Rice cultivation in Thailand: two million euros generate 120 million

Ubon Ratchathani province in north-eastern Thailand, just after sunrise. Thanu Thanhakij is walking along the edge of his rice field. By eight o’clock, the sun is already high in the sky. Water is in short supply – and rice needs a lot of it. In the past, his field would be flooded for months on end. But now the farmer only floods his field periodically. This not only saves water and money – it also reduces methane emissions. Because when the soil is not permanently wet, the microorganisms within it produce less of this climate-damaging gas.

Thanhakij is one of 3.7 million rice farmers in Thailand. His field is part of one of the largest climate partnerships in the rice sector. It was launched with EUR 2 million from the German Development Ministry (BMZ). Today, the project is worth EUR 120 million. The funding comes from companies, climate funds and Thai partners. GIZ brings them all together.
 

Many years of collaboration with Olam Agri

The partnership with Olam Agri began over 10 years ago. The company is one of the world’s largest rice traders. Working with teams of Thai trainers and Olam, GIZ provided training to more than 36,000 farming families. They learned how to use fertiliser and water more efficiently. Emissions fell by 21 per cent, whilst incomes rose by 20 per cent. The volume of certified, high-quality rice grew from zero to 400,000 tonnes.

The standard for sustainable rice is set by the Sustainable Rice Platform (SRP), an international consortium founded in 2011 by the International Rice Research Institute (IRRI), the UN Environment Programme and GIZ. Together, they developed the world’s first standard for sustainable rice cultivation. It sets out how much water, fertiliser and plant protection product should be used and how rice farmers should be fairly remunerated. The SRP seal makes sustainable rice cultivation verifiable – and thus also traceable for the market.
 

From the rice paddy to German supermarket shelves

This is precisely the approach Olam Agri is based on. The company purchases rice in guaranteed quantities. Fixed-term purchase contracts and incentives reward farmers for sustainable cultivation. Paul Nicholson is Head of Rice Research and Sustainability at Olam Agri. ‘Smallholder farmers have been able to improve their incomes whilst reducing the environmental footprint of rice farming,’ he says. ‘They have significantly reduced water and fertiliser use, as well as their greenhouse gas emissions.’

Olam Agri is not alone. Other major companies in the food sector, including Mars, Ebro and PepsiCo, are also involved and buy the rice. Ignacio Yuste Sanchez heads up the Ebro subsidiary Herba Bangkok. For him, the partnership is a pre-competitive space: companies collaborate on training and standards but remain competitors when it comes to sales. No single company can tackle the climate risks associated with rice cultivation on its own. SRP-certified rice is now on the shelves at Lidl in Germany. It is also stocked by supermarket chain Albert Heijn in the Netherlands.
 

Climate finance: public funds open the door

The framework is provided by develoPPP, the German Development Ministry’s programme for cooperation with the private sector. GIZ implements the projects in partnership with companies, which must cover at least half the costs. GIZ trains farmers, advises ministries and coordinates between all parties. The companies promote standards and open up sales markets. Since 2024, the Green Climate Fund (GCF) – which finances climate protection and adaptation in developing countries and emerging economies worldwide – has also been involved.

Access to capital remains a challenge. Many rice farmers in Thailand are in debt. Fewer than one per cent own a harvesting machine. GIZ and its partners are therefore working with the Thai Bank for Agriculture and Agricultural Cooperatives. Together, they are developing loans for climate-friendly technology designed to enable investment without further increasing debt.

Private investment as leverage for climate action

In October 2026, the World Bank and the International Monetary Fund will meet in Bangkok. At the top of the agenda is the funding shortfall for climate action. To address this, poorer countries need around USD 1.3 trillion a year. Industrialised nations have pledged USD 300 billion. Which leaves a gap of one trillion dollars – every year. This cannot be bridged by public coffers alone. Thailand’s rice fields offer a potential solution.

Rice feeds half the world’s population. Making its cultivation climate-resilient not only ensures food security, it protects the climate at the same time. Thanu Thanhakij has a more matter-of-fact perspective: ‘If we reduce our costs, we’ll have more money to improve our financial situation and secure a livelihood for our families.’