Building New Industries from Rice through Circular Economy

Building New Industries from Rice through Circular Economy

Rice is the one dish you can always expect to find on the Filipino table. Whether paired with dried fish, sinigang, or adobo, it anchors every meal and every occasion. More than a staple food, rice is the lifeblood of farming communities and a foundation of rural economies. Filipinos consume an average of 118 kilograms of rice per person each year—one of the highest in Asia (Philippine Statistics Authority [PSA], 2022). 

For over 2.4 million Filipino farmers, rice is not just a crop but a livelihood that sustains families and rural economies (Department of Agriculture [DA]–Bureau of Agricultural Research [BAR], n.d.). From the ancient Banaue Rice Terraces in the Cordillera to the paddies of Central Luzon, the fertile plains of Iloilo and Leyte in the Visayas, and the rich fields of Cotabato and Bukidnon in Mindanao, generations have built their lives around it. 

Today, palay production is estimated at 20.06 million metric tonnes. It is   cultivated in over 4.82 million hectares across all 17 regions, contributing nearly a fifth of the nation’s agricultural output (Philippine Statistics Authority, 2024). Constant is its presence that we rarely stop to think about it—until prices rise, supplies run short, or harvests fail.

Rice Research and the Green Revolution

Producing enough rice has long been a national challenge. Even though rice has been cultivated in the Philippines for centuries, harvests were often vulnerable to droughts, pests, and the limits of traditional farming. During the Spanish colonial period, the country occasionally imported rice from Indochina when local production fell short (Corpuz, 1997). The American period brought irrigation projects and the founding of agricultural institutions, but by the mid-20th century, output still could not keep up with a rapidly growing population. Imports remained necessary to stabilize supply.

It was against this backdrop of chronic shortages that the International Rice Research Institute (IRRI) was established in Los Baños in 1960 with support from the Ford and Rockefeller Foundations. The Philippines was chosen as its base for strategic reasons: its tropical climate allowed year-round testing; the University of the Philippines Los Baños offered a strong academic partner; and the government welcomed the idea of hosting an international research center. From this hub, scientists developed IR8—the “Miracle Rice”—which revolutionized yields across Asia. 

The Irony of Import Dependence

The Philippines briefly tasted success in the late 1960s when the high-yielding IR8 variety helped the country become a net exporter of rice. But this achievement was short-lived. Structural problems like fragmented landholdings, weak irrigation, poor rural infrastructure, high input costs, and limited institutional support kept many farmers from fully adopting modern technologies (Balisacan & Ravago, 2003; World Bank, 2020). By the 1980s, the Philippines had once again become dependent on rice imports, and by 2023 it was the world’s largest rice importer, with full-year imports around 3.6 million metric tons, mostly from Vietnam (United States Department of Agriculture [USDA] FAS, 2023; Inquirer Business, 2025).  Meanwhile, local farmers continue to struggle with low farmgate prices, rising production costs, and the growing threat of climate change.

Adding to the problem are significant losses and waste. Post-harvest losses in the Philippines have been estimated at ~16.47 % (PhilRice and PHilMech, 2019) and in other contexts, rice losses from field to mill can reach 7–30 % (IRRI, 2020) depending on practices. By-products such as husks, bran, and straw are often burned or discarded, releasing greenhouse gases instead of being turned into new products and income streams.

This irony—that the Philippines hosts the world’s leading rice research institutions while remaining one of the most import-dependent nations—highlights the need for new approaches. It is also why rice was chosen as a key commodity in our Circular Economy project.

Valorization: From Waste to New Industry

Rice production does not end with the grain itself. Each harvest also yields husks, bran, and straw—materials that are often burned or discarded. In a linear economy, these are treated as waste. But in a circular economy, the goal is to keep materials in use for as long as possible, reducing dependence on virgin resources and minimizing environmental impact (Ellen MacArthur Foundation [EMF], 2019). This includes strategies such as designing products for longer life, reusing or recycling existing materials, and finding higher-value applications for by-products.

Valorization—transforming agricultural by-products into new, valuable products—is one important strategy within CE, but it is not the whole story. It requires research, technology development, and enterprise innovation. For rice, this could mean converting husks into biomass energy or silica for industry, turning straw into biodegradable packaging or films, or extracting antioxidants from bran and germ (Colombo et al., 2023; Zhang et al., 2023). These pathways not only reduce waste but also optimize the use of existing materials, open opportunities for new industries, and create additional income streams for farmers and MSMEs (Bodie et al., 2019; Martínez-Guillén et al., 2025).

Examples from other countries show how this works in practice. In Vietnam, researchers have developed biodegradable food containers from rice husk (Hoang & Tran, 2023) and biodegradable films reinforced with nanocellulose extracted from rice straw (Nguyen, Ly, Bui, & Le, 2023). In India, rice husk has been successfully used as a feedstock for biomass power generation, both in rice mills and through village-level microgrids such as those developed by Husk Power Systems (TIFAC, 2014; Singh, 2016). In China, rice bran is processed into edible oil and high-value nutraceuticals, supporting both food security and industrial innovation (Zhou, Li, & Wang, 2019). These cases illustrate that valorization is not only possible but scalable when research, enterprise, and policy align.

