SCP Evidence Base: Sustainable Commodities Case Studies...

SCP Evidence Base: Sustainable Commodities Case Studies CUT FLOWERS May 2007

Development of the Evidence Base: Sustainable Commodities Final Report

Case Study – CUT FLOWERS

TABLE OF CONTENTS

EXECUTIVE SUMMARY ..........................................................................................III 1 COMMODITY OVERVIEW..............................................................................1 2 SUPPLY AND DEMAND STATISTICS AND TRENDS ..................................5 3 POLICIES AND INITIATIVES .........................................................................5 4 SUPPLY CHAIN ANALYSIS. .......................................................................12 5 IMPACT ASSESSMENT...............................................................................24 6 SUMMARY....................................................................................................39 APPENDIX I – LITERATURE REVIEW...................................................................42

LIST OF TABLES

Table 1: Main flower varieties grown in major exporting countries.............................3 Table 2: The UK’s top trading partners ......................................................................5 Table 3: Top Trading Partners total exports of cut flowers.........................................1 Table 4: The proportion cut flowers makes up of total exports from UK partners ......1 Table 5: Top 20 importing countries of cut flowers.....................................................2 Table 6: Top 10 Fastest-growing importing countries ................................................3 Table 7: Estimates of employment in export horticulture in Kenya and Zambia.......30 Table 8: Air miles from key cut flower exporters to the UK ......................................37

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LIST OF FIGURES

Figure 1: Supply chain overview for cut flowers.......................................................12 Figure 2: Inputs and outputs for cut flower pre-cultivation........................................13 Figure 3: Production and harvesting inputs and outputs ..........................................15 Figure 4: Processing inputs and outputs..................................................................17 Figure 5: Main stakeholders in Kenyan flower industry............................................20

LIST OF BOXES

Box 1: Problems with codes of conduct for cut flower production ............................11

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trade.

Executive Summary The UK’s significance

In 2004, the UK imported 202,570,764kg of cut flowers1 from the rest of the world. This was the equivalent of nearly $978,245,175 in terms of trade value. The Netherlands is by far the UK’s most important trading partner in cut flowers, importing flowers worth a total of almost US$800 million in 2004. This represents approximately 79% of all UK imports of cut flowers. The Netherlands is a major grower of cut flowers. However, the international auctions in the Netherlands mean that it is an important staging country for cut flower imports from other countries worldwide2. After the Netherlands, the major producer countries exporting directly to the UK in 2004 were Kenya (8%), Colombia (4%) and Spain (4%). The figures in brackets represent % of total UK imports from each country by value in US dollars, based on data from Com

In analysing the UK’s relative importance in the cut flowers market, the proportion of the UK’s consumption of the total production of cut flowers was calculated. The proportion of the market of most significance is Kenya (8.64%) followed by Columbia (4.20%) and then the Netherlands (1.05%).

In the wider context, the UK’s position as a global consumer of cut flowers should be recognised. As the leading importer of cut flowers world wide, and a country that experienced nearly 20% growth in the market between 2000 and 2004, the UK clearly has a significant role in the global consumption of cut flowers, if not a country specific one.

Supply chain and environmental impacts

For cut flowers, the stages of production can be split into (see figure overleaf for overview of the life cycle of Cut Flowers):

• Pre-cultivation - Farm establishment • Cultivation (Production and harvesting) • Processing and Transportation • Distribution

1 SITC Rev.3 code 29271 Cut flowers and flower buds of a kind suitable for bouquets or for ornament 2 Comtrade data on imports of cut flowers to the Netherlands show that Kenya (36%), Israel (15%), Zimbabwe (9%), Ecuador (9%) and Uganda (5%) were the major trading partners. The figures in brackets represent % of total Netherlands imports from each country by value in US dollars, based on data from Comtrade.

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Pre-cultivation

This is characterised by the acquisition and preparation of land suitable for the cultivation of cut flowers. Key characteristics for this land are (dependant on variety): • Availability of water supply; • Suitable climate; • Availability of labour; and • Environmental protection (from wind, sun rain, pests, diseases etc).

Impacts

The main impacts can be categorised into: • Landscape: the increased use of green houses and plastic protective covers

can blight the landscape particularly in high mountain areas. This is particularly the case in the mountain plateau areas of Colombia but would be applicable I other areas where green houses were a significant proportion of cut flower cultivation

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• Land use: The requirement for a plentiful supply of water as well good transport links to grow and transport flowers means that plantations or farms are likely to be located in areas of high population density and hence compete with demand for land for housing or agricultural uses3.

• Air pollution and climate change: Methyl bromide4 gas is usually applied to the soil before the crop is planted and the soil is then covered with plastic tarps. When the tarps are removed, part of the gas will eventually enter the atmosphere

Cultivation

Inputs into cultivation of cut flowers are dependent on a number of variables, such as climate and variety (indigenous varieties are often grown in open fields whereas non-indigenous varieties may need to be cultivated in greenhouses and may require additional resources such as water and chemical treatment).

Key demands during this stage include: • Fertilisers – use of both organic and non-organic • Herbicides & fungicides – including the possible use of Methyl bromide • Pesticides • Irrigation (water) – this is crucial to cultivation, indeed ~60000litres/h/day5 of

water is needed for flower cultivation in Uganda • Labour - tasks involved require high levels of dexterity, concentration and

decision-making. Tasks include bed preparation, planting, spraying of pesticides and irrigation, disbudding, training the plants growth direction, weeding, cultivation, mulching, pruning, and cutting the flowers

Impacts

The impacts of cultivation can be spit into the following areas: • Chemical inputs: the application of chemicals is integral to the production of cut

flowers, it is not only the quantity (for example, the Colombian flower industry uses 200 kg of pesticides for each hectare of flowers under cultivation) but also the in combination effects of multiple chemical applications (for example Ecuadorian rose producers typically use six fungicides, four insecticides, three nematicides and several herbicides). Furthermore, as with pre-cultivation, the use of methyl bromide can contribute to the greenhouse effect. These chemicals can leach into ground water and surface waters, causing pollution of the aquatic environment

3 World flowers state that newly established flower farms can attract infrastructure and migrants. 4 (methyl bromide is on the list of banned ozone-depleting substances of the Montreal Protocol) 5 Asea, P, K, Kaija, D, 2002 Impacts of the Flower Industry in Uganda, International Labour Office, http://www.ilo.org/public/english/dialogue/sector/papers/uganflow/index.htm, [accessed 4/7/07]

