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Marketing Issues

Many farmers using SRI methods are producing surpluses beyond household needs. While most are selling the rice on their own without additional premiums into local markets, a growing number of NGOs, farmer cooperatives, and private companies are working with SRI producers to achieve a higher price, taking advantage of increasing consumer demand for foods grown without chemicals, greater biodiversity, and fair trade in the case of international markets.

These marketing initiatives involve the creation of viable value chains from paddy to plate, whether the plate is in the capital or on another continent. They include the organization of SRI farmers into producer groups for collective purchase of rice  at harvest, the development of internal control standards to qualify for organic certification, training farmers on those standards, applying for organic certification and where relevant fair  trade certification, working with buyers to achieve necessary quality in milling, processing and packaging, and managing international export operations. Consumer education is another component. Some of the more advanced SRI marketing initiatives we know about are in Cambodia, Madagascar, India, Indonesia, Sri Lanka and Thailand.

SRI farmers growing traditional rice varieties have a unique product, distinguished by culinary, social and health qualities, with which they can compete in domestic and international markets and which producers in developed countries cannot readily duplicate. Without marketing channels, this unique rice will go into undifferentiated supply pools without attracting a premium price. 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 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. To learn what's been happening with SRI marketing since then, see the country experiences and importer experiences sections below. [...Read more about CIIFAD's role in supporting global marketing initiatives for rice grown with SRI methods.]

 

Country Experiences

Cambodia

The Cambodian Center for Study and Development in Agriculture CEDAC, with the support of the German Development Service (DED), exported the first container with organic rice to the US in December 2009. Farmers belonging to the Damrei Romeal Organic Cooperative Federation, Tramkok district, Takeo Province, had produced the rice for this export. From the federation, which covers 39 villages, about 250 farmers sold certified organic rice to CEDAC, which was imported and distributed in the USA through Lotus Foods.

The objective of the Natural Agri-Product Marketing Project (NAP), which is the marketing arm of CEDAC, is to ensure that small farmers can get higher prices for their organic products and obtain a share of the net income, which can then be used for community development or collective purposes. It also improves consumers' access to healthy, organic food. The main activities and services of NAP are:

  • Marketing of natural (organic) agricultural products in Phnom Penh and other urban areas;
  • Assisting rice farmers to organize themselves in village-based producer groups, inter-village clusters and a national network;
  • Capacity building among the representatives of producer groups to enhance their leadership and management skills and improve their knowledge about organic farming methods, as well as marketing. Likewise they learn how to carry out internal quality controls;
  • Assisting producer groups to put in place internal control systems;
  • Raising consumers' awareness about natural agricultural products, fair trade and community development; and
  • Organizing field visits for interested consumers, building consumer networks and recruiting student volunteers.

Currently, about 3600 families from Takeo, Kampot, Kampong Speu, Kampong Cham Kampong Thom, Prey Veng and Svay Rieng provinces are involved in 434 organic SRI rice producer groups. The members follow CEDAC's strict Basic Organic Standards. During the harvest of 2007-2008 they sold around 1200 tons of rice (paddy) to NAP. The farmers receive a price that is at least 10 percent higher than what they would normally receive for their products. In addition, each village-based producer group receives a share of the net income from NAP for collective use, community development or other social or environmental purposes. In 2007, CEDAC allocated more than 20 million riels (about US$5,000) to the community, and in 2008 CEDAC expected to allocate more than 100 million riels due to the increased supply and higher rice price.

In addition to rice, CEDAC is working with organic vegetable, fruits, meat from raising chickens and pigs, palm sugar, pepper and fish paste producers. Their long-term goal is to operate NAP as stores specializing in marketing of organic and locally produced foods. NAP now operates six retail shops in Phnom Penh and elsewhere.

The key partners and supporters of the Natural Agriculture Products shop are Oxfam GB, Oxfam America and DED (German Development Service). From 2007 to 2009, CEDAC had grant support from the U.S. Department of State to expand its organic SRI marketing initiative. This grant emerged in the framework of the SEED Award CEDAC received in 2005. CIIFAD/Cornell University is also assisting CEDAC in linking NAP initiatives with markets in the U.S. (such as to the rice-importing company Lotus Food) and in Europe.

