both for people and the planet. Raising consumer awareness of the social and environmental awareness of SRI methods is a key component of Lotus Foods’ outreach (see Lotus Food interview on video).
For further information about this initiative contact: Olivia Vent (firstname.lastname@example.org)
or Ken Lee and Caryl Levine, Lotus Foods (email@example.com)