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Case Study – CUT FLOWERS • Water use: Abstraction of water for irrigation for cut flower production can affect

groundwater levels and water levels in surface water supplies in areas of production, with consequent effects on the landscape, on water supplies for neighbouring communities and on biodiversity

• Pollution: Serious water pollution can result from the use of surface water (e.g. from lakes and rivers) for irrigation of cut flowers. Excessive irrigation can lead to salinisation, because salts contained in irrigation water accumulate in the soil as the water evaporates or is used by plants. The intensity of the use of plastics in developing countries can contribute heavily to pollution in the form of non-biodegradable waste

• Biodiversity: Plants can tolerate salt in limited concentrations, but heavy soil deposits can make land infertile. The excessive use of fertilisers and other chemicals can result in eutrophication of water supplies

• Air pollution: Fumicide and pesticide spray application. The impacts on human health of exposure to chemical sprays, including in enclosed greenhouse environments, are better documented in relation to the flower industry

• Energy and climate change: Growing in heated greenhouses occurs in countries where the climate is too cold, too dry or too irregular or where nighttime temperatures drop, particularly at higher altitudes. The tendency for cut flowers to be grown at altitude in developing countries (Kenya, Ecuador, Colombia) means that night time temperatures can be cooler and growers may use heating at night to accelerate growing. Furthermore, in hotter countries, flowers and plants can be cultivated in cooled greenhouses, because the outside temperature is too hot. Keeping flowers in a heated or a cooled greenhouse requires a large amount of energy. In most cases, energy is generated by burning fossil fuels, which generates CO2

• Soil Erosion: Soil erosion is likely to be an issue in the vicinity of steep slopes such as the high altitude growing areas of Colombia and Ecuador. An ILO report (2000) comments that soil erosion is an issue for smallholder farmers rather than larger plantations. However, little data has been identified that specifically identifies soil erosion as a concern

• Economic: The labour intensive nature of the flower industry has been a major factor in its promotion in developing countries, as a positive impact for employment creation (employing 40,000-70000 in Kenya alone). However, much of the employment is on a temporary, seasonal or casual basis, reducing the positive benefits for employees and increasing vulnerability to shocks, particularly when employment benefits are reduced for non-permanent employees

• Vulnerability: The reliance on temporary or seasonal workers and the inadequate protection against unfair dismissal, even for permanent employees, indicate that the cut flower sector does not provide strong protection for employees against shocks

• Labour: Labour conditions cover a range of issues affecting workers, for which international and national labour standards have been established

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Case Study – CUT FLOWERS • Job insecurity and harsh treatment of seasonal and casual workers have been

identified • Excessive requirements for overtime is identified to be a problem, particularly for

workers engaged in the packing houses • Employment benefits, such as sick pay, maternity pay, housing allowance,

healthcare and childcare can all have positive socio-economic impacts for workers and their families and the wider local economy

• Forced or child labour were not identified as issues in reports on cut flower production in Kenya or Zambia

• Inequality: Impacts for inequality have been identified through an number of studies and can be summarised as:

• Insecurity of employment for women who are over-represented amongst non-permanent workers

• Overtime, making it difficult to balance childcare with employment • Low wages and childcare, where women unable to afford childcare may leave

their children unsupervised or out of school during work or children are separated from their mothers

• Discrimination against pregnant women in decisions concerning recruitment and redundancy, lack of access to maternity leave

• Gendered allocations of jobs reducing women’s opportunities for promotion • Particular risks from exposure to chemicals for pregnant and breastfeeding

women • Sexual harassment and verbal abuse • Health and Safety: employers often fail to provide sufficient training and

protective gear to workers who face daily exposure to toxic chemicals. Governmental regulations regarding pesticide use and health and safety standards are often insufficient or unenforced

Processing

Labour inputs are key to the post-harvest process. The tasks involved after cutting flowers include classifying, packing and labelling. Again, these tasks require high levels of dexterity, concentration and decision-making. The seasonal peaks in demand can result in round-the-clock demand for labour in the packing and grading houses.

One of the most important elements is an efficient and unbroken cold chain system. Incorrect harvesting, packaging or storage can lead to flower senescence (looking older), wilting, leaf yellowing or shattering (loss of leaves/petals). Refrigerated aircraft ship flowers from international locations. For developing countries exporting to Europe, the availability of regular (ideally daily) international scheduled flights can be a crucial factor in the viability and competitiveness of the sector in the international trade.

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Impacts

Key impacts during the processing and transportation stage include: • Air pollution: The international transport of cut flowers is done by air. Air travel

is particularly damaging due to the amount of fuel burnt, composition of the fuel (kerosene) and the nature of its emission into the atmosphere (i.e. at high altitude). This is particularly unavoidable for developing countries exporting cut flowers to Europe. Research conducted for DEFRA on food miles concluded that air travel is the most environmentally damaging mode of transport in terms of climate change. “Although air freight of food accounts for only 1% of food tonne kilometres and 0.1% of vehicle kilometres, it produces 11% of the food transport CO2 equivalent emissions”6

• Water pollution: Sometimes flowers are dyed to alter or deepen the flower’s natural colour. This can lead to the pollution of ground- and surface water because of the emission of dyes and preliminary treatment substances

• Packaging: The trade in cut flowers generates a considerable amount of packaging waste. Packaging materials can cause impacts through the release of chemicals during production and degradation

Trading and distribution

There are four main routes for growers and exporters to access international markets: directly through auctions, using an agent to sell your produce at an auction, via an import wholesaler, or directly to a retail chain.

This stage of the supply chain is mainly within Europe, both at the Dutch auctions and within the UK. This study is concerned with impacts outside the UK. It was felt that this stage is likely to have the least impacts within the Netherlands, relevant EU legislation and environmental practices are likely to be adequate to address negative social impacts, particularly given the scale and significance of the Dutch auction houses. However, it is possible that there are some harmful environmental, social or economic impacts associated with this stage.

