TED Case Studies



 

I. Identification

1. The Issue

As with many of the products Americans buy and consume, the story behind the production of the roses we buy is most often unknown by the average American consumer. When holidays, such as Valentine's Day, Mother's Day, and Secretary's Day, arrive, we frantically run to the nearest florist and buy our loved ones a bouquet of flowers as a symbol of affection, not ever stopping to think about where they came from or whether they were grown organically or not. What most don't realize is that an increasing amount of the roses and other cut flowers we buy have been imported from developing countries, where they were grown under unsafe conditions, both for the environment and for those who work in the greenhouses. American pesticide producers are exporting pesticides everyday that fail to meet regulation standards set by American agencies. For the rose industry in Ecuador, America's blindness as the consumer and lack of responsibility as a "leader" in the world, has been taking its toll.
2. Description
Throughout history and across the globe, roses have been appreciated not only for their esthetic value but also their role in cultural traditions of various societies. The ancient Greeks crowned their heroes of battle with crowns of leaves and branches adorned with roses and other delicate flowers. For the Greeks, the power of the rose went beyond its inherent beauty and took on a medicinal value. They used the peddles in certain ointments and aroma therapy. The English continued this belief in the rose's medicinal value by incorporating recipes and remedies as essentials in the lives of all respectable English households. In fact, all households of distinction had a rose-still in the kitchen and made rose-water used in the different recipes and for certain medicinal purposes. By the nineteenth century rose cultivation had become an art form. People prized their rose gardens, making them into brilliant displays of alluring creations that attracted the romantics. New varieties were explored and rose cultivation began to expand. The international market was introduced to the rose and its many varieties.

In the 1960s and 70s, the Netherlands rose to overwhelming dominance in the world of cut flowers, but more specifically, roses. Its European neighbors were slowly eliminated as competitors in rose production and were transformed into consumers. Today, one out of every five commercially grown roses is grown in Holland, but the market has been expanding to the South, including many countries in Asia, such as Thailand and Malaysia, Africa, such as Zambia, Tanzania, and Mauritius, and in South America, such as Colombia, Ecuador and Peru. For the Third World, roses have been treated by international market analysts and development experts as the "miracle crop" (Majaraj and Dorren).

Flowers are not a product for small farmers and it is becoming increasingly limited to large producers. The industry has become extremely fast-paced, capital-intensive and vulnerable, requiring a high capital, technology and management level. The South provides the industry with the ideal conditions necessary for successful production returns. Geographically they offer the correct temperature and space to produce large quantities of roses. In the industry, it is the easy supply of international capital in combination with rock bottom prices for labour which provide the conditions to make the business flourish.

The cut flower industry, including roses, is the latest export crop. The "miracle crop" creates unhealthy employment at only the lowest wages. In addition, the flower businesses are predominantly run by foreign ownership, which creates a questionable basis for these developing countries to earn the hard currency dictated by structural adjustment conditions. Yet, "given the multiple pressures of conventional economic wisdom, debt repayment and the low prices for traditional agricultural export crops, it is hard to avoid the conclusion that the only path to redemption is through the rose garden." (Majaraj and Dorren)

The flower industry in Ecuador has grown significantly within the last decade. The Andean Trade Preference Act (ATPA) passed in 1991 removed trade barriers from drug producing countries, such as Ecuador and has enabled Ecuador's flower trade to take off in the world market. According to COLEACP, a document distributed at Floriculture Seminar Trinidad and Tobago in 1994, Ecuador was ranked number ten in the world in cut flower exports in 1992. As indicated in Table 1, in 1993, Ecuador exported 38,058,000 USD in cut flowers, 22,446,000 USD of which from roses. In 1997, Ecuador exported 131,010,000 USD in cut flowers. Ecuador's export plantings now total more than 2,000 hectares, or about 5,000 acres (5). This growth is partly due to the more efficient harvesting techniques on the plantations and the ideal climate of the highland region surrounding Quito, but it is largely the result of the absence of pesticide regulations that has separated Ecuador's market from that of other markets that have been more encouraged to follow such regulations.

Table 1

Cut Flower Exports

 
Year  (.000 US$ FOB) 
1985 526
1986 1.706
1987 3.566
1988 4.102
1989 9.225
1990 13.598
1991 19.25
1992 24.221
1993 3.8058
1994 59.164
1995 84.325
1996 104.806
1997 131.01
 

About 60 varieties of roses are commercially grown in Ecuador, including red varieties, yellow varieties, purple-colored Ravel and pink-blossomed Anna Nubia and others. Cut roses are bundles into bunches of 25 stems and packed 10 bunches to a box for shipping. These are then transported to the airport where there is refrigerated storage provided and they are off to their importing countries.

The United States is Ecuador's main trade partner, accounting for 46% of Ecuador's exports in 1997 and the origin of 33% of goods imported to Ecuador (16). One plantation is Ecuador ships 62% of its cut flowers to the United States alone (McLaughlin). The Andean Trade Preference Act allows Ecuadorian products, with the exception of textiles, canned tuna, flat leather articles and rum, to enter American markets free of tariffs through the year 2001. The US is the number one importer of Ecuador's roses. In 1997, the US imported 51.7 million USD in roses from Ecuador, nearly 45% of the total cut flower exports from Ecuador that year. In imports from Ecuador, the US is followed by Canada, Germany, Holland, Austria, Chile, France, Hong Kong, Italy, Spain, Sweden, and Switzerland.

Flower growing is a very fragile business. Despite the perfect condition of the product when it leaves the plantation, it could be valueless when it arrives to even the first stage of shipping if the necessary details are not paid attention to. If there is a slight delay in flight times, the product may be ruined by the time it arrives to its destination. Large sums of money can be lost quickly in this business because it is such a fast-paced trade. In order to compensate for these factors, growers have to keep their costs extremely low.

