Rose Trade and the Environment

CASE NUMBER: 431
CASE MNEMONIC: ROSE
CASE NAME: Rose Trade and the Environment

Index

The Issue
Colombia versus U.S. Rose Growers
Positive and Negative Impact of NTAE Growth
A Glance at Colombia's Rose Trade Figures
The Rose Trade and Women
Related Cases
The Rose in History
Relevant Literature

I. IDENTIFICATION

1. The Issue

Few people would associate roses with conflict and drugs, but during the 1980s U.S. authorities frequently seized flower crates from Colombia that were filled with drugs. U.S. growers began to complain that their Colombian counterparts were receiving unfair subsidies from the narco-traffickers. The U.S. had encouraged the Colombian government to invest in flower production as a means of providing income, jobs, and more importantly, an alternative to drug cultivation and trade. Eventually, the U.S. government, in response to the increases in drug trafficking and U.S. grower's petition, charged Colombia with an import tax for its flowers. When drug trade slowed the U.S. reduced the tariffs, overtime this has led to increased debate between U.S. growers, flower importers, and Colombian flower exporters.

2. Description

Basically, this case study focuses on the present discussion between U.S. flower growers and importers and Colombian flower trade. Since Colombia exports a number of different variety of flowers, this case will concentrate on roses. Also the case will briefly discuss Non-Traditional Exports, such as roses, and give a special look at the effects of the rose trade on women.

Colombia versus U.S. Rose Growers

The dispute between Colombian flower exporters and U.S. flower producers has been around since the mid-1980s, and has been escalating ever since. In 1994, the U.S. Department of Commerce imposed anti-dumping levies averaging 33.87% on Colombian roses. Later that year the levies were reduced to 22.73%, but this ruling marked the fifth time U.S. growers had filed legal suits against Colombian exporters. At that time, Colombian exporters argued that the ruling severely damage the rose industry in Colombia, causing an estimated 90 companies out of business and losing about 50,000 jobs. Juan Maria Unda, President of the Colombian Association of Flower Exporters stated of the U.S. action "This is a typical protectionist attitude in favor of U.S. producers [Ambrus, 1994]." Many Colombians shared Unda's feeling, the ruling came to be viewed as hypocritical on the part of the U.S. government. Colombians argued that while the U.S. was urging Colombia to invest in agribusiness as a way of combating the drug trade, it set up barriers to alternative sources of income.

U.S. growers claimed that Colombian exports were jeopardizing their businesses because they were dumping their roses at unfair prices on the U.S. market, and were receiving special concessions. According to a report by the Floral Trade Commission the number of rose growers in the U.S. fell from 323 in 1971 to 213 in 1993 while foreign imports rose to 61.7% of the U.S. market from 0.2% in 1973 [Ambrus, 1994]. U.S. growers from across the country argued that the industry had declined because they could not compete with foreign imports.

The tariffs set by the 1994 resolution were eventually removed, thus enraging U.S. growers. U.S. growers are upset over a section of the Andean Trade Preferences Act that allows Bolivia, Colombia, Ecuador, and Peru to sell flowers duty-free to the U.S. as a way of helping these countries develop alternatives to cocaine production. At present, the countries listed above account for 75% of the $8 billion U.S. flower market [Lee, 1A]. U.S. growers argue that cheap blooms from Colombia are devastating their industry, and that Colombian authorities have not kept their part of the bargain. U.S. growers state that Colombia has done enough to combat the drug trade and cocoa crops in Colombia continue to flourish. According to William R. Carlson, executive director of the Floral Trade Council in Haslett, Michigan, "We've [U.S. growers] become the economic poster child for the damages of unfair trade practice. [Ortiz, 1997]"

California has been the hardest hit by competition. California is the largest flower producing state in the U.S., selling $300 million a year worth of flowers at the wholesale level. But an estimated 6%-10% of Californian flower growers go out of business every year, and the remaining farmers closely monitor Colombia's increasing presence in the market. Eugene Tsuji, whose family has been in the Californian flower industry for three generations, confirms this trend. Tsuji stated in March of 1997 that "Sales are off. It's really hard to compete with these guys. My neighborhood...walked away one day and said it wasn't worth it. It's not an uncommon story. [Ortiz, 1997]"

Rep. Tom Campbell, D-California, has drafted a resolution that would require Colombian flower growers to pay a 6% to 8% tariff when they export flowers to the U.S. Cambell's resolution now stands before the Ways and Means subcommittee, and it could be several months before it reaches the House floor. The resolution has come at a time when the White House is considering whether or not to revoke some or all of Colombia's trade preferences to show its continuing disapproval of Colombian President Ernesto Samper's governance. Samper's presidential campaign reportedly accepted $6 million in contributions from drug traffickers, but the Colombian Congress has twice before absolved the president of any wrongdoing. However, both supporters and opponents of Campbell's resolution agree that the real issue is not drugs but the 70% market share Colombian flowers have in the U.S. [Lee, 5A].