6 AEA Technology, 2005, ED50254 Issue 7 The Validity of Food Miles as an Indicator of Sustainable Development: Final Report produced for DEFRA. DEFRA

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Key initiatives and policies

Policies

All flowers and plants are subject to phytosanitary regulations intended to prevent the introduction of plant pests and diseases, which are not present in the EU. Moreover, various organisations and representative bodies are developing environmental as well as social standards connected to the conditions in which plants and flowers are grown and harvested. When exporting cut flowers to the EU, a number of legislative regulations are relevant: • Plant health control • CITES regulations • Breeders’ regulations • Quality and grading • Packaging and marking

The environmental, social and safety aspects of products and production have gained increasing attention both in producer countries and in consumer countries, particularly within Europe and the United States, with greater legislation put in place, engagement by UK supermarkets concerned about their supply chains and significant consumer movements. A number of organisations control and regulate these matters: • Floriculture Environment Programme or Milieu Project Sierteelt (MPS): A

Dutch environmental code with an optional social chapter, which assesses and certifies its participants’ environmental performance and links with other quality standards (ISO 9001, GAP and by implication, ETI)

• International Flower Co-ordination (IFC) and Flower Label Programme (FLP): Unlike the MPS, this programme labels products based on human rights and environmental standards, with an International Code of Conduct for Cut Flowers (ICC)

• Ethical Trading Initiative (ETI): The Ethical Trading Initiative (ETI) is an alliance of companies, non-governmental organisations (NGOs) and trade union organisations. It has developed its own base code and it also promotes the implementation of corporate codes of practice which cover supply chain working conditions

• EUREPGAP: Many ETI members sought EUREPGAP (Euro-Retailer Produce Working Group on Good Agricultural Practice) certification of good agricultural practice by those supplying their flowers

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• Fairtrade Mark7: Fairtrade standards cover social, environmental and economic development. The Mark is an independent product certification label, which guarantees that workers on flower farms are getting a better deal. Fairtrade roses currently come from a small number of farms in Kenya and had an estimated retail value of over £4m in 1995

• Fair Flowers and Plants: This is a new international consumer label, conceived by an alliance of non-governmental organisations (NGOs) and trade unions, which will require adherence to the International Code of Conduct for the Production of Cut Flowers’ (ICC’s) standards

• Labels from various other flower exporting countries: These labels certify quality and codes of conduct aspects. Some of these labels, such as the Kenyan Flower Council’s label, Colombia’s Florverde scheme and Zambia’s Export Growers Association (ZEGA) code are becoming more recognised by EU importers

Conclusions

Reports on social impacts for workers make reference to codes of practice on environmental practice; however, there is little recent data in the public realm on different environmental impacts of cut flower production. This may be because the impact is assumed to be relatively well understood. The case study on Lake Naivasha (Box 2 main report) provides an interesting view of how environmental impacts on water quantity and quality, on biodiversity and impacts for neighbouring communities inter-relate. These inter-relations include the indirect negative environmental impacts associated with large economic migrant populations attracted by the employment opportunities of the cut flower industry to this sensitive area. They also include the negative impacts for the local population as a result of the increased demand on environmental resources and the worsening of environmental conditions affecting other economic activities (including fishing) and on community health (as a result of water pollution and over-abstraction), housing quality and localised food security (as a result of declining fish stocks used for local consumption).

An area of environmental impact receiving the most publicity is the impact that the transport of cut flowers via airfreight has on climate change and the greenhouse effect. Cut flowers are highly perishable products and are thus crucially dependent on efficient and speedy distribution channels and excellent cold-chain management systems. Air travel is particularly damaging due to the amount of fuel burnt, composition of the fuel (kerosene) and the nature of its emission into the atmosphere (i.e. at high altitude) In fact, the pollution and clouds produced by jet planes have a climate impact that is nearly three times greater than the CO2 in the fuel they burn

7 Fairtrade Foundation, 2006, Fairtrade Roses Q&A. www.fairtrade.org.uk [Accessed 20/06/06]

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The most robust information available is related to the social impacts on workers, arising from studies on the effects of codes of conduct for workers. These demonstrate that codes have been effective to some extent in improving working conditions. However, they also identify ongoing problems that have proved harder to address, including gendered dimensions, which are strongly evident in a feminised employment sector. These are most fully documented in reports from a two year research project on ethical trade in African horticulture, funded by DFID. The findings of these studies are also acknowledged in an ETI report (2005). For results of the primary research, see Smith et al 2004 and Tallontire et al (2004). These studies have used qualitative research methods using triangulation to ensure robustness. Their findings are more usable, general and build up a comparative picture more effectively than other reports which are more country-specific or which attempt to use semi-quantitative data, based on inadequate sample sizes (Omosa et al). Nevertheless, all these reports provide a reasonably consistent overall picture of an industry that has a growing understanding of the social impacts for workers, particularly women workers, and that is identifying ways to address these impacts in order to ensure the undoubted economic benefits, including in terms of job creation, particularly for women, who feature strongly amongst the poorest in the societies concerned.

The focus on worker conditions contrasts with a relative dearth of information on wider impacts for the community health and safety, impacts on access to natural resources and a more holistic understanding of sustainable economic benefits at a community level.

The economic benefits are available in terms of contribution to export earnings and to job creation, with information on earnings and staff benefits being generated as a result of the studies on impact of codes of conduct. However, few studies appear to have considered the economic sustainability of the industry, including in comparison with the closely related sector of vegetable production, or other forms of export production.

In terms of policy implications, areas of concern: • Climate change: Recent research by Cranfield University implies that less CO2

is produced by transporting cut flowers by air than growing flowers in heated greenhouses in colder climates8. However, this is dependent upon a number of assumptions, such as the energy used to heat greenhouses comes from fossil fuels. More research on this would be useful particularly testing the robustness of the assumptions, the potential to mitigate these impacts and how does this relate to economic benefits for exporter countries not yet subject to limits on climate change emissions.

• Economic and social impacts: Workers, growers and codes of conduct operators alike are in agreement that the economic benefits for national

8 http://www.dfid.gov.uk/news/files/Speeches/trade/hilary-valentine-speech.asp

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economies and for employees and the household/local economy must be maintained whilst negative social impacts for workers as a result of working conditions can and must be addressed. Codes of conduct and labelling, with independent social and environmental auditing are increasingly effective at addressing harmful impacts, although identified problems still remain with this approach to mitigation. For example, consumer boycotts can threaten the economic benefits and derived social benefits resulting from increased income from working in the cut flower industry9; the proliferation of codes can act as a cost barrier particularly to smaller independent growers; ensuring the labelling keeps track with the appropriate batches of flowers through the auction houses to the retail outlets remains a challenge.

