K-Market turns Korean ODA rice project into commercial venture in Vietnam

K-Market, the largest Korean-run supermarket chain company in Vietnam, signed a partnership with a local provincial government to purchase and distribute locally grown rice developed through official development assistance (ODA) from the Korean government.

According to the company, it signed a memorandum of understanding (MOU) with the Quang Tri provincial government on Thursday, agreeing that the retailer will purchase and distribute the rice grown by local farmers in the province as its private brand product.

Under the deal, the company will sell the rice, a Japonica rice variety, for three years through its 150 directly managed stores across Vietnam.

This marks a model case of a Korean agricultural ODA project evolving from providing aid and local agricultural infrastructure to creating a bridge toward commercialization.

The Japonica rice variety was first introduced to the farmers in Quang Tri province through an ODA effort by the Korea International Cooperation Agency (KOICA) under the Ministry of Foreign Affairs. Funded by the Korean government, the project was launched to help develop the Vietnamese agricultural industry.

K-Market said Korean agricultural ODA projects have so far been limited to the framework level, providing farming techniques, introducing new seeds or establishing production infrastructures. Such methods, the company said, have suffered shortcomings including limitations to trade routes and profits for local farmers.

The MOU, K-Market said, has advanced from a typical ODA structure for the agricultural sector by introducing a major retailer and completing the value chain connecting producers to consumers.

“Through KOICA’s ODA project in Quang Tri, the local farmers’ incomes have increased more than 60 percent from before the project. K-Market’s new partnership holds a great significance as it goes beyond a temporary aid effect to establish a foundation for self-reliance where local farmers can maintain high income," a K-Market official said.

Hoang Nam, standing vice chairman of the Quang Tri Provincial People's Committee, said: "We have high expectations that Quang Tri province's excellent organic agricultural products will be recognized through K-Market, Vietnam's top distribution chain. We will provide full legal and administrative support, along with exceptional incentives, for Korean companies expanding and investing in Quang Tri."

Yang Seok-woong, director of the KOICA Vietnam Office, said the MOU is significant because it goes beyond “simply improving the production capacity of local farming households through ODA projects, but has secured stable sales channels and a sustainable income base through cooperation with a Korean company operating locally.”