Aline Gros

1
Ecuadorean Rose Industry

• Aline Gros
• Kasia Gluch
• Paolo Sini

2
Ecuador

• Ecuadors rose industry started 20 years ago and
  has been expanding rapidly
• The worlds fourth largest producer of roses
• Roses are the nations fifth export
• Customers all over the world

3
Basis of Ecuadors comparative adventage in the
production of roses

• Many rose farms are located in the Cayambe and
  Cotopaxi regions

• Intense sunlight
• Fertile volcanic soil
• Equatorial location
• High altitude

Cayambe 5790 m
Cotopaxi 5897 m
4
United States and Europe- main importers

• Who benefits?
• These countries can save on their purchase of
  rose and as a consequance they have more money
  available for spending on other goods and
  services
• Florists - the cheaply produced roses from
  Ecuador are selling for premium price, especially
  for special occasions like Valentines Day.
• Who loses?
• Producers of roses who have lost business in rose
  industry
• People who have lost their jobs in their own
  country

5
Comparative Advantage theory

• Theory
• According to Ricardos theory of comparative
  advantage , it make sense for a country to
  specialize in the production of those goods that
  it produces most efficiently and to buy goods
  that it produces less efficiently from other
  countries even if this means buying goods from
  other countries that it could produce more
  efficiently itself.
• Conclusion
• In this case, as Ricardos theory explains,
  Ecuadorian industry is more efficient than US or
  Europe rose industry so they should import this
  product and specialize them in another good.

6
Rose export industry

• Benefits for Ecuador
• Employment (it supports tens of thousands of
  jobs)
• The population has increased in 10 years from
  10,000 to 70,000
• The revenues and taxes from rose growers have
  helped to pave roads, build schools and construct
  sophisticated irrigation system
• Implication for the United States and Europe
• They have gained a strong advantage that
  discourages new firms to entry the market
• Unemployment

7
Developed nations answers

• Poor working conditions
• Child labor
• Workers' illness miscarriage, headaches,
  nausea, blurred vision and fatigue
• Developed nations answers
• They can press and ask Ecuadorean growers to find
  solution like the example of voluntary program
  (aimed at helping customers identifying
  responsible growers)
• Environmental groups have pushed for stronger
  sanctions

8
Conclusion the certification

• Advantage
• Growers has to respect some rules ( about
  workers health)
• Disadvantage
• When the customer is buying roses for Valentines
  day does he take care about working condition in
  Ecuador?

9
Thank you for your attention!