• Water Use: Growing cut flowers requires significant amounts of water. How can water use efficiency be maximised and potential conflict between growers and other local users prevented?

• DEFRA/DFID aid and investment: combined support to ensure more holistic understanding of inter-relationship between environmental, social and economic impacts at a local level in exporter developing countries. There is a particular need to look more widely beyond worker employment conditions to more general sustainability and environmental considerations, so that UK investment and aid in developing countries achieves sustainable development at both local and national levels.

• Biodiversity - Kenya and Lake Naivasha, appear to be special cases of production focused in areas of ecological sensitivity. However, it is also emerging in the Ethiopian highlands and Tanzania’s Mount Kilamanjaro. As the UK is a major consumer, there is a strong case for more focus on protecting biodiversity impacts in countries such as Kenya arising from UK consumption.

• DEFRA controls the plant health passport system for flower imports. What can be done to ensure that these requirements do not result in increased use of pesticides harming workers and the local environment, whilst ensuring any risks to UK biodiversity etc are adequately controlled?

9 Due to the feminised labour force this can disproportionately impact upon women and ultimately children

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1 Commodity Overview10 1.1.1 Cut flowers fall within a wider product cluster – Cut Flowers, Foliage and

Ornamental Plants. The extended cluster includes live plants used for ornamental purposes, as well as seeds and bulbs. Only the limited product set – cut flowers and flower buds of a kind suitable for ornamental purposes – are covered in this report.

1.1.2 Cut flowers are defined as blossoms from flowering plants sold as stems, bunches, or arrangements. The flowers can be fresh, dried, or preserved. Major commercial varieties include standard carnations, roses, chrysanthemums, gladioli, tulips, orchids and lilies.

1.1.3 Cut flowers are highly perishable products and can only maintain very limited life-supporting processes by absorbing water (and nutrients) through their stems, and are thus crucially dependent on efficient and speedy distribution channels, and excellent cold-chain management systems. More than 200 varieties of cut flowers are sold commercially (on their own or along with other varieties) on the major world markets.

1.1.4 Growing cut flowers is a particularly specialised industry in terms of knowledge requirements. To grow flowers successfully, one often has to learn the trade over a number of years. Many flower growers learn the trade through family businesses/farms. Added to this is the incredible diversity in the product varieties (different species and breeds), different types of markets, and local conditions (soil, climate, availability of labour, finance, infrastructure, transport routes, etc.), all of which are important elements in determining whether a particular venture or industry will be successful. Some of the more important product characteristics of the cut flower industry are as follows:

• Flowers are very time sensitive. They have to reach their destined

markets in as short a time as possible (around four days). An important characteristic for the end-user buyer is the length of the flowers’ shelf-life (vase-life), which is strongly influenced by how fast the flower reaches the point of final sale.

• Flowers are very fragile, and need careful packaging and handling. The proper management and handling at cutting/harvesting, packaging and storage of flowers stages will affect the quality and durability of the product.

• Flowers are seasonal. Seasonality affects when production occurs – although hothouses can be used to mitigate this. Seasonal peaks strongly influence demand, with certain varieties more

10 Upon reviewing this section of the report World Flowers a UK private company [http://www.worldflowers. co.uk/] made the following comments. A) Use of methyl bromide is declining in Kenya and not used on farms used by World Flowers. B) The casual labour has been reduced through ethical auditing and fair trade labels. C) Waste is increasingly being recycled.

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popular in certain periods and/or for special occasions (e.g. roses for Valentine’s day). Counter-seasonality is an important factor for developing countries, as they can supply flowers to European (and other northern) markets during the seasons domestic producers are unable to. Even with hothouses, heating and lighting costs might render northern countries’ overall costs high enough to facilitate the entry of developing country producers on a competitive basis.

• Flowers depend on fashions and consumer tastes. The demand for flowers is volatile and changes dramatically depending on trends and preferences.

• Flowers are income elastic. The demand for flowers increases with increased levels of income, although this does vary by country. Flowers are also rather price elastic and as gifts compete with confectionary, jewellery and wine.

• Flower purchase has strong emotional connotations, used to mark significant events or as a symbol of love or other positive emotion. This has been used by ethical consumer campaigners to persuade consumers to pay attention to the conditions of workers involved in cut flower production.

1.1.5 Cut flowers are grown and cut as gifts and for display in homes, offices, public buildings and for special events and occasions. The main producers worldwide are the Netherlands, Colombia, Kenya and Israel, all of which are large exporters to the UK. The UK’s domestic production represents about 10 – 15% of cut flowers sold, although there is some seasonal variation, with increased UK production in spring and summer11.

1.1.6 The Netherlands is by far and away the UK’s most important trading partner in cut flowers, importing flowers worth a total of almost US$800 million in 2004. This represents 79% of all UK imports of cut flowers. The Netherlands is a major grower of cut flowers. However, the international auctions in the Netherlands mean that it is an important staging country for cut flower imports from other countries worldwide.

1.1.7 After the Netherlands, the major producer countries exporting directly to the UK in 2004 were Kenya (8%), Colombia (4%) and Spain (4%). The figures in brackets represent % of total UK imports from each country by value in US dollars, based on data from Comtrade.

1.1.8 Comtrade data on imports of cut flowers to the Netherlands show that Kenya (36%), Israel (15%), Zimbabwe (9%), Ecuador (9%) and Uganda (5%) were the major trading partners. The figures in brackets represent %

11 http://www.flowers.org/press/press-releases.htm [Accessed 14/06/02006, verified by phone call to Andrea Caldecourt, 14/06/2006]

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of total Netherlands imports from each country by value in US dollars, based on data from Comtrade.

1.1.9 Newly developing countries importing to the UK include Ethiopia and Uganda. Producers in Zimbabwe are reported in recent years to be switching production to Zambia, in order to cope with the economic crisis in Zimbabwe. Uganda is reported to be experiencing increased growth as internal conflict has been brought under control in parts of the country. Investment in infrastructure and establishment of daily international flights to ensure the cold chain can be maintained are key factors influencing where export growth happens. The production for export of perishable vegetables may be a key indicator for future diversification into the cut flowers sector, as a similar cold store chain and related infrastructure is necessary for these products12.

