Vanilla Project

Vanilla Project
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Project mechanism

Vanilla is another local produce that is been procured on similar accord as Ginger, which ensures quality products obtained on mutually beneficial arrangement.

Under this forward buying contract, Kandy Vanilla Growers Association (KVFA) provides the assistance to the farmers who are registered with them. The association collects the harvest and processes the same and supplies to ELEPHANT HOUSE. Based on the length of the pod, price varies from rupees 8000 for a kilogram of processed beans. If the pods comply to the standards of the company, then funds are released to the KVFA and association takes the responsibility to distribute money among farmers.

Under this agreement, 1st consignment of vanilla pods was handed over to ELEPHANT HOUSE in January 2006

No. of  Farmers involved in the Vanilla out grower project  is approx. 2500 (Entire Central Province)

The background of the project:

Year 2004 was not a good one for the vanilla farmers in the world. Unexpected rains destroyed the crops and world vanilla prices went up drastically. ELEPHANT HOUSE, one of the major vanilla and vanilla derivative consumers in the country had to face the consequences of the disaster.

The Essence factory team developed a special method to extract vanilla pods, blended and standardized to replace the imported vanilla Oleoresin. The saving was enormous after the implementation of this method and this method of extraction and blending is unique to ELEPHANT HOUSE. Initially vanilla pods were imported but later pods were found locally. Eventually this became a CSR initiative that uplifted the lives of Sri Lankan vanilla farmers. Kandy Vanilla Farmers Association (KVFA) came to an agreement with ELEPHANT HOUSE to provide high quality vanilla pods in the future. Around 1000-1200 farmers supply their crop to ELEPHANT HOUSE. Through this association ELEPHANT HOUSE started purchasing local vanilla in year 2004.

Benefits of this agreement

  • Eliminate the market risk of price fluctuation: This is applicable to both parties involved in the agreement. ELEPHANT HOUSE receives the Vanilla pods required to produce Vanilla flavour with a nominal price and the farmers will have a guaranteed price for their produce.

  • Elimination of middle men: When the company has the direct access to the farmer communities, negotiations could be done on a win-win basis and can be streamlined the supplies chain to obtain the optimum profits to the company.

  • Import substitution: During the time when ELEPHANT HOUSE was totally depending on imported vanilla oleoresin, company had to pay about rupees 50000 for a kilogram of vanilla oleoresin (During the vanilla crop failure in 2004). Through this mechanism, the company and as a whole the country is benefited.

  • Farmers improve their knowledge and the quality of their produce: With the assistance of the KVFA, farmers get an opportunity to learn about best varieties of vanilla, Best fertilizer to be used, best harvesting practices, and post harvesting practices.

  • Improvement in rural economy: The production of agricultural goods directly adds to the GDP of the country. The money pumped to the farmer communities, help to uplift the livelihood of the farmers

  • Sum of the funds moved prior to year 2004 towards other countries is now distributed among the farmers in Sri Lanka who sweat to bring up the crop until harvested, uplifting the rural economy.

  • This increased income resulted in higher disposable income to uplift the living standards of farmers .

Impact to the farmer community and the improvements in their lives

Following amount of funds have been transferred to the farmers of Kandy district through KVFA during the following years in return of vanilla supplied to ELEPHANT HOUSE.

2005 2006 2007 2008 2009
Funds transferred to the
KVFA by ELEPHANT HOUSE (Rs)
505,500 1,016,647 5,698,000 4,992,000 3,630,000