By Bernard Giraud,
President & Cofounder of Livelihoods Venture
By the end of May, senior executives from large companies went together on a several-day field-trip in Madagascar to see how the Livelihoods – Vanilla Project has engaged the transformation of the relations between small producers and industrial users.
Why? What motivates them? Does it signal a deeper change? Could this project become an example of new sustainable sourcing practices, which amply remain to be built?
When two years ago, the Livelihoods Fund for Family Farming was requested to work on a sustainable vanilla chain, we really had the feeling we had to climb up the North face of Mount Everest: a very speculative market, very high prices, a decreasing quality, very poor small producers exploited through little transparent circuits. In short, a situation from which suffer Malagasy farmers who grow the precious beans, as well as the industrials who process vanilla for consumers.
In this complicated backdrop, the Livelihoods Fund chose to adopt an approach that radically transforms vanilla production, first processing and commercialisation conditions by leveraging three drivers: first, a group of companies – Danone, Firmenich, Mars and Prova, ready to commit in the longer term (10 years minimum) by supporting the project and buying sustainably produced vanilla; secondly, the motivation of several thousand of small producers on the East coast to commit to a high level of quality approach; lastly, Fanamby’s experience, a Malagasy NGO that already proved its ability to coordinate producers and to lead projects taking strongly into account the economic, but also social and environmental dimensions.
After two years of hard work, the project is on the right track: more than 600 producers are now members of these associations – with the objective to quickly reach 3,000; several hundred of thousand vanilla plants are in nursery phase; trainings have begun in the villages with the help of Fanamby’s technicians. The construction work of the building hosting the first processing of the vanilla is well advanced. Owned by producers’ associations, it will enable farmers to capture the value that today eludes them. The project’s industrial partners have started to take local production off, and they are going to increase their purchases this season. Local authorities understand the project’s benefit for the region and strongly committed to it. Further partnerships are discussed to protect this region’s rich biodiversity and to ensure food security through the diversification of productions.
What is more particularly at stake in this project is the reconsideration of the so-called “commodities”, which have been dominating the industrial sourcing rationales for the past decades. Vanilla, cocoa, sugar, etc. have become commoditised worldwide raw materials like gasoline and ore, characterised by prices and technical standards. This “disconnection” of the food chain led us to amply break the link with agriculture and farmers. Yet, we now witness a broad movement towards “reconnection” – to trace productions’ origins and thus their social and environmental conditions, which should speed up and expand thanks to technologies like blockchain. It’s a fact that the link between industrials and agricultural producers is to be renewed. The Livelihoods – Vanilla project in Madagascar aims at creating a long-term commercial relationship that benefits producers, industrials and territories alike. The goal is therefore to escape the vicious circle linking poverty, poor quality productions and environmental damage. The partner-companies participate in the project’s governance with the representatives of the producers and with the NGO Fanamby and openly discuss problems and solutions. A key change factor lies in the long-term investment made by the Livelihoods Fund and its partners.
The road ahead surely is difficult, but this growing relationship built on trust, and which has been strengthened by the senior executives’ visit on the ground, certainly is the best guarantee of success.