
Jacob Sebastian no longer wants to invest in his vanilla plantation. He still has more than 1,000 vanilla plants intercropped in his half hectare (ha)
rubber plantation in Kerala's Kottayam district. But this year he did not hand-pollinate these plants so he does not expect a crop. In a nearby
plantation, P J Joseph uprooted 1,250 plants that grew on one-third of his 1.2 ha farm. Joseph is now planning to grow only rubber in this area. In
adjoining Eranakulam district, Ibrahim, a small-time farmer, has removed all his vanilla plants from 0.8 ha of his coconut plantation.
The story repeats in other parts of Kerala as well. Farmers say the business of vanilla has let them down. The crop is highly labour-intensive and
takes time to flower, the seed takes even longer to cure. It's literally a labour of love. Vanilla does not self pollinate. In nature, vanilla is only
pollinated by the Mexican bee and humming birds.But these are found only in Mexico and all attempts to make them work in other regions have
failed. Farmers have to 'manually' pollinate the flower. But the flower of vanilla lasts about one day, sometimes even less, so farmers have to check
every day for flowers they can pollinate. Then they use a sliver of bamboo, or a pin or needle or even a toothpick to separate the anther and the
stigma and press the anther on the stigma. The flower then pollinates. The bean is born.
This green bean does not have any flavour. It now has to be cured--a time-consuming process taking up to six months. Meticulous management is
required to ensure that the flavour is enhanced, without any spoilage. About five to six kg of green beans when processed, give a kg of cured
beans. The cured beans can be exported and last for many years.
The final stage is the one in which the vanilla is extracted from the beans. This is a process that has been tightly controlled globally and demands
high price. This is when vanilla, the spice of life, is finally ready to use.
But even then, the quality is a matter of science and choice. Vanilla is assessed on the basis of its principal flavour and aroma compound--vanillin.
All this, in turn, is influenced by where the bean is grown, how it is grown and cured. Vanilla from Madagascar, the Comores and Reunion islands is
called the Bourbon type, which sets the industry's standard for high-end beans. Indonesia, which harvests its beans early, has captured the low
quality bean market. But analysts say Indonesian beans are fast catching up in their flavour and quality.
Trailing the vanilla trade
Madagascar is the leader in vanilla, controlling over half the world's market. India made a relatively late entry into world trade but its stock is rising.
In 2006-07, India produced 230 tonnes of cured beans, more than 10 per cent of the world production of over 2,000 tonnes of cured beans. This
was up from 188 tonnes of cured beans produced in the previous year. This is partly because the crop, which needs three years to mature, is ready

for harvest. Kerala leads the production of vanilla beans in India with a share of more than 52 per cent. Last year, Kerala alone produced 122 tonnes
of cured beans or close to 660 tonnes of green beans, followed by Karnataka with 88 tonnes and Tamil Nadu with 22 tonnes of cured beans.
Vanilla is not new to India or Kerala. In fact, the English East India Company tried to introduce this orchid in 1830 but the plant died soon after it
flowered. The British, competing with the French colonies of Madagascar, then experimented in other states--Assam, Bihar, Tamil Nadu and West
Bengal. But all attempts failed.
In the 1990s, when the spices board tried to persuade farmers to take up vanilla cultivation, there were hardly any takers.