1.2 Uses 1.2.1 The most popular flower purchased in the UK is the carnation. Other

popular flowers include the chrysanthemum, rose, “mixed seasonal bunch”, lily, freesia, tulip, daffodil, iris and alstroemeria. However, there is increasing diversification in the choice of flowers bought in the UK. Table 1 illustrates the main flower varieties grown in major exporting countries to the UK.

Table 1: Main flower varieties grown in major exporting countries13

Country Flower varieties mainly grown Holland All flowers Colombia Standard & spray carnations, roses Ecuador Carnations, roses Israel Roses, gypsophilla, waxflower, anigozanthos, all summer

flowers Kenya Roses, carnations, spray carnations, statice Turkey Spray carnations Uganda Roses, chrysanthemums, carnations, summer flowers Zambia Roses, summer flowers Zimbabwe Roses, proteas, aster, solidago

Decoration

1.2.2 Cut Flowers are used for decorative purposes, as gifts, as arrangements or bouquets for formal events or special occasions, and as corsages or boutonnieres.

12 Telephone conversation with Andrea Caldecourt, F&PA, 14/06/06 13 Compiled from http://www.flowers.org.uk/industry/imported-origins.htm [Accessed 14/06/06]; http://www.new-agri.co.uk/01-5/focuson/focuson7.html [Accessed 20/06/2006], and Rottger, A (ed.), 2004, Strengthening farm-agribusiness linkages in Africa. AGSF Occasional Paper 6. FAO 2004. ].

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http://www.new-agri.co.uk/01-5/focuson/focuson7.html

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Gifts, special events and occasions

1.2.3 The purchase of cut flowers to mark special events or occasions or as a semi-luxury gift remains important, with Valentines Day and Mother’s Day the most significant peak days for cut flower sales. The Flower and Plants Association sales of fresh flowers increase by 48% on average sales levels on Valentine’s Day, with most imports from Colombia, Ecuador, Holland and Kenya. Valentine’s Day is celebrated on the same day worldwide, therefore over 55 million roses are traded on this one day alone14. Mother’s Day likewise causes a spike in cut flower sales, with sales increasing by 40% on average sales levels. They are purchased to celebrate holidays, in times of illness, for weddings or funerals. Demand patterns are therefore particularly seasonal and dependent on fashions.

Own consumption

1.2.4 The main area of retail growth in the UK has been an increase in routine purchase of flowers for own consumption, rather than as a gift purchase to mark a special event or occasion. Own consumption is estimated to represent 60% of expenditure by consumers in Britain. The supermarkets have expanded their total sales of cut flowers by encouraging customers to buy flowers for their own use. In a recent academic paper based on research for a PhD, Madrid (2006) reports that the supermarkets have increased their sales at over 30% per year. This growth is thought to mainly arise as a result in growth in purchases for daily consumption for people’s own use, and thus is likely to be strongly linked to people’s perceptions of their disposable income.

14 http://www.flowers.org.uk/press/press-a%20rose%20is%20a%20rose-2006.htm

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2 Supply and demand statistics and trends 2.1.1 In 2004, the UK imported 202,570,764kg of cut flowers15 from the rest of the

world. This was the equivalent of nearly $978,245,175 in terms of trade value. Table 2 below indicates the top trading partners to the UK for that year. The Netherlands is by far and away the UK’s most important trading partner in cut flowers, importing flowers worth a total of almost US$800 million in 2004. This represents approximately 79% of all UK imports of cut flowers. The Netherlands is a major grower of cut flowers. However, the international auctions in the Netherlands mean that it is an important staging country for cut flower imports from other countries worldwide16. After the Netherlands, the major producer countries exporting directly to the UK in 2004 were Kenya (8%), Colombia (4%) and Spain (4%). The figures in brackets represent % of total UK imports from each country by value in US dollars, based on data from Comtrade.

Table 2: The UK’s top trading partners

Reporter Partner Trade Value NetWeight (kg)

United Kingdom Netherlands $759,256,038 156,331,666 United Kingdom Kenya $84,432,823 16,984,909 United Kingdom Colombia $45,525,850 9,754,190 United Kingdom Spain $41,453,101 9,394,514 United Kingdom Turkey $9,273,919 3,422,994 United Kingdom Belgium $8,551,537 1,049,461 United Kingdom Italy $4,561,211 507,906 United Kingdom South Africa $3,640,392 803,420 United Kingdom Denmark $3,586,975 627,634

2.1.2 If the total exports of the UK’s top trading partners are examined, it is again clear that the Netherlands comes out the highest by a significant margin, with Columbia and Kenya again making up the highest proportion of non-OECD countries in the top 3. Noticeable in Table 3 is the fact that Colombia’s global export market is over three times the value of Kenya’s.

15 SITC Rev.3 code 29271 Cut flowers and flower buds of a kind suitable for bouquets or for ornament 16 Comtrade data on imports of cut flowers to the Netherlands show that Kenya (36%), Israel (15%), Zimbabwe (9%), Ecuador (9%) and Uganda (5%) were the major trading partners. The figures in brackets represent % of total Netherlands imports from each country by value in US dollars, based on data from Comtrade.

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Table 3: Top Trading Partners total exports of cut flowers

Reporter Partner Trade Value NetWeight (kg)

Netherlands World $3,054,421,848 0

Colombia World $703,440,520 191,574,649 Kenya World $231,889,576 81,855,559 Italy World $87,435,222 11,326,867 Spain World $80,482,550 28,308,950 Belgium World $69,641,501 9,506,762 South Africa World $21,651,676 6,024,960 Turkey World $20,170,323 9,083,949 Denmark World $11,326,083 2,257,917

2.1.3 Taking this analysis a step further, we can assess what proportion the export of cut flower makes up of the total exports for certain countries (Table 4). The figures indicate that for three countries analysed, the largest proportion of the total exports represented by cut flowers is Kenya (8.64%) followed by Columbia (4.20%) and then the Netherlands (1.05%). Table 4: The proportion cut flowers makes up of total exports from UK partners

Reporter Cut flowers as a % of all exports Belgium 0.02% Colombia 4.20% Denmark 0.02% Italy 0.02% Kenya 8.64% Netherlands 1.05% South Africa 0.05% Spain 0.04% Turkey 0.03%

2.1.4 Newly developing countries importing to the UK also include Ethiopia and Uganda. Producers in Zimbabwe are reported in recent years to be switching production to Zambia, in order to cope with the economic crisis in Zimbabwe. Uganda is reported to be experiencing increased growth as internal conflict has been brought under control in parts of the country. Investment in infrastructure and establishment of daily international flights to ensure the cold chain can be maintained are key factors influencing where export growth happens. The production for export of perishable vegetables may be a key indicator for future diversification into the cut flowers sector, as a similar cold chain and related infrastructure is necessary for these products17.

