Vanilla Is The 2nd Most Expensive Spice. So Why Do Madagascar's Farmers Live In Poverty?

vanilla is the world's second most expensive spice [Music] is in the east African island of Madagascar produces roughly 80 percent of the global ply here Farmers have to pollinate 40 million orchids that only bloomed for one day a year foreign [Music] only then will a vanilla bean or pod grow inside are the seeds and oils used in popular desserts but Madagascar is still one of the poorest countries in the world [Music] volatility of the vanilla prices this bust and boom creates such a toxic environment there farmers can earn more when the price of vanilla is high but rampant inflation often follows and the big bucks attract thieves Who attack farmers and steal crops today Farmers arm themselves to defend their vanilla um farmers can plunge into extreme poverty when prices are low the government has tried to stabilize the price but it's backfired and now global customers are turning to other countries for cheaper vanilla as locals fight to protect Madagascar's green gold they worry how much more they the land and this crop can take foreign [Music] grew up on a vanilla farm and seven years ago he bought this hectare of land for himself vanilla is an orchid that grows on a vine knee foreign [Music] and it grows best in this rainforest environment where there's plenty of rain and sunlight but vanilla isn't native to Madagascar it's actually from 10 000 miles away in Central and South America indigenous groups like The totonox and later the Aztecs cultivated native vanilla for centuries thanks to this insect Orchid bees are needed to pollinate the vanilla's flower allowing a fruit or that pod to grow after Hernan Cortes conquered the Aztecs he brought vanilla back to Spain in the 1520s it became popular across Europe in desserts like ice cream creme brulee and sweet meats which Queen Elizabeth the first loved except the Spanish still controlled the trade so hoping to get in on the market other European countries tried cultivating vanilla on their own but they didn't have that beat so their vanilla Vines wouldn't produce any fruit then in 1841 on the french-controlled island of reunion a 12 year old boy figured out an answer Edmund albius discovered that the Orchid could pollinate itself if he moved aside the membrane separating the male and female parts albius Was Born Into Slavery but even after he was freed in 1848 he never made money off his Discovery and died in poverty 32 years later France took albius's work and started growing vanilla on the French ruled Island right next door Madagascar it thrived here because the growing conditions were perfect today in towns like brazophene salamas almost everyone works in the vanilla industry and they still hand pollinate every Orchid just like albius did nearly 200 years ago each flower plumes for just one day a year rahato meaty hushima Mafia flaring Salama works alone and can pollinate up to 500 orchids a day it takes about nine months for a pod to grow the price of this vanilla bean has skyrocketed in recent years due to Rising demand and the destruction of crops by Cyclones in 2018 vanilla hit a high of nearly 600 dollars per kilo more than the value of silver it's since dropped to 250 a kilo but that's still a lot and those prices are really attractive to thieves [Music] so many farmers in the region are arming themselves patrolling their fields at night when thieves usually strike thieves stole 20 kilograms of farmer Berlin ronery's Harvest leaving his vines bare foreign [Music] officials estimated 10 of the year's Harvest was lost to theft [Music] foreign he often sleeps out here overnight and because farmers only get one vanilla Harvest annually foreign [Music] some of the thieves are actually children driven to steal because of poverty they were held in overcrowded and unhygienic prisons in the northeast of the country for years without trial [Music] Farmers have started branding their vanilla beans with identifying codes making the crops easier to track if they do get stolen another protective measure some Farmers pick their beans before they're completely ripe to beat thieves to harvest and so the quality goes down a lot this year Raza finsalama was able to wait until his beans were completely mature Farmers have to move quickly because the pods start fermenting immediately once they're picked they pack the vanilla pods in 40 pound bags and haul the loads for Miles along dirt roads to the market foreign [Music] [Applause] middlemen called commissioner bought these beans in their raw Green State and they held a lot of negotiating power over the farmers since the beans boiled quickly the middlemen are definitely making a lot more money they can kind of tell people whatever price they want so some years farmers walk away happy in other years they can barely make ends meet I have heard Farmers say things like you have to have courage to plant vanilla because it may not be worth it at the end you may not get anything nowadays razzafin Salama sells his pods directly to a Cooperative called sahana Representatives check the bean quality and the brand on the bean and pay the farmers directly in cash cutting out the middleman and promising a consistent price today rosafin Salama earns about 17 for a kilo of raw green vanilla sahanala takes the beans to one of its processing facilities employing thousands of workers across Madagascar but even these large operations still have to protect against thieves the facility has electric fences surveillance cameras and private security patrolling at night [Music] another three months of painstaking work before the vanilla is export ready [Music] first workers have to sort the beans by quality and size next they wash each Bean to remove any impurities then the beans get dunked in hot water to release the compound vanillin that's what creates the distinct vanilla flavor foreign [Music] the beans need less than a minute depending on how ripe they are finished [Music] [Music] they have to run the bean baskets so they don't lose the heat from cooking workers move the cooked beans to boxes where they'll sit for 48 hours when they take the beans out they'll be Brown [Music] [Music] um [Music] there the beans will stay for 15 to 30 days depending on the moisture inside not a lot um [Music] foreign [Music] in the packaging room they massage the beans to release the oils and the vanilla fragrance careful not to damage the beans they group The pods in bunches then they check that there are no stray metals like nails hidden inside [Music] workers then weigh the boxes [Music] package them for shipping is vanilla beans end up with american-based food processor Archer Daniels Midland universe exporters like sahanala earn the biggest bucks this Cooperative has a turnover of 40 million dollars annually that's because cured beans are worth a lot more today sahanala earns 250 dollars per kilo for its cured vanilla a 1300 increase from what farmer razzafin Salama made selling his raw beans the bigger problem is that the volatility of the price [Music] control in those low price years Farmers live in extreme poverty like 81 percent of the country many earn just two dollars a day so many farmers grow other crops like vegetables and peanuts to supplement their incomes foreign during years of high prices farmers middlemen and exporters would make more but this also dries up inflation making everything more expensive in the ideal World vanilla would consistently get a good price to balance out the ever-changing price in 2020 Madagascar's government introduced a minimum base price today it's set at 250 a kilo for the exporter they want to protect against this crazy up and down right but it hasn't gone to plan unfortunately it appears that most people are not going along with paying that minimum price global companies are turning to other countries that sell at cheaper prices or they're buying synthetic vanilla a lot of this depends so much on the government of Madagascar and whether they will change tactics and go back to allowing their price to more accurately reflect the global price farmers are betting on cooperatives like sahanala to alleviate the need the government can't fill sahanala can guarantee that its Farmers make 17 a kilo at least twenty six hundred dollars a year [Music] but as they face theft an unreliable government and shifting demand farmers at the center of the industry are unsure of what's next demand for vanilla is continuously increasing and so if Madagascar could find some stability and if these Farmers could find some stability that there's no reason for the Outlook to not be really really good for vanilla in Madagascar but no it's hard to say what the future brings thank you

Channel: Business Insider

Views: 4,449,233

Keywords: Business Insider, Business News, vanilla, expensive, spice, madagascar, farmer, farmers

Id: _VQ-ckQPD2I

Length: 16min 54sec (1014 seconds)

Published: Sun Dec 11 2022