An expert from the German Senior Expert Service (SES) helped to advise NAP in 2005 and a Marketing Advisor from DED has been working with NAP since October 2006. JICA, JFPR/ADB, Oxfam GB and America, AFD, EED, GAA, ACT and LDSC are key donors to CEDAC in building capacity of producer groups in Takeo, Kampong Speu, Kampong Cham, Kampong Thom, Kampot, Kampong Chhnang, Prey Veng, Svay Rieng.


Reports and Articles on Marketing in Cambodia

INDONESIA

In Indonesia, BloomAgro is the distribution channel for the Simpatik Farmer Cooperative production and processing units located in Tasikmalaya, West Java, and the Appoli Farmer Association in Boyolali, Central Java. BloomAgro was instrumental in helping Simpatik, which includes 2300 farmers cultivating about 350 hectares of paddy using SRI methods, to certify and export rice grown with SRI methods. BloomAgro is exporting rice grown with SRI methods to the USA, Germany, Singapore, Malaysia and the United Arab Emirates and is exploring new value-added rice products. In the USA, the rice is imported and sold by Lotus Foods, while the SRI rice going to Europe is sold under BloomAgro's Sunria brand.

Both the Simpatik production and processing units have been certified as Fair for Life by the international certifying organization IMO (Institute for Marketecology), based in Switzerland. The "Fair for Life" designation is regarded as perhaps the most stringent and difficult to achieve in the industry due to the many social and environmental criteria. The rice produced by Simpatik is the only rice to be certified as Fair for Life by IMO (as of 2012). In fact, Simpatik scored higher than the norm, in large part due to the many environmental benefits generated by farmers using SRI, such as water savings and soil conservation.  All the criteria and Packing SRI rice for export in Boyolaliscores can be viewed at the IMO website.

The Appoli Farmer Association in Boyolali achieved its IMO organic and fair trade certifications in January 2013 and began exporting to Belgium and Germany in August 2013 under BloomAgro's Sunria brand name. The fields with IMO certification also have the the national organic certification for Indonesia for selling its organic SRI rice in the domestic market. Shown at right are members of the Association preparing mixed red and white varieties in vaccum-packed bags for shipping. [Read more about Appoli and their association with Bloom Agro's Sunria brand. A Feb. 24 article from the Netherlands also tell of successful marketing of Sunria SRI rice in Belgium.]

Articles and Multimedia about Indonesia

MADAGASCAR

In eastern and central Madagascar in the provinces of Tamatave and Fianarantsoa, the USAID-funded Landscape Development Initiative (LDI) project —succeeded by the Ecoregional Initiatives (ERI) and Business and Market Expansion (BAMEX) projects— was encouraging the development of Koloharenas (village associations focusing on natural resource management) and SRI rice production, working closely with Tefy Saina. In 2004, Slow Food awarded Tefy Saina its Award for the Defense of Biodiversity for its work with the KHs to produce traditional Malagasy red rice, called Vary Mena. LDI’s Glenn Lines enabled the KH farmers to participate in Slow Food’s international food fair, the Salone del Gusto, in Turin, Italy, in October 2004. Slow Food made an in-kind equipment grant to the Hanitriala Koloharena cooperative to help improve rice packaging and quality control. More recently, an article on the Slow Food for Biodiversity website has written about their efforts to help make the traditional Dista pink rice more marketable. In 2006, with support from the SEED Initiative, CIIFAD facilitated the visit to Madagascar of Lotus Foods to explore their interest in SRI-produced rice.

Since 2007, the US rice-importing company Lotus Foods has been working with the Coopérative Koloharena Ivolamiarina Besarety, Amparafaravolato market a special pink rice, called Varini Dista, named after the farmer who popularized it. The Koloharena Ivolamiarina (KH/I) is part of the Confederation Nationale Sahavanona Koloharena, established in 1999, as the national office for 29 Koloharena farmer cooperatives (including 950 village-based associations and 29,000 members) committed to increasing small-farm income using environmentally-sound farming methods (initiated by CIIFAD). The cooperatives are concentrated along the threatened, humid forest in eastern Madagascar.