The Colombian government and the Colombian flower industry have persistently argued that protectionists attempts, such as Campbell's resolution, tariffs, and trade restrictions by the U.S. send a mixed message and hurt Colombia's economy. From their perspective, the U.S. is preaching for more liberal trade practices, while making it difficult to sell foreign products to U.S. markets. Since the flower industry has been an economic success in Colombia, Colombians worry that new regulations will cause irreparable damage to the industry, regulations may also be applied on other trading sectors, and finally, farmers could return to growing more drugs. Colombians also argue that it is a question of substitutability. The Floral Trade Council which has been in litigation with the U.S, over dumping stated recently that "while subject imports may have longer, thicker stems, larger blooms, more vibrant colors, domestic roses perform better because they are fresher [International Trade Reporter, 2]."

Rose importers, mainly based out of Miami, Florida also have a stake. Florida lawmakers point out that roses are the number one product imported through Miami, and are urging the Clinton administration not to punish Colombia for the sake of their import industry. In a letter to the U.S., Congress five Florida delegates reported that importing Colombian flowers provides 200,000 domestic jobs and does not hurt the U.S. growers. Importers believe the tariff will ultimately harm the entire industry because the tariff on imported flowers will push retail prices up and prompt consumers to buy other types of products. The most vocal opponent has been German Salazar, managing director of the Miami-based Colombia Flower Council. Salazar has stated that "This is a global industry today. It is not just Colombia and the United States [Ortiz, 1997]." Salazar has lent a sympathetic ear towards U.S. growers, but he argues that calling for a renewed tariff seems to be an act of revenge against Colombia for its success in the industry. Salazar has also expressed concern over the damage that could be done to Colombian growers, stating that "If exports go down...workers have to find another way to make a living, and unfortunately, we know what that is [Ortiz, 1997]."

Seedlings at Colombian rose farm.

Positive and Negative Impacts of NTAE Growth

The growth rate and value of Non-Traditional Agricultural Exports (NTAEs) has grown steadily in Latin America and the Caribbean since 1980, reaching approximately $430 million in 1991. As export values have risen, so to have the number of businesses involved in producing, processing, marketing, and distributing NTAEs. Throughout Latin America, this includes both foreign and national companies, ranging from new micro-enterprises to immense transnational firms. The increases in foreign capital resulting from the trade in NTAEs has been notable. The NTAE industry has also spawned indirect investment in infrastructure, such as transport, packaging and marketing services, and processing plants.

Colombia has been one of the pioneers in NTAE trade, and has concentrated mainly on the production of cut flowers. For a concise look at Colombia's flower export industry please see table below.

A Glance at Colombia's Rose Trade Figures
Income from flower exports	US$ 315 million (1992)
Number of Companies	250 Plus 80 smaller companies
Total number of nurseries	400
Average nursery size	8 hectares
Acreage used for rose production (1990)	3914 ha Expected growth in 1991 - 5%
Rose production (1990)	102,000 tons 85% of this harvest was exported Production has gone up 35% since 1988.
Main rose producing areas	Bogota 87% Medellin 7% Cali 3%

Growers are organized in two flower export organizations, Asolco flowers (mainly made of the larger companies) and Fedeflores (small and medium growers, mostly Colombians) [World Supply Centers, 1]. In Colombia, flower production involves an average of 200 person-days per hectare, compared to 150 person days per hectare for potato production, 44 for coffee, and 33 for bananas, Colombia's traditional export crops. The Colombian flower industry employs an estimated 80,000 workers and accounts for at least 50,000 jobs in new indirect industries, such as packaging and transport [Thrupp, 85]. Moreover, there is an that investment in this sector reduces the production and trafficking of illegal drugs. With these types of results it is no wonder that the Colombian government and Colombian businesses are continually proposing plans for the expansion of this sector. Today, Colombia is the world's second largest exporter with a 10% share of the world's cut flowers exports.

