1.

0 Introduction

Figure 1: Vanilla planifolia

Vanilla, which is synonymous with flavoring food such as cakes and ice cream, is produced from

the fruit of a type of orchid originating from Mexico with the scientific name 'Vanilla Planifolia'

which has existed since 60 million years ago. The vanilla plant (Vanilla fragrans) is an

agricultural activity that receives little attention among farmers in Malaysia and we rarely hear

about it. Vanilla is a type of plant similar to the orchid family and is seen to have a very high

potential to be planted.

The potential price of vanilla in the global market currently reaches up to RM1,800 to

RM2,000.00 per kilogram and makes it one of the most suitable crops to increase the income of

farmers today. The high price of vanilla fruit makes it an advantage for this plant to be grown in

the country and it is a tropical plant that matches the weather in Malaysia. Oil palm

entrepreneurs who wish to increase their income are also trying to study vanilla cultivation as an

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alternative to increase their income following the drop in palm oil prices and the instability of

palm oil prices.

Vanilla needs a tropical climate with temperatures between 20 degrees Celsius and 30 degrees

Celsius and high humidity. This plant grows well in areas with rainfall between 1,500 and 3,000

mm per year. Vanilla is also suitable as an intercrop or integration with other plants such as

coconut and palm oil because vanilla needs only 30% to 50% shade from sunlight. Planting

under the shade of trees or using black netting that provides light protection is very suitable for

vanilla cultivation. Excessive sunlight penetration will cause the tree to dry and die. The size of

the vanilla tree is small; therefore it is suitable interspersed with palm oil or coconut plants. In oil

palm plantations that plant conventionally, which is a triangular pattern, it is still suitable to be

maintained there. If the cultivation can be carried out in a double avenue system, it is believed to

obtain better performance and to facilitate daily operations in the field because empty land has

been allocated for vanilla plants. However, this plant can also be cultivated singly like the black

pepper plant.

Vanilla grows optimally on fertile, loose soil that easily absorbs water. In addition, vanilla plants

need support poles or other trees as support because these plants grow upwards. Fertilization

(organic fertilizers) and periodic watering are important, especially during the dry season or

according to the degree of dryness of the soil. After the plant creeps, the pruning process (stress)

needs to be done so that it can produce flowers and fruit.

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Vanilla flowers usually bloom in the morning and they only last a day. Since that, pollination

should be carried out in the morning before 12 noon. Manual pollination can achieve a success

rate of around 95% while if relying on natural pollination, the success rate is only around 1%.

Planting vanilla must be preceded by the planting of passenger trees such as fertilizer trees

(Glyceridia) because these plants need support to live. Therefore, fertilizer trees can be planted 6

months before planting vanilla. Fertilizer trees are a good choice because they are able to grow

quickly and reach a height of 2-3 meters within 6 months. According to estimates, one acre of

palm oil plantation can be interspersed with 2,000 vanilla trees.

A mature vanilla tree can produce 6 kg of fruit. After drying, the fruit is able to produce 1.2 kg of

vanilla product according to the estimate of 5 kg of fresh vanilla converted to 1 kg of dry vanilla.

However, vanilla cultivation requires farm energy to carry out pruning of the fertilizer trees and

also vanilla plants. The height of vanilla is limited to 2 meters and the shoots have to be pruned

to produce more branches. The shoots are pruned to a length of 15 cm to foster growth and

produce more fruit.

To start planting vanilla, the fertilizer tree is planted 6 months earlier then just plant vanilla.

