The Ecuadorean Rose Industry

1. What is the basis of Ecuador´s comparative advantage in the production of roses?

Ecuador and especially the regions of Cayambe and Cotopaxi offer perfect growing
conditions for roses with huge heads and up to ten different types of red, due to the
combination of intense sunlight, fertile volcanic soil, the equatorial location, and the
high altitude. These conditions enable the roses to flower almost year-round. In
addition to that, other comparative advantages might be cheap labor and their
harvesting knowledge.

2. Most Ecuadorean roses are sold in the United States or Europe. Who in these
countries benefits from the importation of Ecuadorean roses, and how do they benefit?
Who loses? Do you think the benefits outweigh the costs?

Who benefits?The customers are benefitting from the importation of roses since they
get flowers of the same or even better quality for lower prices since the wages in
Ecuador are lower than they would be in the US or in Europe. I also think that shops
selling flowers and offering services, like putting together bouquets, will probably sell
the roses for much higher prices than they had to pay.
Who loses? Even if the workers are paid an average wage for their work and are
provided with health insurance, they will probably be the ones suffering in the future.
They work regularly with a dangerous mixture of chemicals, like for example pesticides,
without having the right equipment or protection provided to them. According to the
International Labour Organization, this leads to quite severe health problems, which in
response results in a lot of critic from all over the world. This critic will force Ecuador
to take actions if they don’t want to lose customers.
Do benefits outweigh the costs? Buying or selling luxury products for low prices never
outweigh putting other people's health in danger.

3. How does the rose export industry benefit Ecuador? Do these benefits have any
implications for the United States and Europe?

The rose export contributes to Ecuador’s economic stability. With its 460 rose farms,
Ecuador became the fourth biggest producer of roses and the industry is expanding
rapidly ever since its beginning 20 years ago. Exporting the flowers to countries
worldwide makes roses the country’s fifth largest export product.
The farms are generating $240 million in sales and with the revenues of these
industries’ taxes, the government is able to pave roads, build schools and construct
irrigation systems. Furthermore, the rose industry created 50.000 jobs and helped to
increase Cayambe’s population from 10.000 to 70.000 within only ten years. The farms
are providing health care and pensions for their employees as well as paying fair
wages. All of this helped to support a social revolution in which women are able to
finance for example the schooling of their children.

The more roses are sold in Ecuador, the more the government can invest in the
countries and populations development. That might make Ecuador more competitive
what can result in higher prices for flowers in the US and in Europe in the future.
4. How should developed nations respond to reports of poor working conditions in this
industry? Should importers in some way certify Ecuadorean producers, only importing
from those who adhere to strict labor and environmental standards?

I agree with the fact that developed nations should be fighting for better labor
conditions all over the world. If nothing can be achieved in a formal way, unfair
employers should be boycotted until they sufficiently care for their workers. I like the
idea of certificating farms that provide everything to create a safe working environment
since it would mean customers don’t have to live completely without the products but
farms would be motivated to apply to necessary changes in their industry as soon as
possible.