Presentation on theme: "Aline Gros Kasia Głuch Paolo Sini Ecuadorean Rose Industry."— Presentation transcript:
Aline Gros Kasia Głuch Paolo Sini Ecuadorean Rose Industry
Ecuador Ecuador’s rose industry started 20 years ago and has been expanding rapidly The world’s fourth largest producer of roses Roses are the nation’s fifth export Customers all over the world
Basis of Ecuador’s comparative adventage in the production of roses Many rose farms are located in the Cayambe and Cotopaxi regions Cayambe 5790 m Cotopaxi 5897 m Intense sunlight Fertile volcanic soil Equatorial location High altitude
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 Valentine’s Day. Who loses? Producers of roses who have lost business in rose industry People who have lost their jobs in their own country
Comparative Advantage theory Theory : According to Ricardo’s 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 Ricardo’s 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.
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
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
Conclusion – the certification Advantage Growers has to respect some rules ( about workers’ health) Disadvantage When the customer is buying roses for Valentine’s day does he take care about working condition in Ecuador?