Big buyers pledge to triple the revenues of vanilla producers
The 3,000 farmers involved will also receive extensive training to help them increase productivity and quality, as well as diversify.
Vanilla is one of the most popular flavours in the world and Madagascar represents 80% of global supply. However, volatile markets and climate change has left producers stuck in a “poverty trap”.
“They lack efficient practices and finance to grow high quality vanilla, nor can they plan ahead to sell cured vanilla,” a Firmenich spokeswoman told FoodNavigator.
This is where the Livelihoods-Vanilla project comes in. Fanamby, a Madagascan NGO, has received €2 million in funding to create a new farmer-owned cooperative to collect the vanilla, cure it and export it to the project partners.
Danone, Firmenich, Mars and Prova, which supplies Mars, will purchase the vanilla produced by the project. Around 60% of cured vanilla’s value will go back to producers, compared to the 5% to 20% many receive today.
It will also ensure the corporates secure a sustainable supply of vanilla. “In light of the recent rising vanilla prices and today’s market scarcity, it is critical for us to invest in innovative solutions if we are to continue protecting the best that nature has to offer,” said Firminech chief financial officer Eric Nicolas.
Vanilla prices have been subject to severe volatility due to a lack of cash flow pushing farmers into harvesting their crops too early, leading to poor quality. Supply shortages of quality vanilla also cause speculation.
Extreme weather events, most recently cyclone Enawo in March, can also decimate the vanilla crop and add further stress to an already fragile system (there are no bees so pollination has to be done by hand, flower by flower, every day).
The project will also tackle food security, with a special focus on rice production as well as other crop diversifications to help producers spread their risks. The project could see a total of 6,000 hectares of land converted to sustainable farming practices.
Mars said it hoped to “reapply learnings from this work to other parts of our supply chain to increase the scale of positive impact from these projects”.
The new project is part of the Livelihoods Fund for Family Farming, a €120 million impact investment fund created by Danone, Mars, Firmenich and Veolia in 2015.