Sweet smell of vanilla

The fragrant spice vanilla has brought the sweet smell of success to smallholders in parts of Uganda with its rocketing prices and increased incomes for growers.

The boom in price can be attributed to several factors, with a 10 per cent drop in production from major producers Indonesia and Madagascar and higher international demand being the most obvious causes. Global demand has grown an estimated 10 per cent since soft drinks manufacturers started flavouring their products with it.

This year, world buyers will be trying to sniff out around 2,000 tonnes of processed vanilla, but current supply does not match demand and there is likely to be a shortfall of around 200 tonnes. Processors or exporters can now expect $80/kg to $200/kg (depending on quality and order quantity) for the spice. Prices to the grower, although significantly less, have also soared. Uganda National Vanilla Association (UNVA) co-ordinator Henry Kibuuka says that the price for a kilo started off at $12.50, but climbed to $26 by the end of June.

"I have never in my life seen anything as profitable for smallholders as vanilla," says Steve New, a high value crops advisor with more than 25 years' experience. He works for a USAID funded project called Investment in Developing Export Agriculture (IDEA) which has provided training and technical assistance to vanilla growers in Uganda since 1995. Vanilla is better suited to smallholder production, says Mr New, because it is so labour intensive. Each plant requires individual attention during cultivation and each flower must be pollinated by hand. Other advantages for smallholder production include the ability to intercrop vanilla with bananas, coffee and trees and the low start-up costs. "The capital cost of starting a vanilla garden is only USh1,000 per plant," he says. "After establishment of the plants, the only significant cost is labour."

Being accessible to smallholders has been crucial to vanilla's success in Uganda to date, and the UNVA reports that there are now more than 20,000 growers, a figure that is increasing daily. As a result, Ugandan production of green vanilla pods has almost doubled from less than 180t in 1998 to 350t last year, making it the country's fastest growing smallholder crop. Uganda has excellent conditions for vanilla production and major international buyers are already sourcing Ugandan vanilla. According to Steve New, buyers report that quality is good, but the quantity available is insufficient to meet demand.

This high demand has led to many farmers harvesting the beans early, in the first half of June in Mukono District, east of Kampala city and as early as May in Bundibugyo in south-west Uganda. High prices have also encouraged thefts of the crop, particularly in Mukono District. "Processors and speculators want to take advantage of high prices and pressurise growers to pick early," says Mr New. "If they do not pick, there is also the possibility of theft, with prices being so high for green beans."

IDEA's technical activities will end in March next year, but USAID and other donors will continue to support the fledgling industry through new projects. "Major capital investment is not needed," says Steve New, "but interventions should focus on the private sector and on expanding extension, training and market promotion activities carried out by the UNVA. Resources also need to be allocated for applied research to ensure the long-term future of the industry."