Tuesday, April 19, 2005

Options For Vanilla Growers

Any farmer who has grown "luxury" crops (non-subsistance plants) for more than a few years, knows that supply and demand are the primary factors that drive the market. Several years ago coffee was the big luxury crop. Demand was high and wholesale prices were good. From the perspective of most seasoned coffee farmers, it made sense to produce their normal crop, maybe even increase production. Farmers new to growing luxury crops enthusiastically tore up their food plots on prime land and planted coffee bushes, certain that they would earn enough cash to get ahead.

While the seasoned farmers were careful and the new farmers took a huge risk, neither group had any way of knowing what was happening in other tropical countries. Well-meaning USAID and other government sponsored groups encouraged struggling farmers everywhere to plant coffee as it would be the ticket to their becoming self-sufficient. In fact, suddenly the market was inundated with coffee beans. Further, the cost of living in Vietnam, a country new to the coffee industry, was much lower than Central America where coffee had been grown for generations. Vietnam could afford to sell cheaply, and inadvertently undercut Central American farmers. Farmers who tore up their food crops in favor of coffee were faced with potential starvation. Who benefitted? The large companies who bought the cheap coffee and maintained a larger margin of profit than usual, well aware that people in industrialized countries weren't going to forego their coffee and were willing to pay a good price for it.

When vanilla prices skyrockted, the same pattern occurred. For some coffee farmers, this was an opportunity to recoup from their losses. And even as the prices have now collapsed, farmers contact me all the time to find out how to grow vanilla. Why? Partially because information is slow to reach people who live in the "bush" and haven't access to computers or market information. And partially because cost of living is low enough that it's worth it to take the chance. Unfortunately, it usually isn't in the grower's best interests.

So what should farmers do? First, always keep food crops on prime land so the family eats no matter what. If available land is limited, creating collectives where farmers work together to produce several crops and share in the profits makes sense. This is especially good for getting organic certification or Fair Trade status. Certification isn't cheap, but if costs are shared by several farmers, all benefit as organic crops command a higher price.

Creative planting of luxury crops is another option. An example of this can be seen in the Gulf Coast of Mexico. Central Veracruz has hundreds of hectares in citrus and, at one time, this region produced much of the US citrus crop. Then Brazil planted oranges that were cheaper than Mexican oranges, and Florida's citrus grows near the processing plants, so Mexico was largely cut out of the American citrus market. A few smart farmers started planting vanilla in their orange groves. The trees are excellent tutors, pollination and harvest times don't interfere with one another, and two crops are produced in the same space as one.

One final option is to look for low-interest government or international loans for starting value-added products from crops. In the case of vanilla, create extract for markets in nearby countries or for in-country use. Package vanilla beans and extracts for the tourist market. Start an ice cream factory or bakery in your area where vanilla can be used. Study recipes on my site or in my books and open a cafe in a tourist region featuring local foods flavored with vanilla. Resourcefulness is the key to survival. Work as a team so that everyone benefits. I realize these aren't magic solutions that will completely solve the problems farmers face when prices collapse, but hopefully it will provide "food for thought."

If you have thoughts or ideas to share on this topic, please do e-mail us; we'll be happy to post good suggestions.


Anonymous said...

You're Robbing The People BLIND! Your vanilla bean prices are WAAAYYYYYY TOOO HIGH and you SHOULD BE ASHAMED! You are no better than BIG PHARMA!

OrchidsAsia said...

Unfortunately what happened in 2008, because of the falling of vanilla prices, is that a lot of farmers did quit or went to grow other products.

Also played important part, when a lot of new farms appearred around the same time, most importers just did buy full stock of vanilla for the years following.

This did resulted, that per 2011, there was shortage of vanilla farmers and in 2012-2013 demand did start to rise, because old stocks were finished.

Also plays part, that the global warming has effect on vanilla harvest and gives smaller and less beans.

So at the moment, there is much more demand than possible to deliver.

Problem is, that people are hesitating to start new farms, because of fear again another fall in price of vanilla will come.

that is very regrettable. Vanilla will keep rising the next few years and it is even espected, that over 3-4 years, it will reach it old top of $400-$500 a kg.

None the less, w and our concurrents had no more orders than total of 15 farms worldwide to put up, in comparnce with 100 farms worldwide in 1 year in 2006-2007.

To be able to keep the vanilla trade alive, we need more farmers.
Our company does arrange to put up farms and nowadays it is much more modernized and possible for cheaper to put up vanilla farms worldwide, both in tropical areas as under glass greenhouse.

If you are interested to start vnillafarming anywhere, take a look at our website: www.vivariaeden.weebly.com
and take contact with me by mail or phone. We would love to give advice and assist you.

We arrange plants, educate people in pollinating, harvesting and processing of vanilla and nowadays we are able to give quicker results.

Hope to hear from someone.

Patrick Persijn, OrchidsAsia & OrchidsAsia Europe