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Colombia's hurting flower industry

TRADE
Growers' profits wilt
A U.S economic slowdown and a devaluation of the dollar have hurt the flower industry that's so vital to Colombia
An insider's look at the Colombian flower business GUASCA, COLOMBIA — It's rush hour inside the plastic greenhouses and metal sheds at Wayuu Flowers, where farmhands clip 30 varieties of roses, grade their stems and bulbs, and box the bunches for flights to Miami.

Valentine's Day is the one day in the middle of the winter when everyone wants roses, and the 150 laborers on this 35-acre rose plantation are working overtime to sell American customers fresh, fragrant flowers.

But for all the bustle and fuss of the peak season, growers in Colombia, the world's second-largest exporter of cut flowers, say they are being squeezed.

Prices for flowers remain flat. The falling value of the U.S. dollar has turned profits into losses. Several farms have closed, laying off thousands of employees. And a trade deal that would give Colombian flowers permanent duty-free entry into the United States may be rejected by the U.S. Congress.

"The business has always faced difficulties, but never more than now," said Augusto Solano, president of the Colombian Association of Flower Exporters, a trade group in Bogotá.

Part of the problem is heavy reliance on the United States, where nearly six of every 10 flowers sold are imported from Colombia.

Amid an economic slowdown, the U.S. dollar has lost more than one-third of its value against the Colombian peso.

As a result, the income in pesos of Colombian growers has plummeted, even though their worldwide exports increased from $966 million in 2006 to $1 billion last year.

Efforts to boost U.S. sales run up against the view that flowers are luxury items rather than everyday adornments in homes.

Annual per capita spending on flowers in the United States is just $25, compared with $50 in Great Britain and $101 in Switzerland, according to a study by the Flower Council of Holland published in 2004, the last year when figures were available.

"Flowers are seen as some sort of extravagance that are just for special occasions," said Robert Weatherford Jr., president of Houston-based wholesaler Southern Floral Co. "I'm not sure why."

Much of the retail business has shifted from neighborhood floral shops to supermarkets and big-box stores, such as Wal-Mart, that now sell half of all flowers purchased in the United States.

But their low prices have cut into the earnings of Colombian producers. All told, about a dozen large Colombian flower farms have closed in the past three years, eliminating 15,000 jobs, Solano said.

"How long can this pressure be endured by the floral chain?" said Ernesto Velez, a veteran flower farmer and board president of the exporters association.

For years, the flower industry was Colombia's Cinderella story — the good news amid the bad news about drug cartels, kidnappings and a long-running guerrilla war.

The savannah surrounding the Colombian capital of Bogotá was once dominated by dairy farmers. But in the mid-1960s, David Cheever, a graduate student at Colorado State University, identified the region as the best spot on the globe to grow flowers for the U.S. market.

Year-round growth
Flowers can be grown year-round because the area has constant 12-hour periods of daylight and temperatures averaging 57 degrees. In addition, Bogotá is just a three-hour flight to the United States. Colombian and U.S. entrepreneurs read Cheever's term paper and began planting roses, carnations, chrysanthemums and other flowers, and developed high technological standards.

"It was not planned," Velez said. The study "fell into the right hands at the right moment."

Today, only the Netherlands exports more flowers than Colombia.

In a country where many farmers give up on poor-paying legal crops to grow coca, the raw material for cocaine, the flower industry is labor-intensive and provides 100,000 direct jobs. Flowers, for example, require six field hands per acre, compared with less than one for coffee and other agricultural products.

Flowers "provide stable jobs," said Merardo Gonzalez, 39, as he clipped red roses from 5-foot-tall bushes inside a greenhouse at Wayuu Flowers. Gonzalez, who earns about $250 a month, added: "I've always made a living on flower farms."

Duty-free since 1991
To develop and strengthen legal industries and help these nations fight drug production and trafficking, Washington has allowed flowers and thousands of other products from Colombia, Ecuador, Peru and Bolivia to enter the U.S. duty-free since 1991.

But these benefits must be renewed every year by the U.S. Congress, a process that requires an expensive lobbying campaign by the Colombians.

That's why growers are pushing for passage of a trade deal between the two countries that would enshrine the duty-free status of flowers and allow more American products to enter the Colombian market with reduced tariffs.

Both governments signed the trade agreement in 2006, but it's unclear whether there is enough support in the U.S. Congress, which is now controlled by Democrats, to approve the deal.