With backstopping first from BAMEX, then ERI and since early 2009 from the French-funded Projet BVLac Alaotra as well as US Peace Corps volunteers and the volunteer organization AVSF - Agronomes et Vétérinaires Sans Frontières, Lotus Foods imported to the US the first container (about 18 tons) of milled pink rice or “Varini Dista” in early 2009.  The farmers in the KH also received some modest grant support from the Better U Foundation in 2009 to purchase weeders, organic fertilizer and other simple implements. This raised production by more than 50%.  Lotus Foods imported a second container in early 2010 and is working with the KH and Ecocert on organic and fair trade certifications. The rice is sold in the US under the Lotus Foods label as Madagascar Pink Rice. (See video by Lotus Foods)

OTHER COUNTRIES

The Surin Farmers Support (SFS) in Thailand, now the Community for Agroecology Foundation (CAE) export fair trade, organic rice internationally through several partners. SRI methods are commonly used for seed multiplication, although the regular crop, grown largely on rainfed paddies, is not yet grown extensively with SRI..

Of course all countries that grow rice market some of their rice in their domestic markets. However, other than those countries noted above, we do not know of many that are marketing their rice specifically as rice grown with SRI methods. A 2007 study published by Oxfam Australia, however, documents attempts to market rice produced with SRI methods in Sri Lanka. We have no further information of follow-up on the study at this time.

 

Reports and Articles about Sri Lanka

Importer Experiences

LOTUS FOODS

Lotus Foods is a California-based rice importing company established in 1995, which uses fair-trade premiums to support sustainable and organic production of heirloom and specialty rices by small family farmers around the world. In the US, Lotus Foods rice products are distributed nationally in four classes of trade, namely retail, wholesale, food service and restaurant. They have become widely known for introducing American consumers to Bhutanese red rice and their signature product black “Forbidden Rice” from China, pioneering improved awareness of the world’s wealth of rice biodiversity. Since being approached by CIIFAD about SRI in 2005, Lotus Foods co-owners and co-founders Caryl Levine and Ken Lee, have made a commitment to link SRI farmers to the global marketplace as a way to provide incentive for farmers who have adopted the innovation, with all its social and environmental benefits, and to bring consumers healthier, more nutritious rice choices.

Lotus Foods is the first company to export SRI-grown rice to the US with the express objective of drawing attention to the benefits of the growing methodology. Lotus Foods works directly with the farmer cooperatives (Madagascar), NGOs (CEDAC in Cambodia) or enterprises (like BloomAgro in Indonesia), that are supporting local farmers in SRI production. As none of the in-country partners had  any previous experience with international export, Lotus Foods has played an important capacity building role, and has helped catalyze demand for organic and fair trade certified rice in those countries.

The three SRI rices imported by Lotus Foods were featured at the 2009 and 2010 Natural Expo West and the 2010 Fancy Food Show, capturing industry interest for both the quality of the rice and the environmental benefits of SRI. Currently, the SRIrices are available in bulk only, but will start selling in one-pound retail bags in 2011. Many natural food stores nationwide, and Whole Food stores on the West Coast already feature the SRI rices. A more detailed description of the three SRI rices can Ken Lee and Bill Clinton at CGI meetingbe found on the Lotus Food website. During January 2013, Lotus Foods rolled out "Heat and Eat" microwaveable rice bowls (ready in just 60-90 seconds) made with Cambodia and Indonesia rice grown with SRI methods.

Lotus Foods is a member of the Clinton Global Initiative (CGI) and Social Venture Network. (Go to CGI commitment site and enter “Lotus Foods” in the partner box to see their commitment.) On September 23, 2010, Ken Lee (shown at right with Bill Clinton) joined a plenary session on strengthening market-based solutions at the annual meeting of the Clinton Global Initiative (see video). Caryl Levine presented during the CGI Scaleable Ideas session on September 23, 2014, with a request to help fund rice mills together with the NGO CEDAC in Cambodia (see video).

During 2014, Lotus Foods' Caryl Levine won the Specialty Foods Association's Leadership Award in the "vision" category for their promotion of SRI. Lotus Foods was also among the companies in the food sector, leading and pioneering efforts to promote conservation and sustainable use of biodiversity, who were honored with Biodiversity Awards on November 16, 2010. The Union for Ethical BioTrade (UEBT) and United Business Media (UBM) awarded Lotus Foods an honorable mention at a ceremony held at the Health Ingredients trade fair in Madrid, Spain, for giving farmers a reason to use and protect traditional varieties by bringing them to the marketplace.

 

Articles and Videos about Lotus Foods

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