Vanilla seeds can be obtained from cuttings of healthy and vigorous parent trees. This stem

cutting is 1.5 meters long and contains 3 segments where the leaves at the bottom are cut and

then planted at a distance of 10-15 cm from the fertilizer tree. The top of the vanilla seedling

needs to be tied to the fertilizer tree. Generally, the breeds chosen to be planted are Vanilla

planifolia Andrew and V. Tahitensis J.W. Moore that suits the climate in Malaysia. To get a better

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performance, vanilla plants should be planted on a border 60 cm wide and 30 cm high, then the

fertilizer tree should be planted in the middle of the border. In terms of fertilization, the 15/15/15

compound fertilizer is sown at 1 kg/tree every 4 months. In the early stages of planting, foliar

fertilizer is used at a rate of 0.5kg/ha at a frequency of 2 weeks. When the tree approaches

fruiting, foliar fertilizer is stopped.

2.0 Potential of the Vanilla Crop

Vanilla is a type of plant from the Orchidaceae or orchid family. However, the only commercially

valuable vanilla species are Vanilla planifolia Andrews and Vanilla tahitensis JW Moore, which

are the most popular and widely cultivated species of Vanilla planifolia around the world.

First of all, the vanilla plant has great potential to develop the agricultural industry in Malaysia

considering the suitability of the climate and soil environment. Vanilla plants are suitable for

growing in Malaysia because the weather requirements of this plant between 25°C - 34°C are

very suitable for the surrounding conditions here. Additional requirements for high air humidity,

60% sun protection, soil pH between 6.5 - 7.5 and soil containing high organic matter can all be

found in Malaysia. In addition, vanilla plants also do not require a large area of land but can be

cultivated even on land that is only half an acre in area.

Second, vanilla plant seeds are easily obtained from mature parent trees. Usually seeds from 1.5

meter long cuttings are used. The lower part of the three segments is removed from the leaves

and poked into the plant hole. The part of the cutting that is above the surface of the ground is

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tied to the tree so that it can stick and climb. Once the tree reaches a height of 5 feet, it will be

strung down, up and down. Pruning can be done to get new branches to produce dense fruit.

Third, the fragrance of vanillin produced from the vanilla tree is in high demand and expensive

because it can be used in various formulations including confectionery, food, perfume, ice cream,

drinks and anything else that needs fragrance. The price of vanillin ranks second in the list of the

most expensive fragrance ingredients in the world, only after saffron. Below was the world price

of vanilla between 1998 and 2004 (Table 1). After 20 years, the price should rise higher and

higher.

Table 1 : World Price of Vanilla (1998 – 2004)

Fourth, the demand for vanilla from foreign countries is also increasing in line with its price.

This demand is driven by the high use of vanilla, especially in the food industry. According to a

Sinar Harian report on 17 March 2019, natural vanilla only meets around three percent of

demand in the world market, the rest is dominated by a mixture of extract, essence and artificial

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flavoring or synthetically produced vanilla flavoring. Therefore, demand from foreign countries

is very high, especially the United States, Singapore, Hong Kong, Cambodia, Germany, France

and the United Kingdom who come to buy directly from entrepreneurs.

Next, the fifth, the vanilla plant is a new plant that has not yet been widely cultivated in

Malaysia. For now, vanilla farm operators in Kubang Semang, Penang have made a name for

themselves when they succeeded in becoming the first digital vanilla farm in Malaysia. The farm

area cultivated is 2.43 hectares. This farm uses Agricultural Technology 4.0 covering material

technology (IoT), artificial intelligence (AI), flat force use, machine learning and drone systems.

IoT and AI elements are adapted in vanilla cultivation to be used as 'sensors' when the farm

absorbs the watering system that will act automatically if the weather conditions are found to be

too hot or the soil moisture is too dry. The use of machine learning and drones act to monitor soil

and environmental conditions that allow vanilla plants to grow more optimally compared to

traditional methods that require more attention. This success has been recognized by the

Malaysia Book of Records (MBOR) as the first smart vanilla farm in Malaysia.