More exports elsewhere
Amid hard times, Colombian growers are exporting more flowers to Russia, Japan and other countries.

They also are trying to increase productivity, sell more expensive products, such as ready-made bouquets, and introduce new varieties for ever-fickle customers.

As he wandered past rows of red, pink, green, yellow and orange roses at the Wayuu Flowers plantation, Velez noted that many ex

By BillBigD on Feb 10, 2008, 22:23 in Friendly Talkzone.

miamimike says on Feb 10, 2008, 23:26:

And wait 'til China gets its Cut Flower Export Industry into High Gear with Massive Exprts to Europe and the States. The Chinese have Big Ambitions in this Industry and they don't even float their Currency,,,Tough Competition,,,

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.

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lpdiver says on Feb 10, 2008, 23:35:

Reading between the lines...Much of the retail business has shifted from neighborhood floral shops to supermarkets and big-box stores, such as Wal-Mart, that now sell half of all flowers purchased in the United States.But their low prices have cut into the earnings of Colombian producers....

Man I hate Wally world. I am forced to do some of my shopping there; due to geographical convienience... but as little as possible.

t

"cook some rice!"

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Waterdawg says on Feb 11, 2008, 05:26:

Colombia has some serious problems ahead .. The one thing they do have control over is the value of their own currency .....

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miamimike says on Feb 11, 2008, 06:58:

Waterdawg, true while they(col) have control over their currency but to protect themselves from China, lets say hypothetically they freeze it for trades with China but what happens when they trade with their FairTrading Partners like Canada, Europe and the USA all of whom float their currency? Its not realistic to think they can have exclusions, currency wise, only to China. BTW, Colombia allready lets in Mountains of Textiles, Shoes and its decimating their domestic manufacturing in these Industries. China is cranking up for Wine Exports also-their Wine is here allready in Miami and reports are its not bad for the money. I think what needs to be done, IMHO, is for China's Trading partners to tell the powers to be in China is "Float your Currency or else we impose a Hefty Import Tax/Tariff on your incoming products. Reagan did this to the Japan concerning USA bound Exports of Large CC Motorcycles in the 80s to correct the unfair trade that was killing Harley Davidson. And it worked. All the major Japanese Manufacturers of Large Japanese Cycles then Built Plants here in the USA and gave Americans Jobs and avoiding hefty import duties at the same time. I beleive Honda was first with their Goldwing Plant in their Marysville, Ohio Plant and the others(yamaha, kawasaki ect) soon followed. Also more has to be done to get the Chinese to drop their Trade Barriers to the Products of other Nations; huge problem at present all the while the Chinese continue to Rack up huge One Sided Billions of Dollar Trade Surpluses with us. Not much has been done by the current Administration in Washington on this issue, maybe the Next Group will act more Favorably,,,and fairly,,,We need someone to speak forcibly like Reagan did in the 80s, he saved the American Motorcycle Industry(large cc) not to mention, the 1000s of Good Jobs that were brought to the USA when Honda, Yamaha, Suzuuki, Kawasaki relocated their plants here in the USA(for large cc bikes). It can be done,,,

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.

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BillBigD says on Feb 11, 2008, 16:28:

Didn't realize China was getting into the wine business

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Robert Jorge says on Feb 11, 2008, 23:16:

My Suzuki GSXR 1000 was made in Japan.

--"I believe in making the world safe for our children. But not for our children's children, because I don't think that children should be having sex." - Jack Handy

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miamimike says on Feb 12, 2008, 05:55:

RJ--was the whole Bike made in Japan or were 75% of the parts made in Japan,. shipped to the USA and assembled here? At least 75% of them so it could receive the "Made In USA: stamp?

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.

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Gator says on Feb 13, 2008, 09:53:

BIGGGGGGGGGGGGG problem for exporters, especially coffee and flowers.

"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

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Robert Jorge says on Feb 13, 2008, 20:29:

Just a second MM .... I'll go check. I am going to look at the manufacturing plate.

--"I believe in making the world safe for our children. But not for our children's children, because I don't think that children should be having sex." - Jack Handy

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Robert Jorge says on Feb 13, 2008, 20:44:

Image and video hosting by TinyPic
I am pretty sure it is 100% hecho en Japon.

--"I believe in making the world safe for our children. But not for our children's children, because I don't think that children should be having sex." - Jack Handy

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