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 Romans thought nothing of carpeting their banquet halls with rose petals, and it is said that Cleopatra once received her beloved Marc Antony in a room literally filled knee-deep in rose petals.  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.  Today, there are more than 30,000 varieties of roses and no other flower has as complicated of a family tree.

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 labor 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)  Flowers are emerging as a stable and very marketable international crop, earning up to five times per acre what fruit crops bring in.

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. 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 bundled 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. 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. The quest for the perfect rose is a complicated process.  It takes from 45 to 57 days to produce a market-quality rose in a greehouse, depending on the variety, time of year, and especially the light conditions.  Sunlight is one of the rose grower's best friends since roses need an ample supply of sunlight to bloom properly.  This has played a key role in the success of the flower industry in the tropical South where it is temperate and sunny year round.  It puts growers in the South at a natural advantage, because they don't have to invest in heating systems nor lighting systems for the greenhouses during the winter months.  A rose bush that is planted in a greenhouse is grown 365 days of the year and is generally kept in production for 5-7 years before being replaced.  These plants, cycling on a 6-8 week schedule, produce about six crops per year, whereas rose plants used to only bloom once a year [Roses Incorporated].

Today's roses are the result of centuries of genetic reshuffling, the work of both nature and man.  Rose hydridizers have been able to combine and recombine genes for constant improvement.  The results have been new colors, forms, textures, and fragrances, more vigor and disease resistance.  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.

To meet the high aesthetic standards of the international market, especially the American market, and to kill insects possibly harbored in the plants, growers use any means at their disposal, including banned and unregistered pesticides.  This accounts for approximately 20% of pesticide use.  According to Wayne Burnett, import specialist with the Animal and Plant Health Inspection Services Plant Protection and Quarantine Division, the risk of having valuable shipments rejected by customs because of insect infestations stimulates people offshore to increase their pesticide use.  There is a lot of economic pressure to keep those shipments from being rejected.  Dorren and Maharaj, authors of "The Game of the Rose", note that floriculture consumes more pesticides than any other agriculture sector.  Floral workers, sprayers and handlers suffer the brunt of the trade's pesticide use.  Richard Wiles, vice president of research for the Environmental Working Group, says that consumers are buying roses that, toxicity levels suggest, should be handled by workers wearing gloves.  Wiles suggests that pesticide residue on the petals of imported roses is fifty times that allowed on food imports.

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].  Methylbromide, an ozone destroyer and a category1 acute toxin, is also heavily used and is among the most dangerous toxic substances known.  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 nearly80% 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 greenhou ses 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.


A large of the pesticides used in rose production in the South are not produced domestically, but rather in the United States, where they are usually heavily restricted or completely banned from the American market due to their dangerous levels of toxicity. The Federal Insecticide, Fungicide, and Rodenticide Act is the most significant federal law in the United States regulating the production and use of pesticides and claims that pesiticides can be very harmful to humans and the environment because they never can effect solely the target pest that they are intended to destroy (Megara). The Environmental Protection Agency (EPA) generally prohibits farmworkers from working in greenhouses shortly after fumigation, but each pesticide has a specific interval of time that must elapse before workers are permitted to reenter the harvesting area and handle the products. On December 18, 1996, EPA granted the rose industry a limited exception to the early entry prohibition. No other agricultural industry has been given such an exception to the regulations prohibiting early entry into pesticide treated areas. Although these regulations are for within United States borders, they set the scene for the American market's lack of concern for the origin of their imports. In fact, the United States compounds the problem by exporting pesticides, such as methyl bromide,that are illegal for use within its own borders to countries like Ecuador. About 25% of US pesticide exports involve unregistered pesiticides, according to a 1989 GAO report.(Export of Unregistered Pesticides in Not Adequately Monitored by EPA, GAO/RCED-89-128).

US pesiticide manufacturers generally claim that they do not manufacture and export pesicides that have been denied registration in the US. They claim that more stringent export controls for unregistered pesticides counld unfairly prohibit the export of products for which there is little evidence of environmental risk (Schierow). They argue that some pesticides, unregistered in the United States, may be approved by regulatory agencies in other countries. Other pesticides may not be registered for economic or marketing reasons or because target pest are not a problen in this country, they need not be registered in the US. "The Global nature of pesticide production and distribution further complicates the issue: a US law cannot prevent the manufacture and use of pesticides in other countries" (Schierow). Environmentalists argue that any pesiticide product not registered in the United States has not been approved by the EPA and is potentially unreasonably harmful. Thus, they support proposals to prohibit exports of unregistered pesticides as a means of protecting the global environment and the working conditions of harvesters globally [Congressional Research Service].

The problem lies in unrestricted markets.  If countries like the United States were to set guidlines for pesticide residues on flowers, producers in the South would have incentives to lower their chemical use.  Some European countries are already establishing cooperatives with growers concerned about pesticide use and worker's health.  America is lagging behind  Europe in this trend of market restrictions and labor quality in producing countries.

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" (Maharaj and Dorren).


3. Related Cases


Keyword Clusters
1. Trade Product: AGRIculture
2. Bio-Geography: TROPical
3. Environmental Problem: HABITat loss, Water Polution

4.  Draft Author:  Laura Holt,  April, 2000

II.  Legal Clusters

5.  Discourse and Status: Agreement and in-progress

6.  Forum and Scope: Ecuador and Andean Community

7.  Decision Breadth: Free trade of cut flowers

8.  Legal Standing: no laws standing

III.  Geographic Clusters

9.  Geographic Locations

a. Geographic Domain: South America
b. Geographic Site: Ecuadorian highlands
c. Geographic Impact: Ecuador

10.  Sub-National Factors:

Yes. The desperate social and economic factors of the Ecuadorian peasants coupled with the favorable climate made the highlands in Ecuador a target location for the rose industry.