17 Telephone conversation with Andrea Caldecourt, F&PA, 14/06/06

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2.2 Major exporting countries 2.2.1 In terms of world exports, the Netherlands is by far the biggest exporter,

capturing some 56% of the world market. It must be noted, however, that most of these exports are to the EU (over 80%). Other large European exporters include Italy, Spain, Belgium and Germany; again, most of their trade is intra-EU. The Latin American countries of Colombia and Ecuador are the second- and third-biggest exporters respectively, with the majority of their exports going to the US. Kenya, the big African exporter, is fourth, with a 4% share in the world market, and growing faster than any of the top 10 countries. Asian countries with rapid growth include China (25th), Singapore (20th) and Malaysia (15th). All three feature prominently in the Japanese market. SADC countries in the top 25 are Zimbabwe (10th), SA (21st) and Zambia (24th).

2.2.2 Total world trade in cut flowers and foliage was about $6.5bn in 2004. Of this, $5.5bn was trade in cut flowers, with a five-year growth rate of around 9% between 2000 and 2004, and a two-year growth rate of just over 13%. In short, the cut flower market is a ‘blooming’ industry.

2.2.3 In regard to the UK’s strength as a global ‘player’ in the market, Table 5 below shows the share of the world imports accountable by the UK. It can be seen that the UK has the greatest share (in terms of value) of cut flower imports in the world at nearly £6m in 2004.

Table 5: Top 20 importing countries of cut flowers18

Importers Value imported in 2004, in US$ thousand

Annual growth in value between 2000-2004, %


Share in world imports, %

World estimation 5,544,720 9 13 100 1 United Kingdom 1,018,677 19 12 18 2 Germany 975,911 7 15 17

3 United States of America 886,979 4 15 15

4 France 507,385 9 5 9 5 Netherlands 491,584 4 3 8 6 Japan 218,089 7 27 3 7 Italy 191,336 7 4 3 8 Switzerland 166,293 7 6 2 9 Belgium 132,745 7 14 2 10 Russian Federation 117,322 40 98 2

18 Source: ITC Comtrade

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Case Study – CUT FLOWERS 2.2.4 The EU, with nearly 70%, dominates the world cut flower market when it is

segmented by region, followed by NAFTA and Asia. The UK has taken over from Germany as the biggest national market for imports, with 18% of the world market, followed by Germany with 17%, the US with 15%, France with 9% and the Netherlands with 8%.

2.3 Consumption trends 2.3.1 The world market for cut flowers has been growing. From 1999 to 2004,

exports of cut flowers rose by 9% and by 13% from 2003 to 2004. According to the Flower Council of Holland (2005), consumption patterns in cut flowers will continue to rise at a rapid rate, with global consumption predicted to be 30% greater by 2014. At present, global trade in cut flowers stands at roughly US$5.5-billion, of which nearly 70% is with the EU.

Table 6: Top 10 Fastest-growing importing countries19

Importers Value imported in 2004, in US$ thousand



Share in world imports, %

World estimation 5,544,720 9 13 100

1 Malaysia 2,978 50 155 0 2 Kazakhstan 2,907 47 39 0 3 Hungary 17,737 44 103 0 4 Cyprus 1,644 44 13 0

5 Russian Federation 117,322 40 98 2

6 Serbia and Montenegro 5,177 39 3 0

7 Colombia 3,213 36 33 0 8 Romania 7,307 35 30 0 9 Bulgaria 2,047 33 26 0 10 Ukraine 10,388 24 25 0

2.3.2 Historically, the major markets (particularly in the EU) have focused predominantly on the more standard, ‘everyday’ varieties of flowers – roses, carnations, etc. However, more recently there have been some shifts in demand patterns, with more unusual and/or speciality species (for example, less standard roses) finding a niche. At the same time developing countries have been able to gain a foothold in these giant markets, with countries like

19 Source: ITC ComTrade

3



Colombia and Kenya showing the way for those hoping to emulate their successes.

2.3.3 Part of these changing patterns of trade can be ascribed to increased globalisation, the lowering of tariffs, and the change in consumer tastes. However, far more important is the combined impact of advanced transport services (refrigerated aircraft) and counter-seasonality of many of the southern developing countries.

2.3.4 Whereas the developed northern countries historically had to rely on short harvest/blooming periods (especially for summer flowers) and/or expensive heating and lighting in greenhouses, many developed countries with warmer climates have harvest periods which are not only much longer but also coincide with the Northern hemisphere’s winter months. The UK’s domestic production represents about 10 – 15% of cut flowers sold, although there is some seasonal variation, with increased UK production in spring and summer20.

European Union

2.3.5 The EU consumes more than half of the world’s cut flowers, which makes it an important market for any aspiring flower exporting nation. Of the 10 biggest national cut flower markets in the world, six of them are in the EU –UK, Germany, France, Italy, the Netherlands and Spain (in that order). The auction markets in the Netherlands are by far the largest and most developed in the world, and act as a meeting point for buyers and sellers from all corners of the globe.

2.3.6 Within Europe, Germany, France and the Netherlands are considered to have reached saturation point and even showing signs of negative growth. The newest EU members (the 2004 accession countries) are growing rapidly and are expected to continue to do so.

2.3.7 The UK has grown at a rapid pace, with 20% growth in imports from 2000 to 2004, effectively taking over from Germany as the leading importer of cut flowers. The consumption level is expected to continue to rise, albeit at a projected lower rate of 5% annually (CBI 2005).

2.3.8 In the UK, flowers are increasingly bought for own use. In 2004, 48% of all flower purchases was for own use, compared with 38% for gifts and 8% bought for funerals (Flower Council of Holland, 2005, referenced in CBI 2005).