Although NTAEs have economic benefits, there are several ecological and social costs to their growth. The most obvious ecological cost is the encroachment on forests to clear land for rose cultivation and deterioration of bio-diversity. Yet, the use of environmentally unsafe pesticides is of major concern. In Colombia, highly toxic nematicides such as aldicarb and fenamifos are heavily used in rose production. The use of these chemicals is having an impact on the delicate eco-system, the crops harvested by farmers around rose growing farms, and a detrimental health effect on rose industry workers.

Greenhouses on Rose Farm in Colombia.

A workers' health commission report states that the use of pesticides harms the entire population of Bogota because rivers are polluted, leading to the contamination of vegetables, cow's milk and a broad range of other products. A quarter of all pesticides imported by Colombia from the United States are not registered for use in their country of origin. Some are not registered because they are illegal. Others have not been submitted for registration in order to avoid meeting costly registration rules, according to Elsa Nivia, an agronomist with the Pesticide Action Network in Palmira [Ferrer, 3]. A study of a population of 8.867 workers on Colombian flower plantations near Bogota showed that they were exposed to 127 different pesticides, three of which the World Health Organization has considered to be extremely toxic. An estimated 20% of the pesticides used are banned or not registered in the U.K. or the U.S. because they have been found to have carcinogenic effects and extreme toxicity. Nearly two-thirds of Colombian flower workers suffer from headaches, nausea, impaired vision, conjunctivitis, rashes, asthma, still births, miscarriages, congenital malformations, and respiratory and neurological problems that can be attributed to the use of these chemicals. [Thrupp, 110]. Yet, products produced under these conditions continue to be exported and purchased by flower companies worldwide.

The Rose Trade and Women

In Colombia, 80% of the 80,000 workers in the flower industry are women [Thrupp, 91]. When asked why employment rates for women were so high for women in this sector, many plantation managers responded that women are better skilled at intricate tasks, such as pruning, harvesting, sorting, selecting, and packaging, that require manual dexterity. Working in the rose industry requires long hours at low wages in hot greenhouses, exposure to pesticides and in too many cases violations of labor rights.

Mercedes Posada is a 37 year old worker who has worked on rose farms since she was 14. She works an 18-hour day that begins at 3:45 a.m. when she prepares breakfast and lunch for her three-year old son and does the housework. By 6:00 a.m. she has left her son with her mother and has boarded a train that takes an hour and a half to get to her job in Agrodex. Posada works four days a week at Agrodex, where she cuts, cleans, classifies and packs flowers for export. "It's heavy and exhausting work. You have to walk kilometers cutting flowers and carrying them to the selection site. Later, you go home and keep working. The workers complain of headaches. Some blame it on the sun that pounds down on them all day, but others say it is because of the chemical products, the fertilizers and pesticides, that are used in the growing process. I suffer from pain in my hands. It would seem to be rheumatism. We use rubber gloves that we later have to take off in the refrigerated rooms, and these temperature changes affect me. But social security doesn't recognize these health problems as work-related illnesses," Posada explains [Ferrer, 1].

The large majority of women working in the industry are 15 to 28 years old and there has been a noticeable trend to firing women older than 35. Posada is a member of the executive committee of the Confederation of Democratic Workers of Colombia, the second largest union federation in the country. This group is focused on securing a just settlement for 70 out of 74 employees sacked by the company where Posada works [Ferrer, 2]. The company claimed it had financial troubles, but new workers were later hired under contracts that do not include social benefits.

A report by the First Forum on the Impact of the Flower Industry indicates that at harvest time, pregnant women are forced to work extra hours under the threat of losing their jobs, although local labor laws specifically prohibit such practices [Ferrer, 2]. Women also suffer sexual harassment, which they are often forced to put up with to keep their jobs, which are of crucial importance for the 12.8 percent of the women who, like Posada, are single mothers [Ferrer, 2]. Four out of five of the households that depend on the flower industry are headed by women [Ferrer, 2].

