M’sian Startup Reducing Rice Crop Losses Via Agritech
It’s hard to imagine Malaysia and Southeast Asia without rice, but what is harder to imagine is the amount of waste that occurs when it comes to agriculture, in particularly from the point of view of the average consumer.
About 3.66 million tonnes of rice husks (the outer layer of rice) are left in the field each year, and this number is expected to increase to 7 million tonnes each year from 2020 due to agricultural advancements that may increase. the yield.
Rice hulls make up 20% to 33% of the weight of the paddy and are usually left to decompose or are burnt, creating more waste. Moreover, the traditional method of drying rice itself is also a waste, which we will cover later.
Lincoln, Kisum, and Zheyi not only realized this was a problem, they wanted to do something about it.
Plow the soil
The trio got together at University College London and started this project in their sophomore year. Lincoln and Zheyi are both Malaysian, while Kisum is from Hong Kong.
They came together in a competition called the HULT Prize, which is an annual international competition for aspiring social entrepreneurs that works in partnership with the United Nations.
Their team won in 2018 and received US $ 1 million (RM 4.1 million) to do their work of reducing rice waste and ensuring fair trade for farmers in the rice industry. They were also the first group from Malaysia and Southeast Asia to win this award since its debut in 2010.
Rice Inc. is currently based in the UK, but works in Myanmar and Malaysia, and is looking to physically expand to Malaysia soon.
Now they had 2 problems to solve in rice cultivation: the farmers who were not paid fairly, and the crop losses they usually suffered as well.
To ensure fair trade for rice farmers, they will connect them directly to high-value markets for fairer prices. For example, they currently bring artisan rice from Sabah to Kuala Lumpur and Singapore, and also sell rice in the UK through their rice brand, Paddi.
Regarding the reduction of crop losses, they have introduced agricultural technologies for drying rice that use the by-product of rice crops, AKA the husks, as biomass energy to run this machine and dry the crop. rice evenly. Lincoln compares the drying of rice with their agritech to that of a “laundromat”.
Problems with the traditional method of drying rice
“Rice is usually sun-dried. This is a manual process, which is labor intensive and usually takes a lot longer. It takes up to 5-6 days, compared to 5-6 hours with a machine, ”the team shared with Vulcan Post.
Compared with this machine, this traditional method of drying rice is also much more inaccurate, causing the rice to be too dry or too wet.
“Rice needs to be processed at a very specific moisture content, around 12% to 14% and any deviation from that will cause breakage, and therefore waste.”
In addition, there is also a risk of contamination from the environment, climate change and animals invading the drying space. Therefore, it is important to ensure a more efficient and less exposed environment for drying rice to reduce crop losses.
As mentioned, the rice husks are used as biomass fuel and power these dryers by generating heat which is then channeled through a fan into a chamber where the rice can be dried.
The Rice Inc. team has installed a drying rack in their beneficiary villages that farmers can access by bringing their wet rice to them after harvest and drying it for a fee.
At present, they have 2 sites in Letpadan, Myanmar with a processing capacity of over 3000 tons per year and are looking to bring this agritech to Malaysia soon.
Let’s talk about numbers
On average, installing these “laundromat” rice dryers costs USD 10,000 per unit. From that US $ 10,000, US $ 6,000 is used to purchase the machine and US $ 4,000 is the installation fee.
“By simply providing a dryer, we can increase the farmer’s income by 15% due to the price difference between wet and dry paddy,” they explained. One session can dry up to 5 tonnes of paddy and will cost a farmer around RM165.
According to the team, 5 tonnes of dried paddy represents an increase in farmers’ average income of RM820, earning them around RM8204 above the norm of RM7384 for this traditionally dried amount. By paying RM165, that means they get 5x returns over cost.
Farmers can also expect a 15% increase in their selling price due to the increase in their dry paddy yield.
Now farmers don’t get paid monthly like the rest of us, but they get paid in April and November which are the harvest seasons. As a result, they usually do odd jobs for the rest of the year.
“From our research, we found that most rice farmers belong to the B40 group and have an average family income of RM 2,527 per month as of 2016, according to this research,” they shared.
However, they clarified that they worked first with artisanal rice farmers (jasmine, basmati, sushi, etc.), hence the higher retail price for this rice, which helps them pay them better. Their role is to ensure that most of the final sale price is channeled to the farmers instead of going to middlemen and at miscellaneous costs.
“The way we do this is to help them with marketing and promotion as well as optimizing logistics and marketing the price of rice which will be decided by the community.”
Their farmers can decide how much they want to earn by working with them, and they will only advise them on an appropriate price point for premium rice and how much Malaysians would be willing to pay for it.
Business management challenges
“When negotiating deals or conducting interviews, we always need a translator, so each conversation takes twice as long as we can’t communicate in Burmese,” they said. shared with Vulcan Post.
When the coup occurred, they also had to halt operations in Myanmar for a while and adapt by continuing their work in Malaysia.
On top of that, while they were already getting enough traction in the UK with an order volume of 100-400 tonnes, many of these retail outlets have closed due to COVID-19.
“In the same way that Fairtrade Coffee has worked with big brands like Starbucks, we are always on the lookout for our ‘Starbucks’.”
Therefore, what the team is trying to achieve now is to leverage this demand for Paddi with major retailers and food chains to be able to bring more. kampungs on their direct trade platform and allow more farmers to benefit from a direct connection to high-value markets.
- You can read more about Rice Inc. here.
- You can read more agriculture related articles than we have written here.
Featured Image Credit: Lincoln and Kisum, Co-Founders of Rice Inc.
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