In the north-east of Madagascar, the transition to a vanilla industry which couples high-quality beans and improved farmer income is well on its way. Livelihoods’ project launched 5 years ago is recording encouraging results when it comes to improved farmer income, the structuring of a transparent supply chain, the involvement of women and the youth. The project relies on the commitment from a coalition of private and public actors who have joined forces to positively transform an economically fragile industry. The Livelihoods’ Fund for Family Farming (L3F) has brought together Danone, Mars (through its supplier, Prova), Firmenich, the French Development Agency (AFD) and local Fanamby NGO, among other NGO partners in the project, to embark 3,000 smallholder farmers and their families on a decade-long transformation.
What is our partners’ point of view regarding the project’s achievements so far? What are the key learnings, the challenges encountered and positive signals for the future? In this interview, the floor is to Eric Nicolas, Chief Operating Officer at Firmenich.
Livelihoods Venture: Eric Nicolas, Firmenich is highly involved in this vanilla transformation project since its launch in 2015. How do you position the initiative in the Group’s Sustainable sourcing strategy?
“Our core business challenge is to source high quality and sustainable vanilla, to answer a growing demand from our customers and ultimately the consumers. Livelihoods’ project is part of Firmenich’s sourcing strategy to ensure a long-term and stable supply of vanilla beans: this is embodied in our 10-year commitment to support a large community of smallholder farmers.
With this Livelihoods’ project we are clearly in a highly qualitative and sustainable approach. Here we have a perfect example of a resilient and transparent supply chain, with great added value generated for all the stakeholders. The project’s model guarantees a fair price for smallholder farmers, increased traceability, and transparency for end consumers. It is particularly important, because in the case of large-scale vanilla collectors, it is very complex to ensure that the income generated by vanilla directly goes back to the farmers and their families. We could say that this Livelihoods’ project is a ‘peaceful haven’ in a very complex industry which has suffered from corruption.”
LV: 5 years later, what are the main goals achieved for Firmenich in the project?
“We work actively to contribute to improve the living conditions of more than 2,500 smallholder farmers and their families to date, with a goal to reach 3,000 before 2027. Together with the project partners, we bring them technical skills and awareness on sustainable agricultural practices. One of the main achievements to date, is the structuring of a cooperative, called Tambatra, which was founded and is managed by the farmers themselves. Today, Tambatra brings together 20 farmer associations, which has helped the farmers significantly improve their working conditions.
Overall, we have managed to improve the livelihoods of more than 10,000 people, men and women farmers but also young farmers. The project has provided them with trainings and has improved the integration of women into vanilla production and decision making. The opening of a farm school within the project area is a great source of collective pride and a victory for the next generations. On an environmental level, we have managed to shift to more sustainable agricultural practices that include soil health, among other practices, to ensure a resilient vanilla cultivation and preserve a unique natural ecosystem. Through the project activities we will also support the farmers to diversify their sources of income such as poultry breeding, rice or cloves production”.
LV: What have been the main difficulties encountered?
“There is a delicate economic topic, which is very specific to the vanilla sector: farmers are highly dependent on the vanilla price fluctuations. When the market prices are high, farmers are motivated to produce vanilla. But when prices are dropping, they are tempted to cultivate other crops. Diversifying the production and thus source of income is necessary but complex. Farmer trainings and the farming school have a key role to play to better equip them on farm diversification.
Another challenge is of course farmer poverty which can lead to supply disruptions for high quality vanilla. Sometimes, when they lack cash-flow, farmers are pushed to harvest vanilla too early before the beans reach their full maturity. This impacts the quality of vanilla, generally leads to a poor harvest and in turn lower income. Farmers are further fragilized by the price of vanilla which has been highly volatile in recent years, due to strong speculation and massive “thefts” in their own plots.
The sector in Madagascar is also fragile due to extreme weather events such as cyclones which can seriously jeopardize the crops. For example, Enawo cyclone which hit the island in 2017. The paradox of Madagascar is that many crops can grow thanks to a ecosystems rich in biodiversity. Yet, farmers are locked in a poverty trap.”
LV: What are the main learnings from the project that could benefit sourcing transformation initiatives with rural communities in other geographies?
“It is not simple to answer this question because each ecosystem and biomass has its own characteristics. But for instance, we have implemented a micro-farmer approach with smallholders, where we focus closely on farm management and how we can promote farm diversification and farmer income. This is a very interesting model to replicate. We have achieved production of vanilla with strong skills and a real know-how. This approach is quite holistic, as we promote and implement sustainable agricultural practices for the benefit of surrounding natural ecosystems with strong agronomic expertise. This is a key lesson learned and a technical model to replicate in other geographies.
On the social dimension, we managed to embark and involve women in the vanilla production and farm organisations management. Women have a strong sustainable, entrepreneurial vision and a reasonable approach to resources management, that can only better address their household’s needs.
Traceability is of course a key learning. For the years to come, traceability in the supply chains will be even more important to better answer the growing demand from consumers, ensure a fair price and access to market to the ones who work hard and daily on the ground: the farmers”.