Organic and healthy products are not necessarily costly. This is what O-Rice Beras Organik has aimed to prove this since 2008 through its innovative business model and strong research and development program. The combination does not only deliver affordable organic rice to its consumers, but also improve farmers' welfare and empower conventional farmers to practice sustainable organic farming technique.
Adeline Ayu Christanto
IPMI International Business School
Amelia Naim Indrajaya
CV Green Health Agriculture's remarkable innovations lay on its business model and research and development. It has made a breakthrough when it has decided not to own land to grow its rice, but to make land owners and farmers its partner with profit sharing scheme. It has provided seeds, organic fertilizer, and technical supervision to its partners, which were considered as initial working capital. By doing that, CV. Green Health Agriculture cut the distribution costs and make sure its consumer price is lower than its competitors.
Another innovation is in its effective organic farming method, developed by continuous research and development, which enables the company to produce higher yield than conventional organic farming method.
The influence and pressure from government subsidized chemical fertilizers and government controlled seeds has created scepticism among farmers on organic rice farming. Government effort to introduce and educate farmers on organic rice farming still can not surpass the impact of pressure of those two elements. Also, farmers are hesitant and wonder whether organic rice farming could resulted in the same amount of yield as the conventional method would produced. These factors contribute to the low supply of local organic rice in Indonesia.
In supply chain, local organic rice goes through long chain to reach its customers. From farmers, it is then collected by traders and then goes to sub distributors who distribute it via its agents. Since there is no such relationship between the traders and the farmers, traders tend to buy the rice at the lowest price possible from the farmers to maximize their gain from their next chain. This whole system results in high price on organic rice. Though it creates a 'high image' on organic rice and provides very good margin for those in the distribution chain, farmers and customers (those at the beginning and the end of the supply chain) do not benefit much from this model. This is how CV Green Health come with the innovation of the business model which favors the farmers and the end customers.
CV. Green Health Agriculture proves to its stakeholders that organic foods are not necessarily costly and with the right organic rice farming method, the yield can be higher than conventional organic rice farming. By doing the right organic rice farming method, not only the farmers and the end-customers get benefit out of it, but also the land and the rice plants are all benefited.
With its business model, CV. Green Health Agriculture minimizes its risk of crop failure. Its continuous research and development program results in better farming techniques that subsequently resulted in improved productivity.
CV. Green Health Agriculture creates awareness of organic rice farming and gives education about organic rice farming to farmers. The application of its research result not only is good for the land and the crop that grows on it but also for the farmers who receive better price for their rice and have higher yield.
Its embryonic program on youth empowerment project attracts young people in rural area to be interested in organic farming. In the future, it is expected that these young people will strengthen their villages economic and Indonesia's position as agricultural country.
For further info on the business, please visit the website at http://www.o-rice.com.
Rizky Ardi Nugroho, Mr.
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Business Website: http://www.o-rice.com/Home.html
Year Founded: 2008
Number of Employees: 11-50