Handbook of Vanilla Science and Technology

Large ice cream brands use many times that quantity of vanilla beans each year in the United States alone. So do cola flavored carbonated soft drinks. There simply may not be enough FairTrade Certified vanilfabeans to support amajornew product introduction.And, because of the required record keeping, a significant increase in production does not happen overnight.

IV In Madagascar, there are reportedly 60,000 farmers growing vanilla beans. Most of these are located in remote locations, not easily accessible by rudimentary roads frequently impassable in the rainy season. The curing centers, by contrast, are more centralized, typically in larger towns on the northeastern coast. Harvested beans begin to deteriorate in just a few days and will be completely spoiled if the curing process is not started within a week or so.

Traditionally, farmers sold their green beans to collectors who in turn transported and sold them to the curers. The collectors literally rode into the countryside on motorbikes with cash provided by the curers. Despite being advanced cash by the curers to finance bean purchases, the collectors were largely independent and uncontrollable. How much of the cash was actually paid to the farmers and how much remained in the pockets of the collectors was known only to them.

In many respects, the farmers were at the mercy of the collector. If they rejected the price offered by the collector, their beans would spoil. As a result, the farmers typically received very little for their beans, usually $1.00 to $2.00 per kg. More recently, farmers have responded by curing or partially curing their own beans. They hoped this would give them more leverage, because now they could store the beans while waiting for a more reasonable offer. But, unfortunately, the farmers were not very adept at curing and the quality of their beans was poor, reducing their value. Even after curing, the farmers continued to receive minimal compensation for their beans.

The promise of Fair Trade is that the farmers will be paid a price that reflects the costs of sustainable production. FLO International has set the farm gate price of green vanilla beans at $5.60 per kg in Madagascar. But, can that promise be adequately enforced and/ or verified among a highly fragmented, remote farmer network? Possibly, but it would require significant cultural and structural changes in an industry that has essentially operated the same way for generations.

V In March of 1999, the Dow Jones Industrial average of 30 large cap stocks crossed 10,000 for the first time. In October 2009, the average once again moved above 10,000. The last decade has not been kind to the American investor.

The fate of the American consumer has been no better. By the fall of 2009, unemployment was just shy of 10%. Taking into account unemployed workers who had given up trying to find a new job, the actual rate was estimated to be 17%. American consumers have stopped spending. Those that are still working are trying to rebuild their retirement savings accounts. Those without jobs have little to spend or save.

How can Fair Trade Certified products, with significantly higher prices than their conventional counterparts, be expected to gain consumer acceptance in the face of such difficult economic times? One way is to educate consumers about the benefits of Fair Trade. Most consumers know very little about Fair Trade beyond the concept of paying a “fair” price to the farmer. Even fewer can identify the Fair Trade Certified label or even know that one exists.

Starbucks published an “Annual Corporate Social Responsibility Report” in 2007, addressed to “Stakeholders”, not stockholders. It goes into great detail on all aspects of sustainability, including those related to Fair trade. Unilever, the producer of Ben and Jerry’s brand Fair Trade Certified vanilla ice cream, published a similar brochure in 2008 titled “Sustainable Development - An Overview”. Among Unilever’s commitments to sustainability is the goal to source all tea for Lipton tea bags from Rainforest Alliance Certified™ farms by 2015. These are just two examples of the efforts that many major food and beverage corporations are making to educate their customers on the critical need for and benefits of a commitment to sustainability and Fair Trade.