The sixth potential is that the vanilla plant also receives support from the government and private

companies. Citing a Buletin Borneo report on 25 May 2021, the Ministry of Agriculture and

Fisheries is planning a strategy in an effort to make the vanilla cultivation industry in Sabah a

success. His ministry through the Rural Development Cooperative (KPD) has been actively

managing a plant nursery in Beaufort since 2007, which was also the first time the program was

introduced in Sabah. This kind of government support is able to spark the interest of new

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entrepreneurs to try vanilla plants which have high potential for commercialization. Also in

2010, Universiti Putra Malaysia (UPM) collaborated with the main vanilla producing company

in Malaysia, Vanilabiomatrix Sdn. Bhd. To conduct research to increase vanilla production up to

5,000 trees by 2010.

3.0 Cost (RM) of Production Involved for 1 Acre

The cost of production for 1 acre (0. 4 hectare) of vanilla fragrant in Malaysia is depends on how

it is practiced and varies from RM 30,000 to RM 35,000 in the initial year of planting (Kairos

Agriculture, 2020). These include cost of land preparation, planting materials including seeds or

planting materials, fertilizer, pesticide, labour and others. However, it is essential to note that

these costs can vary depending on various aspects of a project. Generally, 1 acre land are able to

be plant by 2,000 of vanilla.

Another information revealed by Kairos Agriculture, the first vanilla digital farm situated in

Kubang Semang, Pulau Pinang, that the costs may have risen somewhat where estimates point to

between RM 35,000 and RM 38,000 per acre for the first year. These may include increased cost

of inputs such as fertilizers, human resource and technology investment, whereby the country is

forced to pay its labor a reputable price. For vanilla plant companies, the cost is different for

conventional operators and operators who use technology. Farms that are cultivated

conventionally require higher labor costs because they are cultivated manually and require

intensive attention in the field to ensure that the condition of the trees is always awake. For

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technology farms, the cost of investment in technology is high but labor costs will be reduced

and it can be used in the long term.

Below are the normal distribution estimated cost involves in the vanilla planting project :

Item Conventional Digital farm

farm (RM) (RM)
Planting materials 6,000.00 6,000.00
Fertilizers 5,000.00 5,000.00
Pesticides and herbicides 3,000.00 3,000.00
Labour 10,000.00 6,000.00
Land preparation 10,000.00 10,000.00
Technology investment - 15,000.00
Miscellaneous costs 4,000.00 4,000.00
Total cost estimated 35,000.00 49,000.00

Table 2 : Estimated Cost Involves

The estimated cost will also vary among region like Sabah and Sarawak as compared to

Peninsular Malaysia due to the different in logistics cost including transportation and also rate of

labour cost. A study conducted by Haryanti (2021), also find out that an organization's size also

affects production costs because larger operations are more likely to result in cheaper costs for

commodities produced than smaller ones. Bigger farms may have more economies of scale,

which could result in cheaper costs per acre. However, extremely small-scale producers might

pay more per unit, though they might be able to offset this with improved practices.

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The highest cost spending will always be in the first year as a beginning cost because everything

is starts from zero. It is important to understand that, for the kind of cost being discussed here,

the first year of production is always the costliest when compared to the following years. This is

due to the fact that certain capital expenditures such as those for irrigation systems and land

preparation are not carried out again the following year. Plus, the first beginning year also the

farmers may spend some cost for research before starting the plantation project. According to

Ahmad et al. (2018), there is a chance that production costs can be lowered by 20–30%

beginning in the second year.

These costs are also influenced by assistance from the government and private companies that

work with the government. In addition to cost and financial assistance, also need to be taken into

account is assistance in terms of skills, techniques and courses related to cultivation. This is

because non-financial assistance also contributes to cost savings because entrepreneurs do not

need to spend capital to acquire new skills and knowledge about the vanilla plant. In addition to

the cost of planting, it is necessary to take into account the cost of care, marketing and so on.

With the help from the government and private companies, this matter is believed to be handled

well and effectively.