20 http://www.flowers.org/press/press-releases.htm [Accessed 14/06/02006, verified by phone call to Andrea Caldecourt, 14/06/2006]

4



Case Study – CUT FLOWERS 3 Policies and Initiatives 3.1.1 The frameworks are those political or voluntary structures that set the

operational environment for the commodity, including trade agreements, project financing, regulations concerning export or import of goods and sector-specific or wider applicable national policies. The different routes for producers and exporters to access international markets are described in section below. Policies include international and EU legislative and non-legislative requirements on imports, as well as measures to support UK production of flowers.

3.2 Trade framework and agreements 3.2.1 The World Trade Organisation (WTO) –In the past, the USA has pursued

anti-dumping cases against Colombia for its supply of cheap imports of flowers against which US producers are unable to compete.

3.2.2 EU Preferential Trading Agreements cover flower imports from Colombia. Other relevant trade agreements include the UK Investment Promotion and Protection Agreement with Kenya.

Financing of flower production

3.2.3 Project finance through medium term loans are important to the floriculture industry, particularly in those countries establishing themselves in the industry, as the up-front investments costs involved are considerable. Lenders include both international and regional development banks, including International Finance Corporation (IFC), World Bank (WB) and International Monetary Fund (IMF) and private sector banks.

3.2.4 Grants and other forms of support from international agencies have also been important, particularly for management, technical assistance and other support to establish and promote floriculture exports. DFID has provided funding to Kenya, Zambia and Zimbabwe floriculture sectors. The US Danish aid agencies (USAID and DANIDA respectively) are also involved.

3.2.5 The Food and Agriculture Organisation (FAO) as well as the Joint Integrated Technical Assistance Programme (JITAP), funded by International Trade Centre, United Nations Conference of Trade and Development (UNCTAD) and WTO have also provided technical assistance to the industry.

3.3 Policy Framework 3.3.1 Exporting flowers and plants to the EU can be a complicated business, and

it is very important that legislative requirements (product legislation) are taken into account. All flowers and plants are subject to phytosanitary regulations intended to prevent the introduction of plant pests and diseases, which are not present in the EU. Moreover, various organisations and

5



representative bodies are developing environmental as well as social standards connected to the conditions in which plants and flowers are grown and harvested. When exporting cut flowers to the EU, a number of legislative regulations are relevant:

• Plant health control • CITES regulations • Breeders’ regulations • Quality and grading • Packaging and marking.

3.3.2 There are also non-legislative requirements for environmental, occupational health and safety standards, labour conditions and other social issues, that, though not legally required, are nevertheless vitally important for potential exporters wishing to gain a foothold in the European markets.

Plant health (phytosanitary) legislation

3.3.3 The EU member nations are obligated to ban the introduction of harmful organisms into their territory. As international trade in floriculture products brings with it the risk of spreading diseases and pests, there are certain restrictions to importing such products into the EU. The legislation regarding these restrictions is laid down in Directive 2000/29/EC. The harmful organisms to which this piece of legislature refers can be insects, mites, nematodes, fungi, bacteria, viruses, or the plant/flower on which these organisms reside (CBI, 2004).

3.3.4 The phytosanitary certificate (or plant passport) is essentially a statement that the plants or plant produce or products to which it relates have been officially inspected in the country of origin (or country of despatch), comply with statutory requirements for entry into the EC, are free from certain serious pests and diseases, and are substantially free from other harmful organisms. Due to increased inception of various harmful organisms, the number of cut flower varieties requiring inspection has recently increased. Countries in the Southern African trade body (SADC) are particularly at risk of high inspection rates due to the perceived quality of produce and to the less-than-stringent phytosanitary and inspection procedures that take place at the export departure points. DEFRA manages the Plant Passport regime for imports from outside the EC to the UK. The requirements are set out in http://www.defra.gov.uk/planth/publicat/importer/impguide.pdf

CITES regulations

3.3.5 To make provisions for the protection of endangered species of flora and fauna, the CITES treaty restricts the international trade of specimens in these species. These regulations currently have a limited effect on SADC countries’ exports of cut flowers. However, the exportation of proteas and

6

http://www.defra.gov.uk/planth/publicat/importer/impguide.pdf



various fynbos species, as well as the growing demand for more unusual species of cut flowers (predominantly indigenous), may expose potential exporters to the provisions of this agreement. The lists of various prohibited or restricted species are detailed on the CITES website under three Appendixes, according to how threatened they are by international trade. More information on endangered species can be found at http://www.cites.org/.

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Breeders’ rights

3.3.6 The agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) within the World Trade Organisation (WTO) has provided an incentive for many countries to start implementing different forms of plant variety protection programmes. Research and development is undertaken to develop new varieties of flowers and to improve the performance of existing varieties – their yield, size, appearance, resistance to disease and ability to grow under different conditions and climates.

3.3.7 Royalties or licences compensate growers and institutions making significant investments in new plant varieties and improved performance. In many developing economies, structures to protect breeders are still underdeveloped. The implementation of TRIPS requires member countries of the WTO to adhere to the protection framework standards of other member countries. At present there are several protection frameworks for new plant varieties in operation:

• International level: UPOV (International Union for the Protection of

New Plant Varieties); • European level: CPVO (Community Plant Variety Office); and • Other countries: national patent registration offices.

3.3.8 Both UPOV and CPVO give (25-year) rights to breeders of new varieties, allowing them to stipulate who is authorised to commercially use or sell their particular variety (and to determine the value of royalties associated with the use), to duplicate and distribute it, and to contend an essentially derivative variety should they feel that it is too close to their own. Breeders can also apply for a European trademark (CBI, 2004). For more information see http://www.upov.int/ or http://www.cpov.fr/.

Quality and grading standards

3.3.9 The EU Regulation 316/68 prescribes minimum standards for imports to the EU. However, for practical purposes, the VBN (Federation of Dutch Flower Auctions) standards – required to participate in the Dutch auction sales – are the more relevant industry standard21.

