Blossoming Cut-Flower Industry

▪ 1998

      In 1997 less-developed countries (LDCs) profited from the lucrative annual $5 billion global cut-flower industry, but importers in Western Europe were scrutinizing their activities and considering boycotting shipments from what they considered "dirty" flower farms—particularly those that used pesticides and inefficiently used water but also those that employed nonunionized workers at low wages. Although a 1995 report on world trade, "The Game of the Rose," concluded that three-fifths of all cut flowers that crossed international borders originated in The Netherlands, by 1997 countries in South America and Africa were entering the market at a rapid pace. An ideal climate, low labour costs, and the availability of direct air flights to markets in industrialized nations contributed to the boom in cut-flower production in such countries as Colombia, Ecuador, Costa Rica, and Guatemala, where much of U.S. production had moved. Air-freight costs were more than offset by lower production costs, and skilled management was readily available in those countries.

      European production moved primarily to the African countries of Kenya and Zimbabwe; in the latter country two-thirds of all horticultural export earnings were attributed to cut flowers. South Africa, Zambia, Tanzania, and Côte d'Ivoire also supplied significant amounts for export. In Kenya larger operations were funded by external corporations with direct links to markets, whereas in Zimbabwe producers tended to be farmers who would grow a few hectares of flowers as an additional cash crop and market them through cooperatives. As production rose, consumers in developed countries became more discerning, and producer cooperatives, first in Kenya and then in the rest of Africa, responded by instituting environmentally friendly production methods and hiring independent inspectors to certify and document their practices.

      Other countries that were expected to become a major force in both flower production and export included China, which looked to quadruple its current production and revenues from $250 million to $1 billion over the next 10-15 years, and New Zealand, where export business for one company, New Zealand Bloom, had increased eightfold and was expected to continue growing.

      In some LDCs major impediments to continued growth included the availability of credit and the development of skilled indigenous management. Most cut-flower operations were dependent on imported management that was hired on relatively short-term contracts. As a result, the quality and yield of flower crops were variable, a situation that could both unsettle bankers and buyers and lead to high volatility in markets. Another obstacle was the reluctance of major flower-breeding companies to release their best new material to LDCs due to what they perceived as insufficient respect for intellectual property rights. Nonetheless, production in LDCs of fresh-cut flowers was expected to increase for the foreseeable future as worldwide consumption grew (mourners purchased some 60 million flowers to honour Diana, princess of Wales, after her death in August), whereas production in developed countries would likely stabilize or decrease.

SHEPHERD OGDEN

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