On 15th September 2018, the Hult Prize Foundation celebrated the Grand Finals of their global accelerator program at the UN Headquarters. The Foundation challenged 100,000 students around the world to build a social enterprise utilizing energy innovations to transform the lives of 10 million people by 2025. Thus known as the Nobel Prize for students, the winning project would be awarded 1 million USD.
After a year-long process, there were 6 finalists presenting at the UN, whose ideas ranged from solar ATMs and seaweeds to solar sterilization devices and rice driers. After the judges’ deliberation, former President Bill Clinton announced the winning team – Rice Inc.
Four young faces stepped up to the podium to accept the award, all wearing white shirts and green longyis, the traditional Burmese attire.
What is Rice Inc. and Who Are They?
Rice Inc., formerly known as SunRice, has been operating in Myanmar since March 2018. They have collaborated with International Rice Research Institute (IRRI) as well as Myanmar Rice Federation, with their pilot sites being situated near Latpadan in the Bago Region.
The team is comprised of seven members from 4 different nationalities – Malaysia, Lao PDR, Hong Kong, and Czech Republic. The academic backgrounds are equally diverse with expertise in Biomedicine, Law, Science, Economics and Psychology.
What are the challenges being tackled by Rice Inc.?
The most pressing challenge for Myanmar rice farmers begins after the harvest. “Either they immediately sell their rice wet, or they would use traditional sun-drying methods,” said Lincoln from Rice Inc. If it is wet, they get a low price; meanwhile, the current traditional drying methods result in physical losses and bad quality, and therefore a low price, too.
Storing it for a period increases the price and benefits the farmers, but unfortunately, they cannot afford the time. Most of these farmers are trapped in a vicious cycle of debt – they take the loans in the beginning of the season, and by harvest, they need the money upfront to pay back. Hence, they are forced to sell their rice immediately, and drying or storage, if at all, are not viable options.
These are the prospects of a normal year without any disaster outbreaks such as flood, drought or post-harvest cyclones.
What is their solution?
Rice Inc. is a standardized service that helps farmers dry and store their rice better so that they can reduce their post-harvest losses as well as increase their income.
The company would build rice dryers with certified technology to minimize the drying losses, and let the farmers dry the rice for free. They would then buy those rice to be stored, and when the prices are higher, can sell it off to the market and exporters.
Initially, they thought about renting the rice dryers to the farmers, charging 200-250 MMK per rice basket. However, the investment of the dryer is very high (about 10,000 USD), and charging the indebted farmers is not a great revenue.
Another alternative would be micro-financing options. Since it would be capital intensive for the company to buy and store a large quantity of rice, they are thinking of collaborating with micro financing institutions to help the farmers extend the payback period.
Does it Work?
Rice Inc. team has built their first rice dryer which started operating on the very same day as the Grand Finals, and they couldn’t be more excited to meet their first customers.
“One customer said that the commercial value of the rice depends on the water content,” said Rachel from Rice Inc. “If it’s wet, she had to sell it on a very low price. But now she has our drying service and she is able to dry it first and sell it at a higher price, and she can really reap the benefits of higher income.”
Rice Inc. is so far the only initiative from abroad that is tackling this issue in Myanmar rice industry. There exist a few competing local practices where some people are building their own dryers. Nevertheless, these are not certified dryers and may cause more damage than the benefits. The only other competition would be sun drying.
The Hult Prize Journey: What’s Next?
“The Hult community is very supportive,” said Lincoln. “All they ask is – do you have an idea, and do you want to learn?” Throughout the stages, he also recalled that as it got harder, they had a lot of supervisors and mentors helping along the way.
Additionally, the team was one of the 2018 TFF Challenge Finalists in Rio de Janeiro where they won the 2,500 USD Borlaug Prize.
The company is currently registered in the U.S. as a social enterprise, and planning to register in Myanmar. The majority of the team members will be graduating in June 2019 and they will have to complete the check-points of implementation for their 1 million USD to be allocated in pieces. In the upcoming weeks, they will be discussing with IRRI on future areas of expansion in Myanmar, and/or Southeast Asia.
Future Outlook for the Myanmar Rice Industry
Myanmar economy is predominantly based on agriculture which contributes to 38% of GDP and employs more than 60% of the labour force. The rice export as of 2017/2018 totalled 3.3 million tons, ranking at No. 5 globally but still trailing behind the regional peers of Thailand and Vietnam whose paddy yields per hectare are twice that of Myanmar’s. The country is rich in fertile soils and water resources, but yet, an average agricultural worker earns only 1.8-2.5 USD per day during monsoon. In order to promote the productivity and income, and to create value-added products for export, it is crucial to reflect the traditional methods, adapt entrepreneurial approaches and enhance the modern technology.
Note: Rice Inc. is not a startup from Myanmar, nor does it currently have any Myanmar nationals.