Handbook of Vanilla Science and Technology

When the crash finally came, it came with a vengeance. Vanilla bean prices dropped from over $500 per kg to $50 in 12 months. Even another Category 5 cyclone during this period only resulted in a brief pause in the downward spiral.

7.2 THE FARMER

No one suffered more from the vanilla crisis than the farmers in Madagascar who grow the beans. Clearly there were windfall profits, but very few found their way back to the growers. New curing facilities and warehouses were built by the vanilla bean processors. They built offices for their managers and guest rooms for visiting bean buyers. Vanilla bean collectors traded in their motorcycles for SUVs. Some built luxurious homes near the coast and even air-conditioned hotels. A major highway was constructed connecting Anatalaha at the southern end of the vanilla bean growing region to Sambava to the north. By contrast, the farmers’ lifestyle and average family income of $1.00 per day was virtually unchanged.

Vanilla cultivation is extremely labor intensive. Vines are started from cuttings, which are gently tied to support trees. During the 3 years before the first flowering, the support trees must be regularly pruned to provide the correct amount of sunlight for the beans. Regular mulching at the base of the vines is required to provide the proper drainage and nutrients. The vines themselves must be trained to grow in loops so that the flowers and beans will be within the farmer’s reach. Vanilla has no efficient natural pollinator, so each flower has to be pollinated by hand in order to produce a bean. The beans remain on the vines for 10 months during which time, in addition to the mulching, pruning and looping that are required, the beans must also be protected from thieves. Finally, when the beans are ready for harvest, they are picked individually, by hand, at the moment of optimal maturation.

Traditionally, vanilla bean collectors traveled into the remote villages where beans are grown, to purchase beans from growers and transport them back to the curing facilities. The farmers were in a very weak position when it came to negotiating with the collectors, for several reasons. Most importantly, green beans must begin the curing process within a week or so of harvest or they will quickly deteriorate and become worthless. If a farmer rejected the collector’s offer, he risked losing everything. Secondly, the farmers seldom had the alternative of transporting the beans to the processor on their own. In some cases this would involve a journey of 50 km on dirt roads barely passable under the best of conditions. And the farmers did not own motorcycles, much less SUVs. Lastly, communications in remote regions where vanilla is grown was largely nonexistent. Farmers in one village had little knowledge of what farmers in other areas were being paid for their beans. Often they had to rely on the collectors themselves for market information.

Fig. 7.2 2009 Vanilla bean production by country of origin. Source: Virginia Dare Extract Company, Inc. (For a color version, see Plate 7.2 in the Color Plate Section.)

Plate 7.2 2009 Vanilla bean production by country of origin. Source: Virginia Dare Extract Company, Inc.

Since the beginning of the crisis, the farmer’s leverage has increased marginally. The introduction of cell phones increased access to market information and the going price for vanilla beans. Improved roads enabled some to transport beans to processing facilities on their own, bypassing the collectors. Perhaps more significantly, more and more farmers began the curing process on their own. This adds value and provides the farmers with more flexibility for selling the beans on their own terms.

But the vanilla crisis left the farmers disadvantaged in other ways. Before, prices were low but at least they had an outlet for the beans as demand continually rose. After the crisis, they were left with low prices, and low demand. Furthermore, there was now competition from new origins such as Uganda, India, and Papua New Guinea (PNG) (Figure 7.2, also see Color Plate Section). At the conclusion of the crisis, PNG was producing more than 20% of the world’s requirement for vanilla beans. Self curing, which seemed to tip the scale in the farmers’ favor, often backfired as well. Without the expertise to cure properly, beans partially cured by the farmers often had off notes and were rejected by processors, leaving the farmers worse off than before.

7.3 FAST FORWARD

During the crisis, many new vines were planted in both traditional and new origins. By 2004, the average worldwide crop was approximately 2,000 metric tons, while consumption had fallen to a little more than 1,000 tons. Prices crashed in 2004 and have continued to drift lower ever since.