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 regionsCayambe 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?

Thank you for your attention!