From Farm Waste to Farmer Wealth: A Rice-Straw Business Story
By transforming agricultural waste into mushrooms, compost, and low-emission rice production, Mr. Dong Van Canh and the New Green Farm Cooperative created a sustainable circular enterprise that lowered farming costs, generated new revenue streams, and expanded local employment opportunities in Vietnam.
“The circular model gives farmers more than one way to earn.”
When Mr. Dong Van Canh looked across the rice fields around New Green Farm Cooperative, he saw something farmers had long treated as an unavoidable end to every harvest: piles of straw. Most of it was burned. Some were incorporated into flooded fields, where decomposition could affect water and soil quality.
The cooperative, established in 2023 with seven core members, was still finding its footing. Its main activities were rice and vegetable production. Straw mushrooms were grown using traditional methods in small, fragmented plots that were highly vulnerable to weather and other environmental conditions. Only five members were directly involved, and income came mainly from rice and limited mushroom production.
The machine was what first convinced him that another model was possible. Through work involving the International Rice Research Institute (IRRI) and its partners, New Green Farm was introduced to mechanized rice-straw composting and a wider circular business approach. Rather than treating straw as waste, the cooperative could collect it, use the freshest material to cultivate mushrooms, transform spent mushroom substrate and other agricultural residues into organic fertilizer, and return that fertilizer to rice, fruit trees, and vegetables.
Building the circular business
The intervention has connected technology with practical learning. IRRI-supported demonstrations showed how a compost turner could reduce the labor and time required to process straw at scale. Farmers also learned the science behind straw-based compost and how it could perform alongside other fertilizers. Under the Mekong-Republic of Korea Cooperation Fund-supported Rice Straw-Based Circular Economy for Improved Biodiversity and Sustainability (RiceEco) Project, straw collection, mushroom cultivation, and composting were promoted not as isolated practices but as components of viable local businesses.
Mr. Canh learned by doing. His role shifted from physical work to organizing production, managing people, developing products, and finding buyers. The seven core members remained but participation in the circular business grew. IRRI training strengthened their technical capacity, while access to mechanized straw-baling services through Tu Sang Machinery improved the supply of raw material. The cooperative also maintains production links with around 100 rice-farming households across 148 hectares.
The physical expansion tells part of the story. Before RiceEco, the cooperative had about 500 square meters for general production and 2,000 square meters for mushrooms. It now operates approximately 8,000 square meters of outdoor mushroom area, 2,000 square meters for compost production, and 500 square meters of production facilities and warehouse space. Since 2025, it has also rented additional land when needed to satisfy demand. The expansion created local work across straw collection, handling, mushroom cultivation, composting, and sales.
Several products, one value chain
New Green Farm's strength is not a single product, but the way its businesses reinforce one another. Rice remains the foundation, accounting for about 60 percent of income. Mushrooms now contribute around 30 percent, while compost, vegetables, and other crops contribute the remaining 10 percent. Indoor and outdoor mushroom operations can use about 9,000 straw bales a year. At an estimated profit of USD 0.38 per bale, they generate roughly USD 3,400 in annual profit. Diversification gives the cooperative several ways to earn and reduces its dependence on rice alone.
Fresh straw is the starting material. Mr. Canh estimates that about half of collected straw bales can be used directly for mushroom cultivation. The rest can be sold, but he recognizes that simply moving straw elsewhere does not guarantee better environmental outcomes. The cooperative therefore shares production knowledge and encourages other users to adopt the technology, helping create buyers who can use straw productively. Packaging, developed with advice from local agriculture authorities, has also helped move compost from farm input to a product that neighbors can buy for their gardens.
The cycle continues after the mushrooms are harvested. Spent straw is combined with rice-husk ash, coconut coir, cattle manure, and other materials to make organic fertilizer. Following technical training, composting capacity reached about 72 tons a year. At an estimated profit of USD 38 per ton, this adds approximately USD 2,700 in annual profit. The compost improves soil health and crop quality, while buyers include neighbors and wholesalers serving markets as far as Ho Chi Minh City and Phu Quoc.
The model also improves the economics of rice itself. When straw-based organic fertilizer was combined with high-quality, low-emission farming practices, New Green Farm reported a 40% reduction in chemical nitrogen fertilizer use, input cost savings of approximately VND 1.5–1.7 million (USD 57–65) per hectare per season from reduced fertilizer and pesticide use, and additional income of about VND 350,000–400,000 (USD 13–15) per hectare per crop from selling rice straw. The gains therefore come from both sides of the business: new revenue from straw products and lower costs in the core rice enterprise.
Growth creates its own challenges
Success has exposed the cooperative's next constraint: capital. The demand for mushrooms and compost is high, but their production cycles do not generate cash at the same speed. Mushroom cultivation needs money upfront, while compost takes time to mature and sell. Waiting for compost income can delay the next mushroom cycle. At the same time, mushroom residues accumulate and require machinery to be processed quickly. A circular system may close material loops, but the cash-flow loop still needs financing.
Storage and logistics are equally important. During peak periods, the cooperative can struggle to secure enough straw even as it works to reduce burning an estimated 90 to 95 percent in its operating area. A larger warehouse would let it collect and store straw when supplies are abundant, while mechanized handling could lower transport and labor costs. For Mr. Canh, the next phase of support must therefore go beyond training. Affordable finance, machinery, and storage infrastructure are what will allow the model to grow without losing efficiency.
A business that changes lives
The transformation is visible in Mr. Canh's own household. As the enterprise expanded, his wife took on management responsibilities alongside work in onions and chili peppers. Additional income has helped the family invest in their children's education. Around them, local workers gained more stable employment, neighbors began buying compost, and other cooperatives started asking how they could build similar operations.
Mr. Canh is now invited to speak across the Mekong Delta and to join field assessments for cooperatives considering the same model. The farmer who once needed to be convinced by a machine has become a business mentor, sharing lessons on production, markets, and the realities of scaling. He tells other cooperatives to look at both sides of the circular model: its environmental benefits and the income it can generate.
RiceEco's wider experience supports that message. In its final report, the project reached 5,084 unique farmers and related stakeholders (73% male, 27% female) and helped pilot four businesses in Vietnam and Cambodia. At New Green Farm, those results take human form: a director with a larger role, a family investing in its future, workers with new jobs, farmers linked to better markets, and greener, cleaner fields.
For Mr. Canh, the business remains unfinished. He wants continuous expansion in production, land, machinery, and market reach. Yet the central change is already clear. Before RiceEco, straw marked the end of the harvest and cost to the environment. Today, it begins another production cycle. It becomes mushrooms, fertilizer, healthier crops, additional income, and employment. New Green Farm did more than stop burning a byproduct; it learned how to build a business from what farming once left behind.
This innovative work under the 1mHa Program is made possible through the support of the MKCF-funded Rice Straw-Based Circular Economy for Improved Biodiversity and Sustainability (RiceEco) Project, CGIAR Scaling for Impact program, GIZ-funded Promoting rice straw innovations project, and TaiwanICDF Capacity Building for Sustainable and Low-Carbon Rice Innovations in Southeast Asia (CABIN) project.