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How OLAM used Traceability for Sustainable Rice Production

Olam, a company that works with thousands of farmers across India chose Tracex’s blockchain solution to promote sustainability in basmati rice production

Case Study

Global rice consumption has been slowly increasing over the years, from 437 million metric tons in 2008-09 to 504 million metric tons in 2020-21. The tiny grain bears quite a large responsibility, with it being the staple food of more than half of the world’s population – more than 3.5 billion people depend on rice for more than 20% of their daily calories. Global consumption is driven by population and economic growth, especially in many Asian and African countries, with China and India, the world’s most populous countries consuming the most. 

WHY THE NEED FOR A SUSTAINABLE RICE PLATFORM 

Rice is one of India’s largest agri-export commodities. This means that huge portions of Indian farmlands are dedicated to growing it. This comes at a cost. Rice needs huge volumes of water to grow: 1 ton of rice requires 3000 liters throughout its growth cycle. This puts a huge stress on the limited water resources that we have access to. Apart from this, rice is a substantial contributor to global warming. According to WRI, growing rice produces methane, that is more than 30 times as potent as carbon dioxide.

Methane from rice contributes around 1.5 percent of total global greenhouse gas emissions and could grow substantially.  

These worrisome statistics resulted in the formation of The Sustainable Rice Platform (SRP). It is a multi-stakeholder international alliance with over 100 institutional members from public, private, research, civil society, and the financial sector. SRP works with partners to transform the global rice sector by promoting resource-use efficiency and climate change resilience, both on-farm and throughout the rice value chain. 

The Indian wing of Olam International – one of the SRP members – began the groundwork. Introducing and adopting sustainable practices in rice production is a crucial goal of the SRP, and Olam India was keen on achieving the same. To summarize, Olam is a company that works directly with thousands of farmers across India, and is involved in E2E management for various agri-commodities like coffee, rice, spices, nuts and cotton.  The company’s services include sourcing, processing, logistics and even marketing.  

THE CHALLENGE 

Olam selected Haryana as the first Indian project site to promote sustainability in Basmati Rice production. There were numerous challenges faced:

  • Addressing and handling multiple stakeholders in the Basmati value chain.
  • Manual record keeping systems.
  • Lack of digitization in the supply chain
  • Management of Crop Input Resources
  • Tracking real-time package of practices during crop production.
  • Monitoring and Tracking residue-free produce during sampling and procurement.
  • Time-consuming and cumbersome tasks for the project managers
  • Validating sustainable agriculture practices adopted.

TRACEABILITY SOLUTIONS TO THE RESCUE

Olam connected with TraceX to address these issues, using their blockchain powered traceability solution. Using sustainability and technology as key enablers, both companies together were able to onboard multiple participants across Olam’s supply chain onto a single connected platform. TraceX provided a one-stop solution FOODSIGN  for all their multi-application requirements on real-time mode. This involved: 

  • Data collection related to farmers, crop information, recommended activity updates, follow ups, and even the cost of cultivation at each individual level. 
  • Crop area-wise recommendation of ideal doses of water, pesticides and other inputs for different activities. 
  • Digitization of dairy related activities by farmers, Sampling process collection, Quality assessment, keeping a tab on procurement via the agents channels in real-time. 
  • Tracking the field implementation personnel performance. 

BENEFITS FOR OLAM

By adopting the TraceX Solution, Olam India was able to reap multiple benefits. Communication with farmers who were grouped in clusters was much simpler now.

  • Digitized records of transactions with auditable data accessible in minutes. 
  • Mutual transparency and trust on the shared platform across the value chain.
  •  94% Package-of-Practice compliance was achieved across 12 Krishi sakhi cluster and 250 farmers. 
  • Follow-ups on Field agent targets and output was faster, and this helped them achieve the assigned goals in time.
  • Digitizing the paddy sampling processes for MRL detection and follow-up helped procurement happen efficiently, with acceptable grade paddy. 

The farmers who are part of Olam’s sourcing network have also reported increased incomes by as much as 12% as they spend less on resources; they have also recorded a reduction in water consumption and pesticides by ~85% on average. 

Win-Win for OLAM and TRACEX

Overall, Olam’s collaboration with TraceX has had a threefold impact – social, economic and environmental. Moreover, TraceX’s contribution was in alignment with Olam’s sustainability strategy, minimizing any deviation or wastage of resources, and conforming to the very vision and purpose of Olam

The tiny grain is now not only responsible, but also sustainable.  

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