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Project to improve vanilla quality in Madagascar

Mars and Danone are funding a new project to help smallholder farmers improve the quality of vanilla in Madagascar.

The Livelihoods Fund for Family Farming, which is also being supported by Firmenich and Veolia, aims to triple farmers’ revenues and provide companies with quality and fully traceable vanilla over a 10-year span.

This project, with 3,000 family farms, aims to tackle quality and traceable vanilla production as well as food security for farmers and biodiversity conservation. Fanamby, a Madagascan NGO with extensive experience working with vanilla producers, will implement the project.

Some 80% of global vanilla production is concentrated in a small area in northern Madagascar, one of the poorest countries in the world. Vanilla farmers are in a poverty trap – they lack efficient practices and finance to grow high quality vanilla, nor can they plan ahead to sell cured vanilla. As a result, the farmers get a low price for poor quality vanilla, reinforcing the poverty cycle. On the other hand, vanilla prices have been subject to severe volatility due to a lack of cash flow pushing farmers into harvesting their vanilla too early, leading to poor quality in the market.

Victoria Mars, board member of Mars, says, “Our engagement with the Livelihoods Fund is one of the ways we are partnering with and learning from others to improve the sustainability practices used to grow our raw materials, and to make sure that the farmers that grow these crops are treated fairly and have an opportunity to thrive.

“We’re pleased to be working alongside Danone, Firmenich and Prova to make a long-term investment that aims to increase the quality of the vanilla crops, improve the farmers’ revenues, and positively impact the local environment. Our objective is to also reapply learnings from this work to other parts of our supply chain to increase the scale of positive impact from these projects.” 

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.

Danone, Firmenich and Mars purchase significant volumes of vanilla for their own products and brands. They have joined forces with Prova, a supplier to Mars, and will purchase vanilla produced by the project. 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.

The project is located outside the Sava region where vanilla production is currently concentrated. The area has been selected as it offers lots of potential for vanilla production. The programme aims to train farmers 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, will seek to connect producers more directly to markets, and will collect the vanilla, cure it and export it to the project partners. Through this work, it’s estimated that around 60% of cured vanilla’s value will go back to farmers (instead of 5% to 20% today).

New projects will be launched in the coming months by the Livelihoods Funds that link farmers’ empowerment, environmental conservation and sustainable sourcing for companies.

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