Rice straw value in Mekong Delta generates over 250 million USD/year

On November 19, at the workshop “Rice straw value chain: Policies and investment opportunities,” jointly organized by the Department of Cooperatives and Rural Development (MAE), VIETRISA, and IRRI, a team of experts from IRRI and Can Tho University released the first comprehensive study on the rice straw value chain in the Mekong Delta.

The study was conducted in 14 communes across Can Tho City and the provinces of An Giang and Vinh Long, aiming to map the rice straw value chain.

Dr. Nguyen Hong Tin, representing the research team, stated that the study identified the economic value of each stage in the rice straw value chain. For example, processing or composting rice straw bales can generate an average profit of 2,500 VND per bale. If traders buy and sell the bales, profits can reach 3,600 VND per bale. For traders purchasing and selling pre-baled straw, profits increase to 4,800 VND per bale.

Notably, if straw is used for mushroom cultivation, farmers can earn an average profit of about 37,500 VND per bale; for vegetable cultivation, profits are around 34,200 VND per bale; and for livestock use, about 7,700 VND per bale.

Dr. Tin emphasized that by effectively leveraging four applications, mushroom cultivation combined with composting, livestock feed, and vegetable cultivation, the rice straw value chain in the Mekong Delta could generate over 6.6 trillion VND per year.

The study also identified the key actors in the rice straw value chain, including brokers, service providers for baling, transportation service providers, traders, and end-users. Among them, traders play a leading role, providing baling services while also purchasing, distributing, and creating market outlets, which gives them the highest profit margins.

According to the research team, despite these results, the rice straw value chain still lacks a clear policy framework and support mechanisms. A significant gap lies in the fact that rice straw is still regarded as a by-product rather than a biomass resource, lacks national technical standards, and lacks dedicated logistics infrastructure.

Moreover, there is currently no official market platform for rice straw; transactions are mostly conducted informally via phone agreements, without proper invoicing, tax mechanisms, or preferential credit terms. Policies to reduce straw burning are still insufficient and not integrated into a carbon mechanism with a clear MRV process. Additionally, the rice straw value chain lacks labor safety standards, official statistics, and provincial-level monitoring indicators.

Based on these findings, specialized agencies plan to propose an action roadmap: establish a legal status for rice straw as a biomass resource; issue national standards (TCVN/QCVN); provide credit incentives; develop biomass logistics; integrate carbon mechanisms with an MRV system; promote digital transformation; and strengthen technological research.

Mr. Le Duc Thinh, Director of the Department of Cooperatives and Rural Development, stated that the Mekong Delta produces about 25-28 million tons of rice straw annually, a significant biomass resource with substantial economic potential. However, only 20-30% of rice straw is collected, while the remainder is burned in fields, causing air pollution, soil degradation, and greenhouse gas emissions.

As the Mekong Delta accelerates the implementation of the One Million Hectare Project and commits to Net Zero by 2050, Mr. Thinh emphasized that rice straw management has become a strategic pillar of the green transformation in the rice sector, no longer just a technical issue.

He suggested that institutional and legal frameworks need to be improved to recognize rice straw as a biomass resource. At the same time, standards and technical regulations should be issued for collection, storage, transportation, and reuse, laying the foundation for a sustainable rice straw market.

Reorganizing the value chain with cooperatives at the center is considered necessary by developing cooperative models that provide mechanized collection services, establish aggregation points, and link with businesses producing organic fertilizer, biochar, and biomass pellets. This approach ensures a stable supply and increases farmers’ incomes.

In addition, financial resources should be mobilized by leveraging value chain financing, support mechanisms under Decree 98, credit funds, and ODA. Importantly, specialized agencies need to develop an MRV system for rice straw soon to integrate into carbon credit mechanisms, providing economic incentives for farmers and businesses.

With stakeholder participation, the workshop established a platform for dialogue and action commitments to develop a sustainable rice straw value chain.

The comprehensive study on the rice straw value chain in the Mekong Delta is part of the RiceEco Project, implemented by the Cambodian Ministry of Agriculture, Forestry and Fisheries, IRRI, and Vietnamese partners during the 2023-2026 period. The project is funded by the Mekong-Korea Cooperation Fund (MKCF).

So far, the project’s models have shown promising results. Collecting rice straw can reduce up to 3 tons of CO2 equivalent per hectare compared with incorporating straw into flooded fields. Straw residues after mushroom cultivation, low-quality straw, and wet straw can be used to produce organic fertilizers through mechanized processes combined with biotechnology.

* Currency exchange: USD 1 = VND 26.138 (source: Vietcombank)