Funding to let vanilla farmers enjoy the fruits of their labor as much as consumers do

Vanilla is one of the most popular spices in the world, but vanilla farmers usually don’t benefit much from the high prices end customers are willing to pay. This concern led Incofin investing in vanilla via the Fairtrade Access Fund.

Chances are high that the vanilla flavor of your ice cream comes from the Sava region in northeastern Madagascar. Responsible for 80% of the global production of Bourbon vanilla, Sava is by far the main supplier. 70,000 smallholder farmers produce on around 25,000 hectares of  land. This is also the region where Lafaza sources its vanilla beans. Incofin’s Fairtrade Access Fund (FAF) recently approved a loan of USD 1.5 million to vanilla processor and exporter Lafaza Trading SARL (Incorporated in Madagascar). Lafaza buys premium vanilla from smallholder farming communities at fair trade prices and then sells it for retail, wholesale and through export channels. But the company has more to offer than just an interesting price to the 1,000 vanilla farmers they are working with.

Those farmers live in small, isolated villages, often requiring several days of travelling by canoe, hiking or overcoming difficult roads to reach them. That is how Lafaza makes the difference; the company does not just buy the vanilla, but also provides capacity building on proper cultivation and curing techniques to enhance the quality of the vanilla and which enables the farmers to acquire organic certification.