Uncertainty for Ugandan Vanilla farmers as prices drop

For nearly four months, Emmanuel Kyabuthire had abandoned the comfort of his bed, spending cold nights inside his one acre vanilla plantation.

Kyabuthire’s problem are the rampant thieves that sneak into farmer’s gardens to steal or harvest the vanilla beans before selling them to illegal stores. In Uganda, there are specific times when vanilla buyers are supposed to open their stores to the farmers and it is always set by the Ministry of Trade and Industry.

The current legal vanilla harvesting and buying season officially opened on January 10, 2023 and will last for at least up to March. This is when the farmers are free to harvest the vanilla beans and sell them out at the store.

Kyabuthire is not alone because it is a known practice in most vanilla growing areas in Uganda that a farmer must guard the cash crop from being invaded at night. Others have had trouble with guarding the gardens even during the day.

“My family is in Kasese town. They stay in a house I constructed out of the earnings from the previous season of 2018 when we sold vanilla at a good price. My work is to keep in our village, Mughete in Kitabu Sub-county to protect my vanilla from thieves” Kyabuthire stated.

These farmers have spent the nights out in the gardens through September to January thinking that they will get a favourable farm-gate price hence smiling to the bank.

However, their hopes faded when the government announced the harvest timelines without an indicative price. Unlike Cotton where there is a fully fledged public entity the Cotton Development Organisation (CDO) which sets the indicative prices for cotton harvest every December, the determination of vanilla prices is left to the private sector players.

Cotton farmers have since December been fetching Shs2000 per kilogram of the crop and they have happily picked the cash crop and taken it to the stores without complaints of being cheated.

Much as vanilla fetches more cash per kilogram than cotton, the cost of production is high because in the Ugandan regions where it is grown, farmers have to brave the cold of the nights to protect the crop. In some cases, thieves armed with guns or spears have killed farmers from inside their plantations before taking off with the harvest.

“As I speak now my wife is admitted in hospital with malaria and I don’t know how much we will be charged. I recently harvested my vanilla but the buyers only gave me a receipt indicating the kilograms they have taken and told me to wait for the money” said Zephanus Syayira, a resident of Buhandiro village in Mahango sub-county.

Syahira claims that he was offered Shs15000 per kilogram of vanilla and he had no option than to take the receipt and wait for the money.

Jovinale Muke, the LC 3 Chairperson of Kyondo sub-county says that most of his farmers are in tears because of the low prices. He says that the sub-county security committee formed mobile teams of village vigilantes to protect vanilla from thieves with an expectation that the farmers would make a contribution during the harvest season.

“The farmers are not receiving cash for their vanilla and the team that monitored the roads for thieves, need something from them as promised. The government should support the farmers and ensure that the companies taking their vanilla pay in time because the challenges are many” he said.

There is no official price for vanilla in Uganda at the moment and the buyers have set themselves different prices. In some places, a kilogram of vanilla pods is being bought between Shs25000 and Shs30000.

Immaculate Ndagire, the Communications and Membership Services Officer for the Association of Vanilla Exporters of Uganda (VANEX) revealed that the current farm gate price of vanilla that is being paid by member associations is between Shs30000 and Shs60000.

“Uganda is a free market economy where the prices are determined by forces of demand. The range has the same since around 2019. There were also effects of Covid-19” said Ngagire.

The last time the farmers smiled to the bank was in 2018 when the vanilla prices rose to between Shs250000 and Shs300000 per kilogram. Many farmers changed their lives for better with many putting up permanent buildings and others setting up businesses.

Ndagire said that prices went up at the time because Madagascar the world’s leading producer and exporter of Vanilla was undergoing hash climatic conditions that could not favour the crop. Strong winds on the island nation have always brought down vanilla plantations.

“The price boom here in Uganda depends on the climatic conditions in Madagascar. If Madagascar produces are low, then we have better prices here in Uganda because of the demand on the international market” she added.

VANEX brings together 13 companies that buy, dry and export vanilla and they are the ones that have always set up stores in different parts of the country to deal with the farmers.

Asked why many farmers are being asked to go home empty handed after giving their produce to the companies, Ndagire said that not all organisations are using the receipt system.

“There are some buyers who have Memorandum of Understanding with farmers (on mode of payment) and there are some buyers who pay cash. Again the prices by different buyers are determined by the quality of the vanilla beans because they don’t mature at the same time” explained Ndagire.

Some of the local buyers who book vanilla from farmers with hope to make profits through doing the middleman role are counting losses. It is their practice to advance farmers with cash especially during festive season so that they will be supplied with the harvest when the market is legally opened.

Basing on the prices of the last season that were between Shs40000 and Shs60000, the middlemen advanced farmers at between Shs35000 to Shs50000.

January Kathoboli, a local buyer said that with a lot of optimism, advanced farmers averaged at Shs45000 but has since failed to find a better market from the established companies at the time of harvest.

“The least I thought the companies will buy from us who trade locally is Shs50000 but most of them coming with cash have put the price at Shs30000. I can’t go back to the farmers to demand a refund of Shs15000 and therefore we are in losses” Kathoboli testified.

Statistics about the quantity of vanilla export, how much foreign exchange it earns to the country and to where it is mostly exported remain scanty because there is no established regulator of the subsector like it is for coffee and cotton.

In Madagascar, vanilla prices are between $394.47 and $455.02 per kilogram at the start of calendar year 2023 hence a reasonable rise from an average $225 per kilogram in 2022.