Rose producers in Ecuador use an average of six fungicides, four insecticides, and three nematicides (nematode poisons), along with several herbicides. Many of these compounds are applied frequently in order to chemically "sanitize" the greenhouses [World Resources Institute]. Some of the toxic insecticides and nematicides, including methyl parathion, terbufos, and aldicarb are restricted heavily in the United States because of the health hazard they pose [World Resource Institute]. These are not the only chemicals used that pose health threats. There exists a wide array of other pesticides with know health risks. Some fungicides used, such as mancozeb and captan are suspected carcinogens, and such herbicides as paraquat, is extremely toxic through any route of exposure, whether absorbed through the skin, inhaled, or somehow ingested. [World Resource Institute]These chemicals alone are dangerous enough, but when coupled with the method of usage and the conditions in which they are utilized, their danger is multiplied. Many of these substances are applied daily in warm, poorly ventilated greenhouses, where high levels of toxic vapors can accumulate and where contact to these pesticide residues is close to impossible to avoid by workers [World Resource Institute].

The labor force of the rose industry in Ecuador is dominated by women, who often make up nearly 80% on any given plantation. This puts women particularly subject to pesticide poisoning. Many women have reported health problems ranging from headaches, blurred vision, intolerance to light and nausea to more serious problems, such as experiencing still births, sterility and birth to children with abnormalities and defects. These problems do not include the intrusion of the industry on the personal lives of the female workers who are forced into the position of working long, rigorous hours in the green houses in additions to making sure the needs of the household and family are met. The extremely low wages they receive for their labor are hardly adequate for providing these women and their families with quality living conditions and proper nutrition, let alone sufficient medical attention if someone was to become ill.

According to the World Resource Institute, a study of 80 women working on flower plantations in Ecuador revealed heavy exposure to organophosphates and carbamates, two classes of pesticides well known for their toxicity. The women were expected to continue their tasks while pesticides were being applied. The majority of the women who participated in this study received little or no training or information on the proper pesticide use and the need for safety equipment. Some 40% of the workers had received no protective equipment, and the rest only occasionally received gloves, boots, and glasses. The few times when they were given equipment, it was inadequate or poorly maintained.

The effects of the pesticides are felt even further, extending to the livestock in the surrounding fields. Pesticides and fungicides are chemicals designed to kill life forms that have been proven to prevent agriculture products from reaching a certain level of perfection that the market requires. Environmental problems arise when run off from fumigation of flowers with these chemicals is not properly treated. Not only endangers the lives of the people who live in these hills by simple inhalation of the fumes and ingestion through their contaminated water sources, but also through their food sources. The entire eco-system of the region is affected by the use of these chemicals and the careless disposing of them. In the hills surrounding the greenhouses where flowers are grown, cattle belonging to the local peasants roam freely. These animals are a source of income as well as a source of food for many of the peasants and when the cattle are becoming ill from the poisonous toxins they are consuming, the same is likely to occur for the peasants who depend on these cattle for their food supply. In addition, the same water is used in the vegetable gardens of which the peasants depend on for food also. For a region that was once dominated by agriculture and cattle ranching, this is a very heavy burden.

Many believe that although the flower industry has grown and become quite lucrative over the past few decades, the market is very unstable. The flower industry is very susceptable to changes in demand in the North. Any slight changes in temperature in the North could mean a drastic drop in demand from Europe and North America. Seasonability is a key factor in demand for Third World flower producing countries. Flowers are largely in demand from tropical countries during the winter months in the North, when their production costs are very high, but during the summer months for the North, local producers are able to fulfill the demand. It is a market determined almost exclusively by current consumerist culture. The market is analyzed and then the growers are instructed what to grow and how to grow it. Besides the more widely celebrated holidays, such as Christmas, Easter and Valentine's day, when producers know in advance what varieties and colors are needed, there are the one-off events that demand unusual colors. Growers have to be very knowledgeable and be constantly communicating with their buyers in the North. In addition, roses, and most cut flowers, are a symbol of wealth. They are luxury products and are bought only by a limited percentage of the population. In most countries, luxury products, such as roses, are not on the list of top priorities of products to import. Flowers are traditionally purchased for special occasions, such as weddings and Mother's Day. Right now, supply is rising faster than demand. One veteran flower-marketer from Kenya stated that, "Flowers are being overdone. The market is becoming saturated" (21).

3. Related Cases
MEXPEST.HTM

COSTPEST.HTM

4.  Draft Author:  Laura Holt,  April, 2000

II.  Legal Clusters

5.  Discourse and Status:

6.  Forum and Scope:

7.  Decision Breadth:

8.  Legal Standing:

III.  Geographic Clusters

9.  Geographic Locations

a. Geographic Domain:
b. Geographic Site:
c. Geographic Impact:

10.  Sub-National Factors:

11.  Type of Habitat:

IV. Trade Clusters

12.  Type of Measure:

13.  Direct v. Indirect Impacts:

14.  Relation of Trade to Measure to Environmental Impact

a. Directly Related to Product:
b. Indirectly Related to Product:
c. Not Related to Product:
d. Related to Process:

15.  Trade Product Identification:

16.  Economic Data:

17.  Imact of Trade Restriction:

18.  Industry Sector:

19.  Exporters and Importers:

V.  Environmental Clusters

20.  Environmental Problem Type:

21.  Name, Type, and Diversity of Species:

Name:

Type:

Diversity:

22.  Resource Impact and Effect:

23.  Urgency and Lifetime:

24.  Substitutes:

VI.  Other Factors

25.  Culture:

26. Trans-Boundary Issues:

27.  Rights:

28.  Relevant Literature: