'With a Better Environment, We’ll Have a Better Crop': How Fargreen Is Closing the Loop in Vietnam’s Rice Production

Jul 26, 2019 1:00 PM ET

Vietnam’s landscape is layered with green and golden rice fields. One of the largest exporters of rice in the world, the country produces more than 20m tonnes each year.

More than 80% of the country’s arable land is cultivated for rice production, and at least 15 million smallhold farmers rely on rice production for their livelihoods.

Trang Tran grew up among this culture. It’s what inspired her to create Fargreen, a social enterprise dedicated to building sustainable farming communities.

She witnessed how the farmers would burn the excess rice straw (the waste product from the crop) to destroy it, drawing carbon dioxide into the air and damaging their lungs.

“They burn it openly in the fields, it affects their health and the health of the people – especially the farmers who are among the poorest in the country,” says Tran.

Although Vietnam has made huge strides in reducing poverty, most of Vietnam’s rural poor are farmers, earning as little as $3 (£2) per day.

“Seeing this, I was inspired to find a sustainable solution to balance this all, to stop the burning act and at the same time provide the farmers with more income,” she says.

The country burns an estimated 40m tonnes of rice straw as a byproduct, releasing more than one tonne of toxic carbon dioxide and nitrogen monoxide into the environment for every tonne of rice straw burned.

The practice takes place in other rice-producing countries, such as the Philippines and India, too. Tran says it was even happening in the US and Japan before it was banned.

“The scale of the problem is complex. It’s the cheapest and quickest way for farmers to get rid of waste so they can start another crop. They’re aware of the consequences of breathing in smoke, but they still have to do it because no one can take care of this waste for them,” says Tran.

In 2012, Tran started working on a solution for Vietnam’s rice farmers while she was studying for an MBA at Colorado State University in the US. Three years later, she founded Fargreen, based on the environmentally friendly closed-loop production techniques, aiming to benefit local farmers while reducing waste.

In 2016, Fargreen joined the United Nations’ Business Call to Action (BctA), pledging to help 1,000 smallhold rice farmers build environmentally sustainable livelihoods, increasing their income by 50%. BCtA aims to accelerate the UN sustainable development goals through inclusive business models.

Fargreen works as a cooperative, helping farmers work together to introduce mushroom growing as an additional produce. It buys the waste rice straw from farmers who are part of their network, and involves them in the process of growing edible mushrooms using the rice straw as the only substrate – which effectively means the rice straw acts as a soil for the mushrooms.

Once the mushrooms are harvested, they’re sold under the Fargreen brand. Farmers who are part of the cooperative get a monthly base salary, giving them stability if production is low.

Farmers produce rice twice a year and can only earn income when they sell the rice. Between seasons, many will head to cities to find extra work. Mushroom production takes place throughout the year, so Fargreen hopes to bridge the gap between rice seasons so that farmers and their families don’t have to leave their homes in search of other jobs.

“We’re building a sustainable green community where all their food-producing activities such as rice farming, vegetable garden and mushroom production all happen in a closed loop. The waste from one will be recycled for the production of another,” says Tran.

“In a country such as Vietnam, which is one of the most affected by climate change, there’s a chicken and egg situation. Farmers are having a hard time with crops because of climate change and pollution. So with this solution, we’re tackling multiple things at the same time.”

Fargreen is currently working with 50 farmers in the Thái Bình province, and piloting in three other villages. “They [the farmers] are creating the pressure for us to expand so more farmers can join us,” she says.

The company aims to prevent more than 4,000 tonnes of greenhouse gases from being released into the environment. The process also creates biofertiliser, meaning the farmers can move away from using damaging chemical fertilisers.

“We’re able to provide them with this safe and non-chemical environment,” says Tran. “Farmers can still do what they do, but with higher income.”

But Fargreen didn’t come without challenges, says Tran. “From raising capital, starting any business is hard. This business is even harder because we’re working with the community.”

Fargreen hopes to up the standards of food production. “We’re aiming for an upscale market, where they have a very strict standard about their food – we want our farmers to get to that level, so they’ll own more in a more sustainable way. It’s hard to survive in the market and it takes a lot of time to train the farmers to be confident with the standards that we set.”

Despite these hurdles, Tran says the farmers have already seen the benefits of this business.

One woman with young children, whose husband went to the city to find work, joined Fargreen after struggling to find a job in a factory. As a farmer with Fargreen, her income has now increased by 50%, so she is able to support her family. “Hopefully, we can bring people back to the field,” says Tran.

Part of Fargreen’s success is working in the form of a cooperative. “It’s the way of living here – if you come to most villages it’s very natural that it’s a community. If we work with villages as a whole, as a community, we’ll be able to look after one another. We are trying to integrate everybody into the system,” she says.

“Having good, safe food and a safer environment go hand in hand. With a better environment, we’ll have better food crop. It’s a social security for everyone.”