Extremely low prices for an expensive product

Vanilla is one of the most expensive spices on earth. Still, many of the people growing it live on less than US$1 a day and suffer extreme income insecurity.

Although vanilla is one of the most expensive spices in the world, the majority of the 80,000 smallholder farmers who produce vanilla in Madagascar experience food insecurity. This is caused by the fact they do not earn sufficient income to adequately provide food for themselves and their families throughout the year.

Much of the profits in the vanilla industry are distributed unevenly. The players at the top of the chain (e.g. companies and flavour houses) influence the prices and demand, and can therefore be seen as powerful stakeholders. Because of fluctuating prices of vanilla and the uneven profit distribution, farmers cannot predict how much money they will earn from their vanilla sales each year, leaving them in a vulnerable position. (Read our report Bittersweet Vanilla, on the issues in the vanilla industry.)

About 75% of the farmers in Madagascar’s Sava region – including 60,000 smallholder vanilla farmers – live on less than US$1 a day and suffer extreme income insecurity.

Our work

The companies that source from the Malagasy vanilla farmers can and should help them to break out of the cycle of poverty by ensuring that they receive a fair price for their vanilla.

Earning a fair price will give farmers an opportunity to break out of the poverty cycle and take better care of their families, invest in insurance to recover from unexpected externalities, invest in new crops, and have savings to fall back on.

Fairfood works on having solid methodologies in place for assessing a fair price. Furthermore, we engage with key multinational brands and flavor houses sourcing vanilla from Madagascar to increase their awareness on the issues farmers face, and to ensure that they make commitments to policy and practice changes that ensure Malagasy vanilla farmers receive a fair price for their valuable product.