The future for vanilla producers is sweet when trade is fair

UGANDA LETTER:Perched on a hillside amid the lush, green slopes of central Africa, Ndali Lodge peeps out from the foliage.

The guesthouse is part of Ndali estate, a 1,000-acre farm just north of the equator in the southwestern corner of Uganda, near the border with Congo. Ndali farm is a leading producer of vanilla, which is valuable and relatively rare.

The history of Ndali stretches back to the early 1960s, when Yorkshire man Trevor Price bought the land. He was a successful tea grower who wanted to produce tea at Ndali but the soil proved too alkaline to do so, and most of the land was left to go wild.

Almost four decades later, following an intense period of disruption during the administration of Idi Amin, Price’s grand-daughter Lulu and her family inherited the farm following the death of her uncle. Her cousin Aubrey runs the Lodge.

By then, the farm was producing tea, coffee and vanilla in small pockets.

Lulu chose to focus on vanilla, in part because record prices were being paid for it on world markets. The decision proved auspicious. Lulu gradually expanded the business, using her links with Britain to foster relations between suppliers and potential export markets.

Today, Ndali employs 1,000 vanilla farmers around the Rwenzori mountain area, from where the vanilla pods and products are shipped around the world.

Vanilla production is a testing business. One of the reasons for its high price – it is the second most expensive flavouring ingredient after saffron – is the lengthy cultivation process involved in harvesting the plant.

Ndali produces vanilla in three forms: pods, powder and extract.

The vine takes at least three years before it can start flowering and it requires constant pruning and cultivation. Following this, there is a 48-hour window during which each vanilla orchid must be hand-pollinated.

Once ripe, the dark, oily pods are taken to collection points in villages across the region and taken to Ndali where they are sweated and dried in the sun, a process that can take from three to six months.

The pods and powder extract are then packaged and shipped to customers.

While vanilla is perceived to be something of a niche product, it is used by some of the world’s biggest food companies. Coca-cola, for example, is one of the world’s biggest buyers of natural vanilla, sourcing the ingredient from Madagascar, the world’s largest producer.

Ndali’s customers in the UK and Ireland include Tesco and Waitrose, while it also supplies speciality food stores. Its products are used in restaurants, and have been endorsed by such chefs as Hugh Fearnley Whittingstall. Ndali also supplies ice cream makers Ben and Jerry’s.

Ndali’s success with vanilla encapsulates what many in the development world are trying to attain for Africa.

While the continent is one of the world’s main food producers, most of its products are shipped out of the country as bulk commodities, with most of the processing and packaging – the value-adding activity – taking place elsewhere.

Chocolate is a prime example. While Africa produces most of the world’s cocoa, little manufacturing or processing takes place there.

Ndali challenges this status quo, shipping a premium, high-priced product straight from Africa onto the shelf.

Underpinning this business model is the principle of fair trade. The 1,000 vanilla farmers that supply Ndali are fair-trade-certified.

While fair trade aims to secure a fair level of payment and sustainable method of production for farmers and suppliers, the certification also has economic benefits.

As well as guaranteeing a minimum price for producers, such products attract an economic premium, due to their standard and quality.

For the Ndali vanilla farmers, this means that they can be paid up to twice the current price commanded by average vanilla beans.

Vanilla production is also one of the few agricultural activities that suits the small-holding structure of the African agricultural system.

The average vanilla farmer has about 250 vines on half an acre, which suits an agricultural activity that is labour intensive.

The success of Ndali farm illustrates how private enterprise can succeed in Africa, through a clever linking of producer with purchaser, mediated through the fair trade system.

As Africa tries to engage fully with enterprise and exploit the huge business potential of the continent, moving towards a more value-added business model might just be the solution.

Suzanne Lynch travelled to Africa with support from the Simon Cumbers Media Fund