Cutting rice greenhouse gas emissions: Olam calls for international cooperation

16 Oct 2018 --- Olam is calling for urgent action by the agri-sector including brands, retailers, financial institutions, scientists and governments to implement solutions to limit methane emissions from rice production while improving farmer livelihoods and food security. According to the company, it is essential to consider that many rice consumers are unable to pay more for rice production and the industry should react now.

At the 5th International Rice Congress in Singapore this week, Sunny Verghese, Co-Founder and Group CEO of Olam, one of the world’s largest rice traders, will call on all stakeholders to advance the implementation of the Sustainable Rice Platform (SRP) Standard which promotes climate-smart practices. To achieve real scale, a raft of additional measures such as financial market support, reduced tariffs and freeing up capital by promoting the benefits of sustainable rice to more affluent consumers, are required. 

Verghese explains: “Rice production emits the same level of CO2 equivalent as Germany through methane emissions. But climate change mitigation cannot be a trade-off that hurts the farmers and communities who depend on rice for income and sustenance. This is especially so when rice is the largest staple crop in the world, feeding half of humanity. We must reimagine the whole supply chain if the world is to become carbon neutral by 2050.” 

Global Head of Rice at Olam, Devashish Chaubey, says: “Our programs with the Thai Rice Department, development agency GIZ and others prove that the SRP Standard works. Together, we are aiming to reach 150,000 farmers by 2023 in Asia and Africa. This represents a mere 0.1 percent of total global rice farming households. Greater scale requires more impactful action by the whole of the rice sector.” 

Olam Spokesperson Nikki Barber, tells FoodIngredientsFirst: “Rice feeds half of humanity: it is the largest staple crop in the world feeding more than 50 percent of the global population. With its size and cultural appeal, rice is not substitutable. Due to the quicker pace of population growth in major rice consuming regions of Asia and Africa; rice demand outpaces global population growth.”

“It’s the production methods rather than the crop itself that contributes to climate change, for example, over-use of fertilizer, land conversion or, for rice – the rotting vegetation. Livestock production is also a major contributor, particularly through enteric fermentation,” she explains. 

“Climate change impacts are already being felt across many crops. In rice, for example, the Mekong Delta in Southern Vietnam, where much rice is grown, is particularly vulnerable to sea level rises, flooding and therefore increased salinity in the soil.”

“We urge everyone involved in the rice value chain to focus on sustainable rice because it really can help move the needle when it comes to emissions, for methane and for nitrous oxide. As a food staple, rather than ‘luxury ingredient’ like coffee and cocoa, rice can’t command much of a sustainability premium, so more than anything it requires support from multiple parties from brands to retailers, financiers to governments, to achieve scale,” Barber notes. 

The Sustainable Rice Platform has defined the performance indicators and the clear metrics which is the first hurdle, now it’s all about implementation. “We hope this will gather momentum as word of mouth among the farmers evidences the benefits of SRP – around 20 percent better yields, with 20 percent lower costs for the farmer and yet around 50 percent lower methane emissions and water consumption,” she adds.

What’s wrong with rice? 
Rice is one of Southeast Asia’s most significant crops and the financial backbone for millions of farmers across the region. As highlighted by the recent IPCC global warming report, the yields and nutritional value of rice face net reductions should temperatures rise. 

Consequently, this will impact millions of farmers and families, particularly those on low incomes. 

Rice is also a leading cause of climate change. Methane, a greenhouse gas (GHG) which is up to 34 times more potent than carbon dioxide, is emitted as a result of rotting vegetation in the water-soaked paddy fields, also impacting on water security. Climate-smart agri-practices such as the removal of rice straw can reduce methane emissions by 70 percent, but farmers need training and support from the market.

Who can help and how? 
Brands and Retailers: Commit to promoting and selling sustainable rice 
Developed countries consume 23 million metric tons (MMT) of rice every year. Major brands and retailers can catalyze change by choosing the SRP as a procurement standard and promoting awareness of better rice production systems to consumers. Developed by multiple parties, SRP is a simple “plug and play” approach. 

Financial Institutions: Reduce interest cost for sustainable rice farmers 
More resilient production systems from sustainable projects would reduce variance in production – and thereby prices – and offset risk. Financial institutions should reflect this in lower interest rates for farmers who commit to sustainable rice production. A 0.25 percent reduction in interest rates can potentially translate to US$500 million in cost savings per year for participants higher up in the rice supply chain, which could, in turn, be passed down to farmers to incentivize the switch to SRP rice. 

Insurers: Reduce premiums for more resilient sustainable rice producers 
The lack of risk management tools in the market is a hindrance for farmers’ income and disruptive to long-term engagement. Improving insurance offerings are a necessary first step to better credit offerings at farm-level. 

Agronomists and scientists: Focus on field-level improvements to improve resiliency and clarify GHG reduction methods 
Despite a great deal of work, there are emerging new findings suggesting that the methane problem is compounded by nitrous oxide releases (298 times more potent than carbon dioxide) and outdated farm practices. Understanding the practical solutions that can be delivered to the farmers quickly and providing better tools to measure the GHG impacts of these choices is imperative. 

Governments: Reduce tariffs and taxes for sustainable rice 
The 2017 global duty for rice (weighted by volume) is 32 percent. A 1 percent reduction in tariffs for sustainable rice would be worth more than US$150 million per annum in savings for exporters, which could, in turn, be passed down to farmers to incentivize the switch to SRP rice. 

By Elizabeth Green