Vanilla Beans: The Cost of Production

Vanilla is one of the most volatile spices on the global market, and as prices fluctuate between extremes, growers come under increasing pressure. Discover how this valuable crop can attract organised criminal gangs while producers still get paid a fraction of Vanilla's worth.

As a spice, vanilla comes second only to saffron for how much it costs—a kilogram of these featherlight pods can run up to hundreds of Euros. Meanwhile, the demand for real vanilla beans is increasing as more consumers push food companies to use “natural ingredients” in their products. 

On the whole, natural vanilla bean extract makes up only 1% of the vanilla flavour on the global market, with most vanilla flavouring coming from synthetically produced vanillin. Some 1,700 to 1,800 tonnes of demand for natural vanilla is projected for 2020. Around 65% of that will come from the Northeastern region of Madagascar, where the rise and fall of vanilla’s price takes a toll on the fates and fortunes of the local community.^1,12

Illustration by Paulina Cerna Fraga

Vanilla Bean Farming’s Human Toll

Natural vanilla passes through dozens of human hands as it goes from farm to your kitchen table. No part of farming or curing the vanilla beans is mechanised, and small farms are the very backbone of natural vanilla production.² Agriculture is Madagascar’s largest sector thanks in large part to vanilla, but ask a Malagasy local if they use vanilla in their own cooking, and the answer is almost certain to be a “no”. 

Vanilla, for them, is something that foreigners consume - a crop grown entirely for profit - and yet farmers receive only the smallest cut of the profits for their months of back-breaking effort. While it is undoubtedly true that many farmers’ lives have been improved by producing vanilla, Madagascar remains one of the poorest countries in the world, with close to 75% of its population living on less than €1,60 per day. Comparatively, a Malagasy vanilla farmer would require an estimated living income of €3,75 per person per day to be able to afford all essential needs such as food, water, housing, clothing, education, transportation, and healthcare.^{3, 13}

In the hierarchy of Madagascar’s vanilla bean industry, farmers sit on the very last rung. To produce just 1kg of vanilla beans, they must grow 600 orchid blossoms; yet in 2018, these farmers received €38,20 for every kilogram of vanilla they grew—which is only around 5% of the export price for natural vanilla that year (US$875 or ~€736 per kg).¹⁴ Despite this disproportionate payoff, vanilla is still a money-making crop for smallholder farmers, and most of their time and effort is put into vanilla, whereas other crops such as cassava, bananas, and rice are grown to be consumed, not sold.¹⁷

Moreover, small growers have little power to negotiate the price of their vanilla harvest. Freshly plucked vanilla beans begin fermenting immediately and must be sold off quickly to “commissionaires” or middlemen before they go bad. The real profit from natural vanilla is made at upper levels when beans are sold to curing facilities and traders that export vanilla to the suppliers who sell the spice around the world.⁴

Vanilla Bean-Related Crimes On The Rise

Vanilla orchids only bloom once a year for a matter of hours, so farmers invest all their effort into just one crop and one payoff each year. In some cases, young children will have to miss out on school to help with the demanding work of hand-pollinating and harvesting. Unfortunately, as vanilla has become more lucrative, it has led to a rise in vanilla-related theft and crime. 

Farmers have reportedly been killed or attacked for their coveted beans, and some choose to pick their vanilla beans prematurely rather than lose them to thievery, although this results in inferior beans with poor flavour.⁵ Because the local community in Madagascar has little faith in what they see as a corrupt police force and justice system,  some people prefer to take matters into their own hands.⁶ 

Some communities organise armed militia to patrol the vicinity of villages and apprehend would-be thieves. Anyone suspected of stealing vanilla is treated harshly, and instances of mob justice are becoming more frequent in these vanilla-growing communities. Locals speak of “vanilla murders”, where thieves and gang members are rounded up and beaten or killed by machete-wielding groups - all in the name of protecting the community’s livelihood.⁷ 

Keeping The Vanilla Bean Industry Alive

Madagascar is hardly the only place where vanilla is grown, but the beans from this region bear a signature flavour that makes this so-called “Bourbon vanilla” the most desirable of its kind. At present, the island state is facing crises on multiple fronts: rising violent crimes, forest destruction, and money laundering - all directly impact the supply of vanilla now and in the future.⁸

On the other hand, vanilla farmers in Madagascar are among the most vulnerable to increasingly frequent extreme weather events under a changing climate. While tropical cyclones are currently seasonal from November to May, climate models predict that these cyclones will likely become stronger and more intense in future, which will be devastating to growers in the region.¹⁵ Previous weather events like Cyclone Enawo in 2017 caused damage to 90% of the crops in the prominent vanilla growing regions of Antalaha and Sambava. That year, most farmers lost their main income, and the global price of vanilla pods hit record highs due to the shortage.⁹

All this uncertainty drives the price of natural vanilla like a rollercoaster ride—going from lows of €8 for every kilogram to highs of €700. Without intervention, the supply and quality of Madagascar’s vanilla pods will deteriorate, as well as the lives of its rural farmers. International food companies have realised this, and there are now several initiatives in the region that aim to improve the lives of growers while ensuring the future supply of natural vanilla. 

Through such programmes, farmers receive training in sustainable farming techniques like crop rotation and, in exchange, are promised fairer wages if they commit to selling directly to the spice producer instead of middlemen who take a price cut.¹⁰ Having formal contracts like these between vanilla buyers and farmers is important because it builds trust and gives growers a sense of security so that they don’t end up picking their vanilla beans too early just to make a sale during a lean season.¹⁶

Our Responsibility As Consumers

As consumers, there isn’t much we can do on a personal level to improve the lives of the vanilla bean farmers in Madagascar, aside from supporting fair-trade spice producers. While the jump in global demand for natural vanilla has meant that vanilla farmers sometimes earn larger incomes, it has also come at the cost of personal and financial safety for many of them. Their reliance on this one lucrative crop is under threat because, like other under-served communities around the world, farmers in Madagascar are disproportionately affected by human-driven climate change.

There will always be a market for natural vanilla. Still, because this supply is likely to be limited by geography, climate, and finicky plants - the average consumer can also look to other synthetically-produced vanilla alternatives for their cooking needs. In the majority of cases, only true connoisseurs can taste the full complexity of natural vanilla, and the flavour compounds from the bean are cooked out of food anyway.¹¹

So if you’re just baking a batch of cookies, maybe save your vanilla beans and use some synthetic vanilla extract instead—odds are, you won’t even taste a difference.