Increasing rice farmers’ income through added value and implementing a circular economy

Abstract

Rice farming is an important economic activity in the national economic setting because it provides employment opportunities for rural families and produces rice as a main staple food for Indonesians. However, rice farmers face an economy of scale issue due to small-scale farming, where around 80% of rice farmers cultivate less than 0.5 ha with an average income from rice farming of approximately IDR 5.46 million/ha/season. This income is obtained only from grain production, whereas parts of the rice plant have the potential to be processed and generate revenue. This study aims to identify opportunities to increase rice farmers’ income by creating added value and processing rice by-products, based on a circular economy approach. The method used was a literature review from published scientific journals supported by secondary data analysis. The study results indicate opportunities to increase rice farmers’ income by utilising straw for organic fertiliser, husk for biochar, many parts of plants for animal feed, and rice bran for functional food. This study recommends that to implement these economic circular activities efficiently, farmers have to work in farmer group organisations such as farmer corporations or farmer-owned enterprises.