11.  Type of Habitat:  TROpical

IV. Trade Clusters

12.  Type of Measure:

Roses and other cut flowers produced in Ecuador and in other rose producing countries in the Andes region, became a free trade product in 1991 with the passing of the Andean Trade Preference Act of 1991. This agreement removed trade barriers from drug producing countries, such as Ecuador and has enabled Ecuador's flower trade to take off in the world market.

13.  Direct v. Indirect Impacts:

Direct and indirect impacts. The rose trade in Ecuador has been able to openly trade with key trade partners, such as the US.

14.  Relation of Trade to Measure to Environmental Impact

a. Directly Related to Product: YES. flower
b. Indirectly Related to Product: Pesticides
c. Not Related to Product: None
d. Related to Process: YES. Habitat

Contamination of water table, which then causes polution-related illnesses in livestock and peasants.  Specific toxins used are ozone destroyers and others have fatal effects on the soil and crops growing in the surrounding areas.

15.  Trade Product Identification:

Cut flowers, but more specifically, roses produced for primarily export to developed countries.

16.  Economic Data:

Ecuador Rose ExportsEcuador Rose Exports
$ '000 1997 $ '000 1998
United States 68,097 75,948
Netherlands 13,194 20,047
Germany 6,534 10,360
Italy 7,025 9,821
Spain 1,455 2,924
France 1,109 1,849
Austria 380 467
Finland 213 196
Sweden 108 179
Portugal 81 235

The rose industry is relatively new to the world market.  Ecuador is ranked 10th in the world for cut flower exports.  In 1993, Ecuador exported an estimated 22,446,000 USD in roses.

17.  Impact of Trade Restriction:

No trade restrictions apply to this case, because of the Andean Trade Preferance Act (ATPA).

18.  Industry Sector:  Agriculture

19.  Exporters and Importers:

Flower Exporters
1995 1996 1997
Netherlands 5,505,983 3,510,789 3,433,668
Colombia 492,303 552,971 538,468
Israel 182,149 158,242 157,897
Ecuador 95,351 156,866 121,474
Kenya 104,862 114,712 100,059
Spain 61,331 106,023 55,375
Italy 187,69,307 69,307 75,101

Products from the South are showing to be in more demand in the North than products from the North. This is due to the lower production costs and more temperate climates in the tropical South. Some of the key importers of cut flowers are: the United States, Germany, Italy, Netherlands, Spain, Austria, Finland, Israel, Japan, Switzerland, and the UK.

V.  Environmental Clusters

20.  Environmental Problem Type: HABITat Loss and Water/Air Polution

21.  Name, Type, and Diversity of Species:

Name: Rose

Type: Market roses

Diversity: Over 30,000 species

22.  Resource Impact and Effect:

23.  Urgency and Lifetime: low and lifetime of rose

24.  Substitutes: Other flower industries are under similar conditions. The only substitute is for farmers to make the switch to organic harvesting methods.

Florinsa rose farms in Ecuador are leading the path for innovative and organic techniques for producing roses for the international market. They were instituted 12 years ago by Hans Maarschalk of the Netherlands. Today he has two production farms, Exflodec and Florinsa, which produce on 22 hectares. Florinsa's main goal is to produce long stems and big flowers, but by using producing technique that have less of an environmental impact. Instead of using chemical fertilizers, they are using compost made from organic material, such as rose residue, waterhyacinth, manure and black soil. Controlling the pests and diseases, several biological and chemical products are used. Control only takes place after the problem is identified, rather than fumigating as a preventative measure.

Some European countries, especially Germany, are exercising their market power to urge flower plantations in South America to meet the "green stamp" requirement, which, simply put, is a seal of approval once a business has demonstrated that they cause minimal environmental degradation. The flower label is a German trademark for developing countries' flower production carried out with care for humans and the environment. One of Flower Label's criteria is waste seperation. This is to ensure that pesticides, plastics, and other chemicals are disposed of in a manner least expected to harm the surrounding environment. Switzerland has also developed an environmental code of conduct with the Flower Campaign [Eco-Americas].

VI.  Other Factors

25.  Culture: No

26. Trans-Boundary Issues: Environmental destruction, improper use and handling of dangerous toxins

27.  Rights: Human Rights

28.  Relevant Literature:

Ecuador Exports. http://www.ecuador.org/trdinv2.htm

Maharaj, Niala and Dorren, Gaston. The Game of the Rose. The Netherlands; International Books. 1995

Meer, Marga van der, "Pioneer in Ecuador Pursues Inovation" December 1997.

Megara, John M. "The rose industry exception for early entry into pesticide treated greenhouses: Romance in regulation", Boston College Environmental Affairs Law Review. Vol. 25 (Summer 1998) p. 941-988.

Rembert, Tracey C. "Dangerous beauty: Flower farm may threaten workers and the environment." The Environment Magazine. Monday, July 12, 1999

Roses Incorporated. http://www.rosesinc.org/vignette.htm

Schierow, Linda-Jo (Environment and Natural Resources Policy Division). "95016: Pesticide Policy Issues" Congressional Research Service Report for Congress.

Thrupp, Lori Ann. "Bittersweet Harvest: Pesticide Exposures in Latin America's Flower Export Trade" World Resources Institute, 1998-99

*Photographs and Map provided by RoseElite Group, Roses and Fresh Cut Flowers of Ecuador