By Matthew Candau
Madagascar, renowned for producing the world’s finest vanilla, faces an increasingly volatile future due to the heightened prevalence of extreme weather conditions. Early in 2024, tropical cyclones ravaged the island, wreaking havoc across its prized vanilla crops. These extreme weather events have not only threatened the livelihoods of many Malagasy farmers, but have also highlighted the fragility of an industry that is vital to the country’s economy.
The Tropical Cyclones: A Devastating Blow
In March 2024, Cyclone Gamane tore through Madagascar, bringing winds exceeding 150 kilometers per hour and torrential rains to the northeast Sava region—the heart of the world’s vanilla production. Fields were submerged, plants uprooted, and infrastructure shattered. Georges Geeraerts, president of Madagascar’s SOPRAL Sarl, warned that the storm could slash the harvest by up to 50%, with some farms reporting total losses. This devastation followed Cyclone Alvaro in January and preceded Cyclone Ialy in May, which also disrupted the island’s weather patterns.
In the years leading up to Cyclone Gamane, Madagascar had already faced significant challenges from other storms. Cyclone Batsirai in February 2022 and Cyclone Freddy in February and March 2023 both ravaged the island, causing widespread flooding, damage to crops, further straining the country’s agricultural sector.
For the small-scale farmers who make up the backbone of the vanilla industry, the destruction was catastrophic. With their primary source of income obliterated and transportation networks in tatters, farmers struggled to salvage what little vanilla remained.
Vanilla: Madagascar’s Economic Backbone
Vanilla is not just a crop for Madagascar; it is an economic cornerstone of the nation. Producing around 80% of the world’s vanilla, the spice accounts for nearly 15% of Madagascar’s export revenue and provides employment for approximately 80,000 people, primarily in rural areas. For these communities, vanilla farming is more than a livelihood—it is a way of life, with the labor-intensive crop taking three to four years to mature.
Madagascar’s vanilla commands a premium price on the global market, sometimes reaching as high as USD $600 per pound, making it the second most expensive spice in the world, even pricier than silver. This high value, however, makes the industry particularly vulnerable to fluctuations in supply and demand. Cyclones like Gamane exacerbate this volatility, creating a precarious situation for farmers and the national economy.
Moreover, the majority of vanilla value-added processing occurs overseas, leaving Madagascar reliant on exporting raw vanilla beans. Additionally, as much as 85% of vanilla-flavored and scented products on the market today are made with synthetic vanillin, which is gradually edging out the more expensive natural alternatives.
The Impact of Extreme Weather on Vanilla Cultivation
The cyclones of 2024 are not isolated incidents. Madagascar has been increasingly battered by extreme weather events, including cyclones, droughts, and erratic rainy seasons. Vanilla bean orchids are highly sensitive to changes in temperature, humidity, and soil moisture, making farming ever more challenging.
Strong winds and heavy rains can destroy crops and wash away topsoil, making recovery difficult. Prolonged flooding can also lead to disease and pests, further devastating yields. Moreover, Madagascar’s underdeveloped transportation infrastructure means that harvested vanilla beans often struggle to reach ports, especially after floods. As extreme weather events become more frequent, foreign investors may turn to other vanilla-producing regions with more stable climates, such as Hawaii.
Government Response and Agricultural Policy
Recognizing these challenges, the Malagasy government has taken steps to support the vanilla industry. A key measure is the establishment of a minimum export price for vanilla, currently set at USD $250 per kilogram. This policy aims to stabilize prices and protect farmers from global market volatility and exploitative purchasing practices, providing a much-needed safety net.
Additionally, the government has invested in agricultural extension services to boost vanilla production. The Training and Visitation (T&V) system, which has evolved since the 1980s, involves NGOs, private operators, and farmers’ organizations collaborating to offer training in sustainable farming practices, soil conservation, and pest control. International donors, including the World Bank and the Livelihoods Fund for Family Farming, support these efforts to improve access to quality seeds and plants, enhance technical and financial management, and foster public-private partnerships.
Infrastructure improvements are also a priority. Projects such as the construction of a 100-kilometer irrigation pipeline in southern Madagascar and a new highway from Antananarivo to Toamasina aim to mitigate the impact of cyclones and improve market access.
President Andry Rajoelina has emphasized value addition to reduce the export of raw materials and strengthen the local economy. The ‘One District, One Factory‘ (ODOF) program aims to establish at least one factory in each of Madagascar’s 114 districts. With factories already in 45 districts, the initiative is paving the way for local vanilla processing and extract manufacturing. By processing more vanilla locally, Madagascar can enhance product quality, create jobs, and increase the economic benefits and profitability of its exports.
Challenges and Opportunities
To secure the future of Madagascar’s vanilla industry, the nation must embrace a multifaceted strategy centered on resilience, economic diversification, and technological innovation. Strengthening agricultural extension services is paramount. These services should focus on educating farmers about climate-resilient practices and crop diversification. This education will be crucial in equipping farmers with the knowledge and tools they need to adapt to changing environmental conditions, mitigating future risks.
Investing in research to develop climate-resilient vanilla varieties is another critical step. Advanced agricultural technologies such as precision farming, offer promising solutions. These technologies can help optimize resource use and improve yields, ensuring that farmers get the most out of their efforts. Tools like satellite imagery, drones, and mobile applications can revolutionize crop management, allowing farmers to monitor crop health, manage pests, and make informed decisions based on real-time data.
Developing comprehensive insurance schemes to protect farmers against crop losses due to extreme weather is also crucial. Tailored insurance products can provide a safety net, offering financial security in times of crisis. Such schemes would enable farmers to recover quickly from disasters and reinvest in their farms’ long-term sustainability.
Economic diversification is another critical area that requires attention. Relying heavily on vanilla as a cash crop exposes farmers and the national economy to significant risks. Encouraging farmers to grow alternative crops such as rice, cloves, and spices can provide a buffer against the volatility of the vanilla market. This diversification not only stabilizes farmers’ incomes but also enhances food security.
Furthermore, leveraging the ODOF program can be pivotal in driving economic diversification. As factories emerge across the country, industries such as textiles and renewable energy are poised to flourish. Textiles can leverage local resources and traditional crafts, transforming artisanal skills into sustainable manufacturing opportunities. Meanwhile, the renewable energy sector offers a chance to harness Madagascar’s abundant natural resources, providing a stable power supply and reducing reliance on imported fuels. By diversifying into more resilient sectors, Madagascar can mitigate the economic shocks of climate change, ensure job stability, and foster sustainable growth. The ODOF policy thus serves as a strategic pivot, steering the nation towards a more balanced and robust economic future.
Concluding Thoughts
Madagascar’s vanilla industry stands at a critical juncture. The devastating cyclones of 2024 have highlighted the sector’s vulnerability to climate change. While the Malagasy government has taken significant steps to support farmers and stabilize the industry, the challenges posed by climate change and market volatility remain formidable.
To secure the future of its vanilla industry, Madagascar needs a multifaceted approach that includes continued investment in sustainable farming practices, infrastructure improvements, and technological innovation. By addressing these challenges head-on, Madagascar can build a more resilient vanilla industry capable of thriving despite adversity. The stakes are high, but with concerted effort and strategic planning, there is hope that Madagascar’s vanilla can weather the storms ahead.
The views expressed in this article are the author’s own and may not reflect the opinions of the St Andrews Economist.
Image Source: https://globalvoices.org/2013/01/08/the-storied-travel-of-vanilla-bean-from-mexico-to-madagascar/