It is difficult to imagine Malaysia and Southeast Asia without rice, but the most difficult thing to imagine is the amount of waste that is produced when it comes to growing it, especially from the point of view of an average consumer.
About 3.66 million tons 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 advances that can increase yields .
Rice skin account by 20% to 33% of the weight of the rice, and they are usually left to decompose or burn, which generates more waste. In addition, the traditional way of drying rice by itself is also wasteful, which we will talk about later.
Lincoln, Kisum, and Zheyi not only realized it was a problem, but they wanted to do something about it.
Work the soil
The trio met at University College London and started this project in their second year. Both Lincoln and Zheyi are Malaysian, while Kisum is from Hong Kong.
They met in a competition called the HULT Prize, which is an international competition for aspiring social entrepreneurs working in collaboration with the United Nations.
His team won in 2018 and they were awarded 1 million US dollars (4.1 million RM) to carry out its work of reducing rice waste and ensuring fair trade for farmers in the agricultural industry. They were also the first group from Malaysia and Southeast Asia to win this award since it began in 2010.
Rice Inc. it is currently headquartered in the UK, but is working in Myanmar and Malaysia and wants to physically expand into Malaysia soon.
Now, they had two problems facing rice farming: the farmers who did not earn fairly and the crop losses they normally suffered.
To ensure the fair trade of rice farmers, they will connect them directly to high value markets for fairer prices. For example, they currently carry artisanal rice from Sabah to Kuala Lumpur and Singapore, and also sell rice in the UK through their rice brand, Paddi.
As for the reduction of crop losses, they introduced agritech to dry the rice that uses the by-product of rice crops, also the shells, as biomass energy to run this machine and dry the rice evenly. Lincoln compares the drying of rice with his agritech to that of “laundry.”
Problems with the traditional way of drying rice
“Rice is usually dried in the sun. It is a manual process, which requires a lot of labor and usually takes much longer. It takes up to 5-6 days, compared to 5-6 hours using a machine, ”the team shared with Vulcan Post.
Compared to this machine, this traditional way of drying rice is also much more imprecise, so it turns out that the rice is too dry or too wet.
“Rice must be processed with a very specific moisture content, around 12% -14% and any deviation from this leads to breakage and therefore waste.”
In addition, there is also the risk of environmental pollution, climate change and animals invading the drying space. Therefore, ensuring a more efficient and less exposed environment when drying rice is important to reduce crop losses.
As mentioned, rice husks are used as biomass fuel and feed these dryers by generating heat which is then channeled through a fan to a chamber where the rice can be dried.
The Rice Inc. team he installed a dryer in the villages of his beneficiaries which farmers can access by bringing them their wet rice paddy after harvest and drying it for a fee.
At the moment, they have two sites in Letpadan, Myanmar, with a processing capacity of more than 3,000 tons per year and want to bring this agritech to Malaysia soon.
Let’s talk numbers
On average, installing these “laundry” rice dryers costs US $ 10,000 per unit. From these US $ 10,000, US $ 6,000 is used to purchase the machine and US $ 4,000 is the cost of installation.
“By simply providing a dryer, we can increase farmers’ incomes by 15% due to the price difference between wet and dry rice paddies, ”they explained. One session can dry up to 5 tons of paddy and will cost a farmer approximately 166 RM.
According to the team, 5 tonnes of dry rice is equivalent to an increase in farmers ’average income by RM820, which allows them to earn approximately RM 8,204 over the standard RM 7,384 for this traditionally dried amount. By paying 166 RM, this means that they will get returns five times compared to the cost.
Farmers can also expect a 15% increase in their selling price due to the increase in their dry rice yield.
Now, farmers do not charge monthly like the rest of us, but pay them during the months of April and November, which are the harvest seasons. Therefore, they usually take on strange jobs during the rest of the year.
“According to our research, we found that most rice farmers belong to the B40 group and had an average family income of 2,527 RM per month from 2016, according to this research“They shared.
However, they clarified that they work with artisan rice farmers to get started (jasmine, basmati, sushi, etc.), so the higher price of this rice already exists, which helps them pay them better. . Its role is to ensure that most of the final sale price is redirected to farmers instead of going to intermediaries and at various costs.
“How we do it is to help them with marketing and promotion, as well as optimize logistics and market the price of rice that the community will decide.”
Their farmers can decide how much they want to earn when they work with them and will only advise them on a suitable price point for premium rice and how much they would be willing to pay the Malaysians.
Challenges with business management
“When negotiating agreements or doing interviews, we always have to have a translator, which makes each conversation take twice as long because we can’t communicate in Burmese,” they shared with Vulcan Post.
When the coup took place, they also had to stop operations in Myanmar for a while and adapt by continuing their work in Malaysia.
In addition, when they were already receiving sufficient traction in the UK with a volume of between 100 and 400 tonnes of orders, many of these outlets closed due to COVID-19.
“Just as Fairtrade Coffee worked alongside big brands like Starbucks, we are still looking for our ‘Starbucks’.”
Therefore, what the team is trying to achieve now is to boost this demand for Paddi with major retailers and food chains in order to provide more kampungs to its direct trade platform and allow more farmers to benefit from direct connection with high value markets.
- You can learn more about Rice Inc. here.
- You can read more agritech related pieces we have written here.
Featured Image Credit: Lincoln and Kisum, co-founders of Rice Inc.