Table 1. Estimated Rice Wastes and Potential Uses in the Philippines
By-product	Estimated annual volume	Current issues	Potential valorized uses
Rice husks	~2.1 million tons (est. 20% of milled rice)	Often used as low-value fuel; much still discarded; disposal creates waste-management issues	Biomass energy (power/heat), silica extraction (cement, industrial chemicals), activated carbon, particle boards, biodegradable composites (Bodie et al., 2019; Goodman, 2020; Zhang et al., 2023)
Rice straw	~11 – 12 million tons annually (1.35 tons straw per ton rice grain)	Frequently burned in fields → air pollution, GHG emission	Mushroom substrate, animal feed, compost, biochar, paper, nanocellulose films, eco-packaging, bioethanol, biogas (Goodman, 2020; Martínez-Guillén et al., 2025; Zhang et al., 2023)
Rice bran	~1.5 million tons (estimated. 10% of milled rice)	Highly perishable due to lipase activity → spoilage if not stabilized; underutilized for human consumption	Edible oil (rice bran oil), nutraceuticals (oryzanol, tocotrienols), antioxidants, functional foods, livestock feed (Colombo et al., 2023; Bodie et

PhilRice: Linking Science to Enterprise

For rice to move from staple food to a driver of new industries, science must be translated into practice. This is where the Philippine Rice Research Institute (PhilRice) becomes indispensable.

PhilRice was established in 1985 through Executive Order No. 1061. It is a government-owned and controlled corporation (GOCC) attached to the Department of Agriculture. Its mandate is to develop, promote, and disseminate high-yielding and cost-reducing technologies that improve the productivity and profitability of Filipino rice farmers (Executive Order No. 1061, 1985; PhilRice, 2021).

Since its founding, PhilRice has made major contributions to rice science and farmer support. These include:

• Breeding stress-tolerant varieties that can withstand floods, droughts, pests, and saline soils (PhilRice, 2022).
• Developing mechanization and post-harvest technologies such as drum seeders, axial-flow threshers, and flatbed dryers, which directly address post-harvest losses (Dawe, Moya, & Casiwan, 2006, as cited in Barroga, 2010).
• Establishing seed quality assurance systems to strengthen the country’s seed industry and ensure farmer access to certified seeds (PhilRice, 2021).
• Creating value-added food and wellness products such as PhilRice Tapuy (rice wine), stabilized rice bran and rice bran oil for nutraceuticals and skincare, and rice bran–infused functional foods, bridging research with consumer markets (PhilRice, 2020; PhilRice, 2022).
• Promoting heirloom and specialty rices such as black rice, which highlight biodiversity, nutrition, and farmer livelihoods through niche market development (PhilRice, 2022).

A vital but often overlooked asset of PhilRice is its Genebank, managed by the Genetic Resources Division. As of 2020, the Genebank maintained 17,399 rice germplasm collections, of which 7,268 are identified accessions which include traditional landraces, modern cultivars, farmer selections, and wild relatives (PhilRice GRD, 2020). These collections are reservoirs of traits such as tolerance to drought, salinity, and pests, as well as grain quality and nutritional properties, making them essential for breeding varieties adapted to the Philippines’ increasingly volatile climate. While the International Rice Research Institute (IRRI) conserves global rice diversity through its International Rice Genebank, PhilRice safeguards the country’s own heritage and locally adapted varieties, ensuring that Filipino farmers’ seeds and genetic wealth continue to serve future generations.

PhilRice’s role in the Circular Economy project is critical because CE requires more than just technology adoption — it requires research to identify viable pathways for valorization, optimization of existing material flows, and enterprise models that can scale innovations. 

PhilRice provides the backbone of research and development—breeding improved varieties, conserving germplasm, innovating mechanization, and creating value-added products from rice and its by-products. 

Circular Economy and New Industry Creation

In the Philippines, rice waste is not an abstract concept—it is visible in the straw burned after harvest or the husks discarded beside rice mills. These practices not only waste resources but also add to pollution and lost income. A circular economy (CE) perspective asks a different question: how can every part of the rice plant—grain, husk, straw, and bran—be used productively, reducing waste and creating new industries (Ellen MacArthur Foundation, 2019; Goodman, 2020)?

The UP Institute for Small-Scale Industries (ISSI) is addressing this through a DOST PCAARRD-funded project on assessing circular economy awareness and adoption among MSMEs in the Philippine food system. The project, “Development of a Coherent Policy Framework to Incentivize the Adoption of Circular Economy Among MSMEs in the Philippine Food System” running this 2025 to 2026, examines how micro, small, and medium enterprises across the agriculture value chain can adopt CE practices—from valorizing rice by-products into energy, feed, and packaging, to integrating waste reduction into local enterprise models.

In this effort, PhilRice is a crucial partner, bringing in its expertise in genetic resources, breeding, and postharvest technologies. While PhilRice develops stress-tolerant varieties, mechanization tools, and product innovations such as rice wine and bran oil, UP ISSI provides the bridge to enterprise development, ensuring that these technologies do not remain confined to research plots but reach cooperatives, startups, and MSMEs that can bring them to market.

This partnership demonstrates how science and enterprise can come together to build industries that are not only technologically sound but also economically viable and socially inclusive. In a country where rice has always been central to culture and survival, the UP ISSI–PhilRice collaboration under the DOST-PCAARRD project marks a new chapter: one where rice becomes the foundation of circular, inclusive, and future-ready industries.

 

References

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