The reason was that till
1996, the trade and the price of vanilla was tightly controlled through a cartel (known as Univanille) based in Madagascar and so the price remained
low and volatile.
By then the market was already segmented. The high-end market was under the sway of Madagascar and Comores, which in the best of times
earned between
us $60 to
us $75 per kg of cured bean. The low quality market was
catered to by Indonesian beans, priced between
us $20 and
us $30 per kg. Other
countries, like Uganda, that were not part of any of the groups, earned between
us $50 to
us $60 per kg of cured beans.
Actually, vanilla prices have never been stable. Market observers talk of the total opacity that characterises the international trade in vanilla. In the
1990s, for instance, Madagascar dictated terms because it had huge stocks of beans. As the demand was more or less fixed, any influx of beans
meant a decrease in selling price in 1997, export prices for 'low quality' Indonesian vanilla went down to as low as
us
$10 per kg and even bourbon vanilla was selling at a little more than
us $15 per kg.
But things changed in 2000. That year, Madagascar was hit by the cyclone Hudah and a severe drought struck Indonesia. Vanilla prices
sky-rocketed. By 2002, one kg of cured beans was trading at
us $87 and by 2004, the prices of the beans had jumped
to
us $400. Price of green beans was also up to more than
us $50, even though
Madagascar stabilised its production by 2004.
Gold rush in India
This high in prices set off a gold rush in India. In 2002, farmers began with incomes of Rs 1,250 for a kg of green beans (against the Rs 50 they are
being offered in 2007); by 2003 prices had peaked to Rs 3,500 per kg. P R Muralidharan, treasurer of the Indian Vanilla Growers Association, recalls
this heady period "The news of the failure of Madagascar's crop had spread like wildfire. Farmers saw prices going up. Anticipating even higher
returns, they took up vanilla cultivation." The bean was so valuable that farmers hired watchmen, posted guard dogs and even put up electrified
fences to guard against thieves. P J Joseph of Kottayam, who made a killing from his one acre vanilla plantation, says he hired guards because,
"there were thieves all around who would pluck even the unripe beans. There was no other way to protect this crop which became as expensive as
gold".
But the gold rush did not last long. Madagascar and Indonesia revived beans from these countries were back in business. Prices crashed like never
before. One reason, market observers say, is because the high prices of 2000-2004 scared users of vanilla into switching to the artificial alternative.
It was lot cheaper compared to the natural variety and, quite significantly, a lot more stable in terms of price. Vanilla users were loathe to take any
chances with a cured bean whose price touched
us $400 per kg.
Most Indian vanilla farmers are today told they can sell their produce at Rs 50 per kg. The area under vanilla has gone down from 5,800 ha in the
three vanilla-growing states--Kerala, Karnataka and Tamil Nadu--in 2005 to 5,100 ha in 2006. "Those who took up vanilla farming after 2001 were
the worst hit. Expecting high prices in the coming years, many took huge loans to plant vanilla while some borrowed money to secure their farms
against thieves," said Muralidharan.

"Since vanilla takes three years before it starts to fruit, these farmers could not cash in into the boom and were
left with surplus stocks with no takers," he adds.
The blame game
Farmers in Kerala are a bitter lot. Much of their ire is targeted at the Spices Board of India, headquartered in Cochin, which they say has let them
down. Sebastian, who is also a member of Organic Spice Growers Federation, says "The spices board was busy promoting vanilla as the wonder crop
that would make you rich overnight but did nothing to ensure farmers make sustained incomes." Officials of the board, in turn, say that they had
warned the farmers of the unusual high prices, but they took no heed.
V S Kurian, chairperson of the board, told
Down To Earth that he believed vanilla was a profitable crop for farmers even at current prices,
because it was cultivated mostly as an inter-crop. However, Kurian's information about the price of vanilla did not match the reality of the current
depressed market. He said that the beans were selling at Rs 90 per kg, which was a break-even price.
Farmers refute Kurian's contentions. Studies like the one by M S Madan of Indian Institute of Spice Research in Calicut show that vanilla farmers will
incur a cost of at least Rs 340 (roughly
us $8) to produce one kg of green beans. Other studies show that the
cultivators will break even at around Rs 250 per kg of green beans. The price of vanilla in the international market has now stabilised at
us $50-
us $70 per kg of cured beans and
us $5-7 per kg of green
beans, in the higher-end quality market. But exporters who control the trade from India say that they cannot sell at this price. They ascribe their
reluctance to the opaque nature of the vanilla market.
The way ahead
Paul Jose, managing director of Vanilco, a cooperative which purchases vanilla beans from over 25,000 farmers in the region, blames the government
for the state of affairs. He points out that while marketing vanilla to Indian farmers, the government had talked of developing the domestic vanilla
market by introducing compulsory labelling in ice-creams and other products. It had talked of promoting the use of natural vanilla in the country
itself and provide markets for farmers. Vanilco, he says, has reminded Union government officials of these commitments, but to little avail.
At a meeting with vanilla farmers in 2005, Union minister for commerce Kamal Nath had promised help. But not much has happened since then. In
2006, the Union minister of state for commerce, Jairam Ramesh, had given assurance that the commerce ministry would make it mandatory for all ice
creams labelled and sold as "Vanilla Ice Cream," to contain a minimum of 1 per cent natural vanilla in it. "A year has passed, and it is still a mystery
why even a meeting that was scheduled has not taken place," Jose says.