Living Income Reference Prices for Vanilla from Uganda and Madagascar
Published: 4 Nov 2019
Vanilla has received increasing attention by the global public in recent years. Ongoing high vanilla prices, vanilla theft, and quality problems from vanilla beans harvested before full maturity have brought vanilla repeatedly to the headlines. This is a consequence of the extreme boom-and-bust cycles experienced by the natural vanilla market with long periods of excess supply, low prices and concerns about farmer poverty, and short periods of tight supply with excessive high prices but resulting vanilla bean quality shortages.
This report presents a study to establish living income reference prices for vanilla from Madagascar and Uganda, based on a methodology recently developed by Fairtrade International to determine minimum price levels that would enable a living income for smallholder farmers. The study analyses the costs of a decent standard of living, as well as the costs of sustainable production for vanilla farmers in both countries. The living income reference price is calculated as the minimum price needed for smallholder vanilla farmers to earn sufficient net income to afford a decent standard of living, assuming that they have a large enough farm to be 'fully employed' growing vanilla and have implemented good agricultural practices leading to adequate productivity and quality.