Bitter reversal for vanilla growers

Madagascar provides one of the world's favorite flavors, but falling prices have set the industry back on its heels


BEMANEVIKA, MADAGASCAR -- The house that vanilla almost built soars above all the others in this remote village of one-story wood huts and dirt lanes.

Jamaro Bernad, a 57-year-old grower, began erecting his four-story concrete dream home two years ago, when the price of vanilla shot to record highs amid cyclone damage and price speculation.

But he finished only the top two floors before the price plunged by 90 percent, a welcome change for American consumers but a dread occurrence here.

"I expected the price to stay high," Bernad said with a what-can-I-say smile. He at least hoped the price would not fall so far. "In this region, vanilla is the life of the people. Life depends on vanilla. If the price is cheap, we all have some problems."

Right now, they have problems. This island nation off Africa's southeastern coast produces 60 percent of the world's vanilla beans - used to flavor ice cream, cakes, colas and much more - but the price is at its lowest in years. And the future is hazy, as other countries move to profit from vanilla's enduring popularity and food makers turn to cheaper, imitation flavors.

If that is not enough, the head of Maryland-based McCormick & Co., the world's biggest vanilla buyer, says his company has begun buying more of its vanilla from Indonesia, India and Vietnam. Though some industry experts question his version of events, Robert J. Lawless claims Madagascar President Marc Ravalomanana pushed vanilla prices ever higher in 2003, rattling McCormick's bottom line.

"There's no question in my mind he's going to sell less vanilla over the next five to 10 years," Lawless, McCormick's chairman, president and chief executive, said in a telephone interview. "Customers have long memories."

He added: "I wanted to go talk to him and say, `You're killing the golden goose.' If he realized it, he didn't care."

And so a gloominess hangs like the thick humidity over this tropical region, where people have long made a living from the vanilla supply chain as growers, collectors or exporters. With the boom but a memory, cars are being sold, children taken out of private schools, houses left unfinished with stairways to nowhere.

The only upside is that armed bandits have less incentive to steal vanilla now that the price has sunk from average highs of about $230 per kilogram at one point in 2003 all the way to $25, a level not seen since the late 1990s.

But vanilla is what people do. Despite the price, Bernad goes jauntily into the forest every day, tracing the steps of his father before him and those of generations of Malagasy, as people from Madagascar are known.

Vanilla, the only orchid that produces an edible fruit, reached Europe in the 1500s, courtesy of Spanish explorers returning from Mexico, and became a prized perfume and flavor. Thomas Jefferson is credited with introducing it to the United States - now the world's largest consumer - after visiting France in the late 1700s.

By the mid-1800s the vines themselves made it to Madagascar. Because the bee that pollinates the plants in their native Mexico does not thrive here, growers must hand-pollinate every flower. Some accounts say the method was discovered by a Belgian botanist; others say it was a slave boy on Reunion, an Indian Ocean island near Madagascar.

Whoever it was, the method has not changed. On this morning, Bernad had risen at daybreak and, with three helpers, walked barefoot a mile through the quiet village, over a log submerged in a murky marsh and down a hilly path to his plants.

For two hours they worked separately over an area the size of two football fields, linking each flower's anther and stigma with sharpened bamboo sticks so that a vanilla pod, or bean, could emerge.

The green-and-yellow flowers bloom from September through December, but each blossom lasts just one day.

Returning later, Bernad re-laced the vanilla vines over and through the branches of 12-foot coffee trees - "money in money," they say here - to get the right blend of shade and sun preferred by the orchid.

In Madagascar, growers like Bernad sell to collectors, who then sell to exporters, many of them in the city of Sambava, an hour's drive east. Sometimes small collectors sell to large collectors.

Late last month, a bookish collector named Jaonarisina Razafindrainibe walked into a dimly lit storage area next to his office, a half-block off Sambava's lone thoroughfare and two blocks from the aquamarine Indian Ocean, with its white-sand beaches and swaying palm trees.

A 50-kilogram batch of prepared beans had just arrived, suffusing the room with its distinctive, sweet aroma. The beans, whose life began last fall, underwent a long process to reach this stage.

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