According to researchers at Cactus, a local environmental group, no studies have been conducted in Colombia on the long-term health effects of products used in the flower industry. Studies carried out in The Netherlands indicate that some chemicals may cause long-term damage to the central nervous system, which could provoke headaches and pain in the hands. "Flowers are very beautiful, but they are a health hazard. Behind every flower there is death," says a flower worker who was interviewed in Love, Women and Flowers, a recent award-winning documentary made in The Netherlands [Ferrer, 2].

Although Colombian legislation sets occupational health standards, women working in the flower-growing sector remain at risk. The most frequent medical visits by women are due to headaches, nausea, cramps and fainting caused by the high temperatures in the greenhouses, and infections caused by fungi and bacteria that thrive in the humid setting. There are also cases of toxicity and respiratory problems, as well as skin and finger nail infections caused by pesticides. According to Christian Aid, a British non-governmental organization, doctors in the flower producing regions report up to five cases of acute poisoning a day [Ferrer, 2].

The situation of the sector's workers has motivated Colombian environmentalists and Swiss and German NGOs to take action. These groups were successful in getting the Swiss company Ciba Geigy and German company AgrEvo to withdraw several products that the World Health Organization has categorized as some of the most highly toxic products. Ciba Geigy withdrew Phosphamidos, DDVP and Dicrotophos, and AgrEvo, the Colombian flower industry's main supplier, withdrew the insecticide Thiodan, which had been prohibited in Germany since 1991 [Ferrer, 3]. Earlier this year a campaign was initiated to push the adoption of a quality stamp, to ensure that Colombian flowers are produced under adequate working conditions, and that workers' rights are respected. Campaign coordinator Frank Bassel said that during an April visit to Colombia he found evidence that trade unions are repressed. He also found "difficult working conditions, and health and environmental risks caused by the massive use of pesticides [Ferrer, 3]"

3. Related Cases:

BOLCOCA.HTM
BULB.HTM
COCA.HTM
COLCOCA.HTM
COLOMOIL.HTM
FLOWER.HTM
PERUCOCA

Keyword Clusters

(1) Trade Product: AGRIculture
(2) Bio-geography: TROPical
(3) Environmental Problem: HABITat Loss

4. Draft Author: Julissa Castellanos Date: June 29, 1997

II. LEGAL Clusters

5. Discourse and Status: DISagreement and INPROgress

6. Forum and Scope: COLOmbia and MULTIlateral

7. Decision Breadth: 2 (Colombia and USA)

8. Legal Standing: LAW

III. GEOGRAPHIC Clusters

9. Geographic Locations

a. Geographic Domain: South America [SAMER]

b. Geographic Site: Northern South America [NSAMER]

c. Geographic Impact: COLOMbia

10. Sub-National Factors: YES

In Colombia, foreign investment and economic growth will slow down, and many jobs will be lost. In the U.S., producers in states such as California, Texas, Michigan, Ohio, New York, Virginia, and Colorado stand to benefit, but importers, mostly located in Miami, Florida, will incur a loss both in income and jobs.

11. Type of Habitat: TROPical

IV. TRADE Clusters

12. Type of Measure: Import Tax [IMTAX]

13. Direct vs. Indirect Impacts: DIR and IND

The decision made concerning this case will affect both the Colombian and U.S. rose producers, exporters, and importers. The decision will also have an indirect impact for workers, adversely in loss of jobs, but there will also be an improvement in terms of environmental degradation.

14. Relation of Measure to Environmental Impact

a. Directly Related: YES FLOWER

b. Indirectly Related: YES DRUG

c. Not Related: NO

d. Process Related: YES HABIT

15. Trade Product Identification: ROSES

16. Economic Data: Colombia has been one of the pioneers in NTAE trade, and has concentrated mainly on the production of cut flowers. In 1992, flowers exports amounted to $315 million.

17. Degree of Competitive Impact: LOW

18. Industry Sector: AGRICULTURE

19. Exporter and Importer

a. Case Exporter: COLOmbia

b. Case Importer: USA

c. Leading Exporters (US$): Colombia, $315 million

d. Leading Importers (US$): U.S., $13 billion

V. ENVIRONMENT Clusters

20. Environmental Problem Type: HABITAT LOSS

21. Species Information

The Rose in History

Today, the rose is synonymous with love and affection. Every Valentine's Day and Mother's Day people flock to florist shops to purchase roses for their beloved. But the rose has a long history, and not just as being a token of affection. The rose has served as a symbol for heroism, a medicinal plant, and a favorite sign for heraldry.