Madagascar’s Chinese Vanilla

Madagascar is the leading exporter of vanilla, one of the world’s most valuable and sought-after spices. Yet despite accounting for almost half of global production, the island state’s traditional farmers are struggling to earn a living.

A recent influx of Chinese investors has led to increased productivity to meet rising international demand. But many local growers say they have not been reaping the benefits as most of the profits have been flowing into foreign hands. Instead prices for their crops are being forced down and there are negative consequences for quality and sustainability. With most Malagasies already living at or below the poverty line, the long-term prospects for their livelihoods are worrying.

Most of the vanilla is grown in and around Sava, in Madagascar’s northeast corner. The region turned to farming this lucrative crop in the 19th century, when French colonialists brought vanilla pod-producing orchids over to Madagascar from Mexico.

The French also created the first wave of Asian immigration by inviting Chinese labourers to come and work on these new plantations. Those who decided to settle mixed with the local population and their children are now fully integrated into Malagasy society.

But the story is rather different for the Chinese who have arrived in the last decade or so. Unlike their forebears, today’s migrants are not labourers or farmers, but wholesalers who control supply routes directly back to Asia, a market with a growing appetite for vanilla, but little apparent concern as to the methods of production, the consequences for the indigenous population and the environment.

It is a familiar story in the developing world: while globalisation in agriculture does have many positive consequences – opening up world trade, increasing employment and opportunities and so on – for farming communities, particularly those reliant on single crops for the majority of their income, it can make them dangerously dependent on the vagaries of an international marketplace they cannot directly control or often even access other than through foreign intermediaries.

Nevertheless, Madagascar’s government is keen to strengthen its ties with China. Military coups in 2002 and 2009 lead to a suspension of direct assistance from the United States and the European Union. China was only too happy to fill the void and, in the years that followed, swiftly became the administration’s new economic and political ally, increasing investment and boosting orders for Madagascan products.

By 2011, the government was offering large tax breaks to Chinese companies exporting Malagasy vanilla. But while overall export volumes rose as a result, prices for vanilla crops locally were under pressure as the new buyers used their dominant position in the market to secure the best deals.

This desire to accommodate Chinese interests appears to have affected the local industry in other ways too. Previously, planters took their produce to the buyers as and when the pods were ripe. Green vanilla was sold continuously from May to January of the following year.

But, keen to structure production better to suit the requirements of their new trading partner, the authorities have fixed a date for the harvest: growers must now pick everything they have over the course of just one week per year. For traditional growers this is sacrilege and threatens the life cycle of their vanilla crops as well as the quality of Madagascar’s world-famous product.

In this episode of People & Power, French filmmaker Chris Huby asks whether China is offering a badly needed economic lifeline to one of the world’s poorest countries or creating another victim of globalisation: a resource-rich country trapped in a cycle of dependency on foreign investment and aid.