Bracing for the Vanilla Boom
sapiens.org
sapiens.org
The Malagasy vanilla farmers behavior in the face of a windfall is not that different from many Americans actions in similar circumstances from what I've seen. People with a sudden access of money will often splurge on bizarre displays of wealth, sports cars and motorcycles, fancy clothing they rarely wear; etc. Often not because they have a long-held desire for the toys they are buying but because they have a cultural template of what wealth and success should look like that they are trying to act out.
It's astounding that many people still aren't self-aware enough to realize this and take appropriate action when they gain a lot of wealth. Seems like common and easily accessible knowledge at this point. I suspect it's a form of evolutionary wealth redistribution that's built in to the human genome.
Who says they're not self-aware?
The article explicitly mentions it's unsafe to take the large amounts of cash traveling, which it notes "are usually a day’s trek away". It's not uncommon for developing-world banks to be untrustworthy, as well.
Spending it instead of having it stolen or being murdered for it might be the right approach here.
Let alone that stealing stuff might not be as convenient as cash, but still desirable...
The vanilla trade often takes advantage of the people living in vulnerable communities and doesn't pay a living wage. If we all want ethical access to quality vanilla, we need to start asking buyers to start sourcing certified fair trade (or better) vanilla, and to work to improve the fair trade system.
How will that help if the problem is gangs?
I would assume the most gang members in Madagascar are making even less.
If the farmers themself are not demanding so much money, then who is? Someone is artificially restricting supply, or inflating prices.
Wonder how long it will go on before it crashes....
The more interesting bit is that farmers are not directly setting the price they will be paid. There’s clearly a huge information assymetry, so the pricing is necessarily going to be dictated by the purchasers.
Given that all of the purchasers know the same thing, they will know approximately what the actual market price will be. Before they have talked to any farmers. They don’t need to talk to any other purchasers. They have all of the required information. So when the legal market period starts all of the purchasers will arrive knowing what a reasonable price will be this season.
From a farmers point of view though, what happens is this:
* You take your beans to the market
* you are offered money for the beans. Sometimes you are offered 100 times as much. You have no idea why.
If anyone was gaming the market on this level, they would be giving fewer proceeds to the uninformed farmer, not more.
I think someone did this with a large portion (several tenths) of the [European?] cocoa bean supply.
https://en.m.wikipedia.org/wiki/Silver_Thursday
Silver Thursday was an event that occurred in the United States in the silver commodity markets on Thursday, March 27, 1980, following the Hunt brothers' attempt at cornering the silver market. A subsequent steep fall in silver prices led to panic on commodity and futures exchanges.
Porsche makes more VW stock available to desperate short-sellers
https://www.theguardian.com/business/2008/oct/29/vw-volkswag...
http://web.pdx.edu/~jjackson/HuntSilver.html is a useful synopsis.
But does it require a bank account (which was my main concern)? Per http://www.afd.fr/en/developing-mobile-banking-madagascar only 5% of Malagasy had access to a bank account in 2014.
The question is how you move physical currency out of a payment system, if you don't have actual access to a bank. Essentially if you have "money" in any kind of non-cashable form you can't use it to buy anything. So being paid electronically in an environment where most people you interact with only accept cash/goods is essentially the same as not having money.
The ability to put money into any kind of electronic payment system is, if anything, less important than the ability to withdraw it, especially if you're in an environment that is still dominated by cash payments.
One factor not mentioned in the article is the increased demand from industrial users. Food processors having been trying to replace artificial flavors with natural, and there isn't enough vanilla to go around. Global production is actually quite small, compared to say coffee or chocolate. And it seems unnecessary. Synthetic vanillin is identical to real vanillin. Admittedly, it lacks the additional secondary flavor chemicals that make real vanilla tastier, but does that really matter to Jell-O pudding?
I do wonder if some of the big asset purchases (the motorbike example) are also to act as a non-bank money store? Much easier to lock up a bike than a pile of money, etc.
I think the entire thing was interesting and could have stood on its own, but maybe that conceit provided a thread to tie the article together?
Also, in response to the M-Pesa comment, I did a quick googling, and it looks like as of 2014 only 5% of Malagasy had a bank account at all.
Guns are easy to sell, but you don’t want to sell them. They hold their value but you’re emotionally invested just enough not trade them unless you have a true need.
It’s an informal banking system, complete with unwritten rules about how you should offer a gun back to the person you bought it from before selling it yourself.
This is (in part) an example of how that thinking breaks down as that assumption breaks down.
If enough people cannot have private property, can the market function as desired by those who believe in it?
Also, I hope the prices of the real stuff goes down, at least for a few months.
Just remembered, it was a food lab article:
https://sweets.seriouseats.com/2013/12/taste-test-is-better-...
Food lab is my go to for food related articles interesting details behind the science and process of cooking.
https://www.amazon.com/McCormick-Natural-Vanilla-Extract-Glu...
The synthetic smelled and tasted like vanilla-flavored motor oil and rubbing alcohol. It was terrible, and cheap, and plentiful. I can't imagine what I could use it in to mask that chemical flavor. Ugh.
Flour, on the other hand, varies greatly in its end result based on the genetic variant, grade quality, and milling, in combination with amount of water and the mechanical process of mixing. You can determine the effect on the cake by looking at the type and grade of flour, along with its moisture content. I wouldn't advise eating it.
The vanilla is going to interact with hundreds of volatile compounds during cooking while going through chemical changes. These things change the overall flavor. There's so many different things that can change how the end flavor comes through. Time and time again, it's been shown that the real vs fake vanilla thing doesn't matter for more complex foods (read: baked goods where maillard reactions are going to be common and the volatile aromatics present in real vanilla get destroyed)
{1}https://www.epicurious.com/expert-advice/real-vanilla-extrac... {2}https://www.cooksillustrated.com/taste_tests/455-vanilla-ext...
From- a reformed professional chef.
Though I do feel a bit sorry for the chameleon. It probably wasn't too impressed.