Transforming green production to catch up with world consumption trends

Mr. Nguyen Duy Thuan, General Director of Loc Troi Group.

Currently, the import markets are in the green trend, green consumption, so the requirements and standards are also stricter. So, in order to meet the standards of import markets such as EU, Japan, UK..., how did Loc Troi change production?

Green consumption trend is based on the theory of environmental protection, especially activities to reduce greenhouse gas emissions. The EU and the US have issued regulations related to reducing greenhouse gas emissions, starting from 2024 and will increase the level each year. For rice production, it is one of the largest sources of greenhouse gas emissions globally. Therefore, the development of rice production processes to reduce emissions is one of the world's top concerns.

Loc Troi recognized this challenge many years ago and has embarked on a green production model from 2018 to 2020, it will be successful. Loc Troi is the first company in the world to be confirmed by international accrediting agencies as the world's greenest rice producer through the scoring system of the sustainable rice production platform (SRP: Sustainable Rice).

​After choosing the optimal model, Loc Troi invited farmers to participate, conducting a series of training programs over the years to gradually put the theoretical model into practice for each farmer household. The goal of the enterprise is not only to prove the model, but also to ensure that the model can be replicated and disseminated on a large area and produces results on a national scale.

After achieving a perfect SRP100 score certification in 2020, Loc Troi continues to maintain and expand, and update the latest requirements according to international standards. In 2023, Loc Troi achieved the SRP100 score for the fourth time in a row and is the only company in the world that can deploy on a large scale and is ready to build an entire area of millions of hectares of cultivated rice according to the best standards. The SRP100 standard ensures that Loc Troi's rice can meet all the requirements for rice quality in the world.

The current green consumption trend is global; for fastidious markets such as Japan, EU, UK, France, etc., the criteria are stricter. In order for Vietnamese rice to reach the standards of fastidious markets, Loc Troi has taken the following steps: determining quality standards for each market; develop a cultivation process (step by step implementation throughout the process of harvesting, preserving and producing rice); select the land and farmers in accordance with the criteria of the market; organize farmer training; build quality assurance program and check product quality (QA & QC).

In order to fully implement the above steps, enterprises must update trends and develop specific orientations to transform themselves in each period; Initially, Loc Troi also had difficulties in organizing production because, Vietnam's agriculture was still fragmented, farmers were not used to following the correct planting process. In order to enter these markets, it is necessary to source agricultural products to ensure the stability of output, to meet the schedule and market standards. Therefore, Loc Troi Agricultural Research Institute had to standardize the farming process, and Loc Troi's force of agricultural technicians going along with farmers to not only supervise the cultivation process to ensure the progress, output and quality of output rice according to export requirements, but also to ensure a reasonable and ethical profit distribution for farmers. In factories, production processes are also standardized by Loc Troi, and machinery and equipment systems are upgraded (from drying, milling, and preservation) to keep the best quality of agricultural products.

Loc Troi is the first company to create a carbon certificate for Vietnamese rice, so can you share your experience in implementing this process?

To carry out this process, the enterprise has built material areas according to international standards and has an MRV system as a tool to evaluate activities to reduce greenhouse gas emissions. The rice material areas of Loc Troi are organized to produce according to the cultivation process according to international sustainable standards (SRP). This is the procedure issued by the International Rice Research Institute (IRRI) and the United Nations Food Organization (FAO). The certifying organization is Control Union/Global GAP. The annual cultivation area of Loc Troi is equivalent to 500,000 hectares of crops, each crop lasts an average of 123 days, most of which are cultivated with 3 crops per year.

Loc Troi's MRV (Instrument for Assessment of Greenhouse Gas Emissions Reduction) system has been deployed since 2018 and has now been digitized almost entirely, accessible online as well as verified in the field with farmers and in the field. Depending on the measurement of which MRV system is applied, simply multiplying by the cultivated area will get the corresponding number of carbon certificates. Loc Troi is looking for partners and investors to provide carbon certificates to the market both domestically and internationally.

In order to create a green carbon certificate for rice, what do you think businesses and people need to do for sustainable green development?

First, an internationally recognized Measure-Report-Evaluation (MRV) system is required. Next, it is necessary to issue the standard farming process of this MRV system. Clear regulations on the responsibility to contribute to the state and the sold portion of the business when obtaining the carbon certificate and finally the commitment to profit from the sale of the carbon certificate (after deducting the contribution to the government and MRV costs) will be fully transferred to farmers participating in the process of separation.

What is your forecast for the rice market in the last months of the year and 2024?

Currently, the world rice supply is decreasing steadily while the population increases steadily in the future, leading to a steady decline in world rice stocks in recent years. Compared to 3 years ago, it has decreased by more than 100 million tons of rice, this is not good news for rice consuming countries and especially for the food security of countries that cannot grow rice and they need to supplement their rice sources. This helps Vietnam, Thailand, and India, which are the major rice growing countries in the world stabilize their food sources in the long term instead of relying on traders to buy small batches at an unstable price as before.