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4.0 Cost of Production (Inputs) Involved

Item Conventional farm

(RM)
Planting materials 6,000.00
Fertilizers 5,000.00
Pesticides and herbicides 3,000.00
Labour 10,000.00
Land preparation 10,000.00
Technology investment -
Miscellaneous costs 4,000.00
Total cost estimated 35,000.00

Table 3 : Estimated Cost of Production

i. Planting materials

The most crucial component of a vanilla plantation is planting materials. Vanilla is found to

be amenable to both sexual and asexual methods of propagation; thus, vanilla is propagated

by stem cuttings. Stem cuttings of one meter length or less can be used for planting; it is ideal

to have a minimum of 10–12 internodes in each cutting. Any part of the vine can be selected

for stem cutting, but vines of the current year's growth, which are in vegetative phase,

excluding the tender shoots at the tip, are most ideal.

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ii. Fertilizers

Every four months, 1 kg of 15/15/15 compound fertilizer is sown per tree. Every four

months, 2,000 kg of compound fertilizer are estimated to be applied to one acre. Foliar

fertilizer is applied in the early stages of planting at a rate of 0.5 kg/ha and every two weeks.

Foliar fertilization is discontinued as the tree gets closer to fruiting.

iii. Pesticides and herbicides

Production of vanilla must be managed effectively to prevent pests and diseases. Growers

may lessen the effects of pests and diseases on their crops and guarantee that premium vanilla

beans will always be available to consumers across the world by taking a proactive approach

that incorporates biological, chemical, and cultural control measures. Additionally, the

development of creative solutions to new pest and disease concerns within the vanilla

business depends heavily on continued study and collaboration. Cultural methods, chemical

control, biological control, and quarantine procedures are the four components of integrated

pest disease management systems for vanilla plantations.

iv. Labour

The cultivation and extraction of vanilla requires a great deal of labor. In addition to the

labor-intensive hand-pollination method, the beans also require meticulous hand-picking due

of their delicate vine. The eight-month growing season lasts from November to June.

v. Land preparation

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A neutral pH of 6.6 to 7.5 is the best range for the soil used to cultivate vanilla. It should

ideally have soil that is rich in organic matter and at a temperature of about 25°C. The vine

will grow more readily if a good humus base is added and renewed. Furthermore, the

fertilizer tree is planted six months before vanilla is planted in order to begin planting.

vi. Technology investment

When farmers utilize Agricultural Technology 4.0, which covers material technology (IoT),

artificial intelligence (AI), flat force use, machine learning, and drone systems, technological

investment costs arise when they plant vanilla. In vanilla farming, IoT and AI components

are modified to function as "sensors" when the farm detects the watering system, which will

take automatic action if the weather is determined to be excessively hot or the soil moisture

content is excessively low. In contrast to more labor-intensive traditional approaches, the use

of machine learning and drones monitors soil and environmental factors that allow vanilla

plants to grow more ideally.

vii. Miscellaneous costs

This category includes all little, specific costs that are essential to creating vanilla flavor. It

includes the costs associated with the tools and utensils used in farming operations, as well as

the expenses paid for input transportation and the production of horticultural crops.

According to Ahmad et al. (2018), the total of these little incidental expenses could wind up

becoming a significant portion of the production budget.

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5.0 Time taken to be Matured or Harvested

The valuable part of the vanilla plant is the fruit. The vanilla tree will only begin to bear fruit

after two years of planting. However, before fruiting, the flowers need to be pollinated manually.

Vanilla will flower after experiencing a short dry season. Generally, one bunch will have 15 - 20

flowers which after successful pollination, this quantity decreases to 10 16 flowers. After

pollination, it takes 8 months to become a mature fruit.

