The Livelihoods Fund for Family Farming, together with Danone and other partners, has launched an initiative with smallholder farmers to restore vanilla quality while increasing farmers’ food security and preserving Madagascar’s unique landscape. The project aims to triple farmers’ revenues and provide companies with quality and fully traceable vanilla over a 10-year span. Fanamby, a Madagascan NGO with extensive experience working with vanilla producers, is implementing the project in the field and will monitor it.
Why it matters
The vanilla sector is undergoing a chronic crisis with volatile prices leading to poor quality and widespread poverty for the farmers. Over the last ten years, vanilla prices have been multiplied by around 20 — making it the world’s second most expensive spice after saffron — while volumes and quality are at their lowest levels since 2003. Although, 80% of global vanilla production comes from Madagascar, farmers are in a poverty trap as they don’t have the knowledge or finance to grow high yielding, high quality vanilla, nor can they earn additional value by becoming forward integrated into the preparation of cured vanilla. As a result, they get a low price for poor quality vanilla, which amplifies the hunger gap and drives early harvesting, a main cause of poor quality and so it starts all over again. In this context, companies face supply shortages, low quality and high prices.
How it works
The project is located outside the Sava region where vanilla production is currently concentrated. The area has been selected as it offers great potential for vanilla production (there used to be vanilla production in the past), social development and biodiversity conservation. It aims to train farmers for over five years on sustainable practices to increase vanilla productivity and quality through agroforestry techniques. A newly created farmer-owned cooperative, structured with Fanamby’s support, seeks to connect producers more directly to markets, and collects the vanilla, cures it and exports it to the project partners. The project also tackles food security and seeks to protect a unique tropical forest by offering alternative economic opportunities, like clove production and poultry farming, to preserve it from illegal logging and slash-and-burn practices.
How it creates value
Thanks to the farmer-owned cooperative, it is estimated that around 60% of cured vanilla’s value will go back to farmers — instead of 5% to 20% today. As a result, a significant production of pre-crisis quality and traceable vanilla is expected over the ten-year span of the project. Farmers’ empowerment, a transparent value chain from field to market and secured sales for farmers will limit speculative behaviors as both farmers and buyers will have long-term visibility.
To increase food security, the project will focus on rice production and crop diversification for a more balanced daily food intake for farmers. With agroforestry techniques for vanilla and efficient food production, the project aims to convert 6,000 ha to sustainable farming practices. Furthermore, specific programmes will be implemented to foster gender equality, namely by giving women access to land through women groups.
All partners in the Livelihoods-Vanilla project have committed to the project over a ten-year span. The Livelihoods Fund for Family Farming bears the upfront financial risk by providing €2 million to Fanamby and farmers for implementing the project and monitoring related to sustainable vanilla production. The Livelihoods Fund will be gradually refunded through a result-based fee paid by the four companies which buy the vanilla and benefit from the project.