Handbook of Vanilla Science and Technology

In early 2008, reports began to circulate of extensive vine disease in Madagascar caused by the fungal pathogen Fusarium. Met with skepticism at first, the reports still caused a shiver of concern throughout the industry. Fusarium is a fungus found in the soil all over the world. Historically, it has devastated many other crops including tomato, potato, pepper, and eggplant. Prior outbreaks of Fusarium in vanilla in India, China, and Indonesia resulted in virtually the entire crop being infected and destroyed.

Fusarium is an opportunist organism. Healthy plants can often coexist with it. Favorable weather in 2008 seemed to keep the outbreak at bay. But, in the summer of 2009, the vines were vulnerable due to the stress of having just produced a bumper crop. Numerous crop surveys indicated that a growing percentage of the vines were infected. There is very little that can be done once a plant is infected, other than to rip it out to try to prevent further spread of the disease.

In less than 4 years, worldwide demand for vanilla beans had essentially recovered to the pre-crisis level. In the fall of 2009, extremely light flowering in Madagascar was observed. Other producing countries, most notably India, Indonesia, and Papua New Guinea were reporting significant declines in production. Many farmers have once again become discouraged by low bean prices and abandoned vanilla. An alarming percentage of vines in those countries have been removed and replaced with other crops, such rice, corn, and cloves.

Today, in 2009, vanilla bean exporters and dealers are still holding large inventories of beans from the 2008 crop. And, a bumper Madagascar crop estimated to be 2,000 metric tons is being cured. So, even with the trend towards declining production and the bigger threat posed by Fusarium, there is likely to be a surplus of beans, at least until 2011. But eventually, the boom bust cycle is almost certain to reoccur.

7.4 FAIR TRADE - BACKGROUND

In 2005, vanilla was added to the portfolio of Fair Trade Certified™ products. This may have been a development that could change the vanilla landscape forever. Fair Trade Certified Vanilla has the potential to eliminate the boom and bust cycles currently threatening the future of the vanilla industry itself.

Fair Trade initiatives began shortly after WWII, typically marketing artisan crafts from impoverished peoples in third world countries. The most common outlets for these products were World Shops, familiar to travelers in many airports around the world. The Fair Trade movement expanded in the 1960s, as dozens of Alternative Trading Organizations (ATOs) were established in Europe and North America. During this period, religious, student, and various other groups embraced an anti-establishment sentiment. Fair Trade became a symbol of the exploitation and repression of the people, which needed to be changed.

The Fair Trade movement remained somewhat of an afterthought until three watershed events transformed it into a mainstream social engine for change. In the 1960s and 1970s, Fair Trade expanded its portfolio from simple artisan crafts to agricultural products. This exponentially increased the potential market size. Now, products that consumers around the world used on a daily basis became available with Fair Trade certification. These included coffee, tea, cocoa, rice, and bananas. Today, the Fair Trade portfolio has added flowers, wine, and even clothing, in addition to vanilla.

Even with the addition of agricultural products, for a long time the growth of Fair Trade was limited by its boutique-like distribution. In the late 1980s, an ATO in the Netherlands created the concept of a Fair Trade label. This label, awarded under the supervision of an independent organization, would allow Fair Trade products to be distributed through mainstream distribution channels, while still carrying the assurances of compliance with Fair Trade principles.

During the ensuing decade, Fair Trade grew exponentially, with coffee production being the most prominent example. The final watershed event for Fair Trade occurred in 1997, when Fair Trade Labeling Organizations (FLO) International was created. This organization ensured that inspection and certification of Fair Trade products were standardized throughout the world. This provided consistency and credibility to products carrying the Fair Trade label. In the United States, Transfair USA is the official FLO International representative.

7.5 FAIR TRADE PRINCIPLES

The principles of Fair Trade are somewhat complex and far-reaching. However, the cornerstone is enabling small, disadvantaged producers the ability to compete in the global market place, and receive a fair price for the goods and services they produce. A fair price reflects the true costs of sustainable production and a standard of living, which meets acceptable social and ethical norms.