The beans or pods are ready for harvest around 6 to 9 months after flowering. The beans can be

considered as mature when they change from green to pale yellow. At this time, the pods may be

12 to 25 cm long. It is essential to harvest the pods at the right stage, as immature pods produce

an inferior product and overmature pods split during curing. The right picking stage is when the

distal end of the pod turns yellow and fine yellow streaks appear on the pods. Daily picking of

mature pods is essential. The pods can be harvested by cutting with a knife. Since the pollination

of flowers in a vanillery lasts three to four weeks, completion of harvesting of beans may also

take same time. The plants bear fruit of flowers only on the third or fourth year, with maximum

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yield after seven or eight years. The vines are abandoned at 10 to 12 years old when they are no

longer commercially productive. However, there are those who use fertilizer to cultivate it and

then collect the results as early as 6 months. This step is insufficient because the quality of the

fruit will also decrease.

6.0 Economic Implication of IRR and Payback Period

The level of establishment cost in vanilla plantation varied with small and large farms. According

to Journal of Plantation Crop, the cost incurred on planting materials in the large farms was

comparatively higher than that of the small farms. This may be due to a greater number of vines

planted per hectare in large farms. The labour cost for weeding, manuaring, silt application and

other cultural operations constituted the highest cost in the small farm than in the large farm.

The variable cost was more in both types of farms than the fixed cost. During the bearing period,

the cost incurred in pollination and harvesting accounted the highest share in the total variable

cost in both small and large farms because, the pollination in vanilla was done manually and is

labour intensive. In fixed cost, the amortized establishment cost was found high due to heavy

initial investment of vanilla. Again, the fixed cost per hectare in large farms was less than in

small farms and these results are in conformity with a study on the economics of vanilla

cultivation made earlier (Madan, 2004).

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Vanilla started yielding from third year onwards and yield levels stabilized from fifth year

onwards. Cultivation of vanilla as intercrop in plantation was found profitable. Hence,

appropriate combination of vanilla and perennial crop has to be encouraged. Each tree is able to

produce up to 6 kg of vanilla fruit according to the seed and management method. The fruit is

picked in stages according to the level of maturity. An acre of land can support 1,500 to 2,000

vanilla trees which on average can produce around 500 grams to 1 kilogram of green seeds every

year. For mature farms, the harvest can reach 500 to 800 kilograms per acre based on the solidity

of management. A kilogram of raw product is worth RM1,200 to RM2,500 depending on the

grade and the extract oil can reach up to RM80,000 per litre, making vanilla a very profitable

crop.

Since vanilla is one of the medium-term crops where the harvest can only be harvested around

the second and third year it is planted. Roughly speaking, it takes between the fifth and seventh

years for entrepreneurs to enjoy a return on capital and payback period. However, when the

results can be harvested, entrepreneurs will definitely generate a worthwhile profit considering

that it is one of the most expensive extracts and has high demand especially from foreign

countries such as Germany, the United States, Hong Kong, Japan and others.

It should be emphasized that these economic indicators are subject to change based on factors

such as market conditions, managerial effectiveness, and production scale. For instance, Nordin

et al. (2023) discovered that, as shown by the statistics on input costs and selling costs, those

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operations with a size of more than five acres have higher average IRRs. A higher economic

return on investment for vanilla fragrances is largely dependent on their high price on both the

home and international markets. In order to increase the economic viability of the vanilla crop,

the government can provide more support through a variety of incentives, such as policy

changes, subsidies, and other aids provided within the framework of the National Key Economic

Area (NKEA) program. Notwithstanding these encouraging developments in the chosen metrics,

one cannot ignore possible risks and variations in the economy. Variations in crop weather,

pestilence, illnesses, and market price swings can impact yields and prices, which in turn can

impact IRR and payback timeframes (Ruznan, 2023).

7.0 Challenges / Limitations

Even though vanilla is able to generate good income and has great potential in the global

economy, the challenges are still there. Although it can be cultivated on a small scale or

embroidery of other plants such as coconut and oil palm, but plant management is quite

challenging. Based on the study, there are three main aspects of vanilla cultivation challenges

which are the pollination process, the need for careful care and the market and price.

