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I forward the message below to the conversation on behalf of Markku Lahtinen. Tiina Huvio Advisor for Agriculture and Rural Development Department for Development Policy Ministry for Foreign Affairs Katajanokanlaituri 3 FIN-00161 Helsinki tel: +358-9-16056162 fax: +358-9-16056100 mobile: +358-40-7763291 <address removed> I would like to reply to Shaun's message since I have been involved in one of those NGO people that helps locals grow vanilla in Madagascar. This is done alongside with pepper, litshe, mango, corn, beans, carrot, bokshoi, chili, coconut, acasia, harongana and other food and building crops, what ever the village needs and wants. Some endemic, most not, some they sell, some they eat, some they build schools with, which we already have four in the area. The next generation is involved in growing plants too as the schools are given their own plant nurseries. Vanilla planifolia, the most common and best of the Maxican orchids to grow as Bourbon Vanilla, actually takes three to four years, not two as mentioned below, to start producing good crops. And the third year crop is a minuscule one of about 10% of years to follow. The villages that can and want to actually stick with it for that long, can increase their income manyfold, even if we only plant a few hundred lianas /village. Some don't stick with the program, but the financial loss is not big as the initial vanilla is quite cheap (5 for a dollar) but still too expensive for the villagers to buy themselves. It takes five to six months of work every year after the three years just to pollinate the vanilla and to ferment it to the famous black and fragrant vanilla stalks. Thereby, I doubt that the eagerness to cultivate vanilla would be so large nor the know how. As regards the producer price, I don't believe that it really matters whether the vanilla sells at $500/kg or $50/kg, because it can still increase villagers' revenues more than any other plant presuming they are willing to work with it. In our NGO we have actually budgeted for it to be sold green (not fermented, which would involve too much knowhow and materials and should be left to the big vanilla plants in the north of the country) at even less, and this is still very good income. It translates to about 200 cups of rice /1 kg of sold vanilla. And as we operate far away from the main vanilla belt in the north, which is also the main cyclone area (Gafilo this year, Hudah in 2000 and others every year), we bring more security countrywide. This means that Madagascar's export crops are not all in one place thus increasing financial security. If the belt is hit by yet another big cyclone in the years to come, which is unfortunately increasing in possibility since the global climate is warming due to human error (but this is another matter), the price of vanilla should not decrease. As oversupply goes, this is not so with vanilla, not for decades anyway. Further we cannot predict. The world produces at the moment less than half the demand, the proof of which lies in the need for and common use of the far inferior synthetic vanilla. The balance will tilt a bit after India enters the market, true, but as the quality indeed matters, Malagasy vanilla will always have it's buyers. It is simply put the best place to grow vanilla in the world. Malagasy vanilla has 3 times as much flavor as eg. Mexican vanilla, the country of origin. As a former marketing and food industry manager, I suspect that the demand of vanilla will only grow and can be boosted if necessary. Best regards, Markku Lahtinen, MSc Technical Advisor of Project DODO in Manombo, SE Madagascar Lecturer in Biology in the University of Helsinki, Finland -----Original Message----- From: s.ferris [mailto:<address removed> Sent: 4. toukokuuta 2004 15:58 To: <address removed> Subject: FW: The question Dear Duncan, To your question. Do, we agree with Peter that the first thing we should do is cease funding any programmes that lead to increased production of commodities? I understand Peter’s question as meaning that we need to analyse what the effect of embarking on a particular course may lead to. A good example at the moment is Vanilla. In the last 3 years everyman and his NGO that comes into my office asks me how to grow vanilla. They have seen the price rising from $300 – 500 per kg and want some of the action. Donors are pouring funds into the vanilla option. It takes two years to get a first crop of vanilla and quality is very important. As you will know, Vanilla was priced at $50 / kg in 2000 and it mainly came from Madagascar, a very poor country. After two cyclones, a coup and some difficult political reforms, Madagascar is going to come back. At that time everyone else will be having their first or second harvests and as the Madagascan supply comes back on stream prices will fall to $30 - >50 / kg. This will horrify the uninformed. The bad news however, is that many more poor farmers will contribute to another oversupplied market. The poor in Madagascar will become even more poor. So, I think this is a good example of how lack of analysis and lack of regional co-ordination can unwittingly destroy a market rather than build a sustainable, competitive system for a limited number of countries to exploit and build reasonable incomes. Is this not the same story for coffee, and many other commodities that have been developed in too many places too quickly to supply ever more unregulated markets. Perhaps, this is why Peter’s SM argument is so compelling, it is straight to the heart of the matter. The development agencies and the Washington Consensus have worked, some with good intentions, some with special interest groups, knowingly or unknowingly to dismantle the regulations within international markets, they have promoted liberalisation policies that were export focused and have succeeded in providing large companies and millions of rich people with cheap goods produced by many more millions of poor people. The Bank and UNCTAD are now considering insurance and compensation schemes based on gains through futures market. The proceeds, however that is calculated ?? will be used to support diversification schemes and ……….oversupply other markets. Apparently there is consensus on this approach. Great. Shaun Ferris Foodnet co-ordinator IITA-ESARC email: <address removed> Web www.cgiar.org/foodnet Fax 000256-41-220217 Tel. 000256-41-223445/221009 Mobile (0)77-221163 Roaming mobile 075-787813 ____________________________________
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