The vanilla pollination process is complicated since it needs to be done quickly and on time. In

addition, it also requires skilled labor and enough time to carry out manual pollination. For this

process, the commercial farms that are cultivated require a lot of labor because the pollination

process needs to be carried out within half a day after the trees produce flowers.

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Next is intensive care. Vanilla plants require close care because the soil conditions and

temperature need to be well maintained to ensure the appropriate humus and pH value so that the

plant can grow well. In addition, if the weather is hot and dry, poko needs to be watered to ensure

it is at the right humidity. Although the climate in Malaysia is suitable for vanilla plants, there are

times when hot weather strikes or continuous heavy rains result in plant care needing to be given

more attention. Careful care is important for vanilla plants to ensure the quality and quantity of

production meet market requirements.

In addition, vanilla prices can also fluctuate with the global commodity market and it depends on

demand. For vanilla entrepreneurs in Malaysia, the opportunity to penetrate the international

market and export the vanilla harvest is also a great challenge. This is because many countries

have begun to realize the potential of vanilla in the global market and are trying to

commercialize vanilla cultivation. Another four is Malaysia, which is located near Indonesia,

which is also one of the largest producers of vanilla after Madagascar.

In addition to the three aspects, challenges are also faced by entrepreneurs when the vanilla plant

industry is rare in Malaysia and the rate of enterprises is also still low. Therefore, the sharing of

technical and management aspects in the care of these plants at the internal level is very lacking.

Entrepreneurs need to work on their own and find their own initiative to learn various vanilla

plant management techniques and then the technical aspects of vanilla farm management. In

addition, new market opportunities also need to be explored more diligently to ensure that

product placement opportunities are guaranteed.

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8.0 Conclusion

The vanilla plant is a plant with high potential to venture into, especially for young and modern

farmers. This is because conventional vanilla farms are labor-intensive, but if the young people

are in the lead, surely it can be highlighted to use the concept of IR 4.0, which is a digital vanilla

farm where some care processes can be taken over by AI technology and so on. Vanilla is the

main plant that produces special extracts and is widely used in the food, medicine, cosmetics,

fragrance, tire, paint and cigarette industries. In accordance with its widespread use in various

industries, vanilla can bring good income to its operators. The demand for vanilla in the global

market is very high reaching 18,000 metric tons per year and the price can reach between

RM150 to RM300 per kilogram for the dried fruit in the international market (Metro Daily, 12

December 2007). In conclusion, by following the right way of cultivation, vanilla plants can

provide a very good income. In addition, vanilla plants can also provide alternative channels for

farmers to improve living standards.

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 References

Raffi A., Nordin F.A., Salim J.M. & Chin A.A. (2020). Vanilla montana Ridl.: A New Locality

Record In Peninsular Malaysia And Its Amended Description. Journal of Sustainability

Science and Management. Volume 15 Number 7

Bory, Severine, Grisoni, M., Duval, M. F., & Besse, P. (2008). Biodiversity and preservation of

vanilla: Present state of knowledge. Genetic Resources and Crop Evolution, 55(4), 551–

571. https://doi.org/10.1007/s10722- 007-9260-3

Cardone, L., Castronuovo, D., Perniola, M., Cicco, N., & Candido, V. (2020). Saffron (Crocus

sativus L.), the king of spices: An overview. Scientia Horticulturae, 272(February).

https://doi.org/10.1016/j. scienta.2020.109560

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Castro-Bobadilla, G., Martínez, A. J., Martínez, M. L., & García-Franco, J. G. (2011).

Application of located irrigation system to increase the retention of fruit of Vanilla

planifolia in the Totonacapan, Veracruz, México. Agrociencia, 45(3), 281–291.

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berpotensi-besar/

Kairos Agriculture; https://kairos.my/

Kerala Agricultural Univeristy, Centre for e-learning, http://www.celkau.in/crops/spices/

Vanilla/harvesting_and_processing.aspx

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