3.3.10 The Euro-retailer Produce Working Group (EUREP) developed a framework for Good Agricultural Practice (EUREPGAP) predominantly to ensure food safety in various production chains, including the practices of farming flowers. It is a private standard, applicable when supplying a major supermarket retailer, but due to increased sales volumes of flowers in supermarket chains, it is becoming more influential. Besides these standards, importers also have their own unwritten quality standards (with

21 For more information see http://www.vbn.nl/.

8

http://www.upov.int/

http://www.cpov.fr/

http://www.vbn.nl/



European consumers being particularly demanding), and might often be biased against products originating from developing countries, assuming inferior or unprofessional production processes. The ISO 9001 quality assurance system, a highly regarded qualification developed by the International Organisation for Standardisation, is an important means of overcoming these reservations. For companies that comply with their guidelines, ISO issues certificates and allows the use of its logo on products (CBI, 2004)22.

Packaging and marking

3.3.11 EU Regulation 802/71 stipulates minimum standards for the packaging and presentation of cut flowers. The type and quality of packaging will depend on the product type, the transport needs and the individual wishes of the importer concerned. Clearly certain minimum requirements are needed to protect the flowers from damage – and thus it is an important component of the strict quality demands.

UK Support for domestic flower production

3.3.12 The UK Government, in recognition of the UK horticulture sector’s characteristics as relatively energy intensive, containing a large number of smaller companies and exposed to significant international competition, has developed a special package of measures for horticulturists, including flower growers, to improve energy efficiency in the sector. The assistance package includes23:

• A special allocation for the sector from the energy efficiency fund to

provide site specific advice; • Inclusion of thermal screens in the list of technologies qualifying for

enhanced capital allowances. Thermal screens are panels used to reduce the volume of a building to be heated during cold periods and are used in greenhouses;

• A temporary 50% discount on the levy for a period of up to five years. This is intended to give the sector some relief while anticipated energy efficiency measures take effect; and

• Some horticulturists may also benefit from the exemption from the levy for energy from good quality Combined Heat and Power plants (CHP).

Environmental, social and safety standards

3.3.13 The environmental, social and safety aspects of products and production have gained increasing attention both in producer countries and in

22 See http://www.iso.org/. 23 Source: http://www.defra.gov.uk/environment/ccl/intro.htm [Accessed 19/06/06]

9

http://www.iso.org/

http://www.defra.gov.uk/environment/ccl/intro.htm



consumer countries, particularly within Europe and the United States, with greater legislation put in place, engagement by UK supermarkets concerned about their supply chains and significant consumer movements. A number of organisations control and regulate these matters:

• Floriculture Environment Programme or Milieu Project

Sierteelt (MPS): A Dutch environmental code with an optional social chapter, which assesses and certifies its participants’ environmental performance and links with other quality standards (ISO 9001, GAP and by implication, ETI). It is currently the most widely accepted environmental standard, with 85% of flowers in Dutch auctions certified under this programme and importers being predisposed to products from companies registered under MPS (it is a business-to-business label). See http://www.st-mps.nl/.

• International Flower Co-ordination (IFC) and Flower Label Programme (FLP): Unlike the MPS, this programme labels products based on human rights and environmental standards, with an International Code of Conduct for Cut Flowers (ICC). The programme covers working conditions, child/forced labour, freedom of association, employment contracts, and health and safety standards. To date, the FLP has been used for labelling flowers sold in Germany, although there are plans to roll out to other European countries. For more information on this label and its requirements, see http://www.flower-labelprogramm.org/.

• Ethical Trading Initiative (ETI): The Ethical Trading Initiative (ETI) is an alliance of companies, non-governmental organisations (NGOs) and trade union organisations. It has developed its own base code and it also promotes the implementation of corporate codes of practice which cover supply chain working conditions. Its main focus is on towards achievement of international standards of working conditions for workers producing for the UK market. For more information, see http://www.ethicaltrade.org/.

• EUREPGAP: Many ETI members sought EUREPGAP (Euro-Retailer Produce Working Group on Good Agricultural Practice) certification of good agricultural practice by those supplying their flowers. EUREPGAP members have a set of standards for horticulture producers. Following involvement with ETI, the EUREPGAP committee have decided not to expand the worker welfare section of the flowers protocol to avoid confusion with other auditing and labelling initiatives (ETI, 2005). For more information, see http://www.eurep.org

• Fairtrade Mark24: Fairtrade standards cover social, environmental and economic development. The Mark is an independent product

24 Fairtrade Foundation, 2006, Fairtrade Roses Q&A. www.fairtrade.org.uk [Accessed 20/06/06]

10

http://www.st-mps.nl/

http://www.flower-labelprogramm.org/

http://www.ethicaltrade.org/

http://www.eurep.org/




certification label which guarantees that workers on flower farms are getting a better deal. Fairtrade roses currently come from a small number of farmers in Kenya and had an estimated retail value of over £4m in 1995. For more information, see http://www.fairtrade.org.uk

• Fair Flowers and Plants: This is a new international consumer label, conceived by an alliance of non-governmental organisations (NGOs) and trade unions, which will require adherence to the International Code of Conduct for the Production of Cut Flowers’ (ICC’s) standards. The ICC’s standards include labour and working standards (adapted from the International Labour Organisation, or ILO), health and social issues, the use of pesticides and chemicals, and environmental protection standards (sustainability, water and energy, waste and pollution).

• Labels from various other flower exporting countries: These labels certify quality and codes of conduct aspects. Some of these labels, such as the Kenyan Flower Council’s label, Colombia’s Florverde scheme and Zambia’s Export Growers Association (ZEGA) code are becoming more recognised by EU importers (CBI, 2004; Tallontire et al, 2004)).

3.3.14 The lack of code harmonisation has been identified as creating duplication of work and hence, additional costs for growers. These problems have been identified by industry bodies, auditors, growers and workers alike.

3.3.15 Workers and auditors also identified other problems with the existing auditing systems, summarised in Box 1 below:

Box 1: Problems with codes of conduct for cut flower production1

Worker identified shortfalls of Codes of Conduct (from research in Kenya) (ETI, 2005: 11) No advance awareness-raising with workers so they are unfamiliar with nature and purpose

of audit Workers unaware of their rights or entitlements Very few workers selected for worker interviews Workers interviewed in presence of management Poor contact between auditors and trade unions and local NGO representatives Auditors shown only selected areas of farm or housing facilities Workers/site prepared for audit Seasonal and casual contract workers not interviewed for audit Audits not conducted at peak season, when worst problems arise Audit results not shared with worker representatives Workers not engage in follow-up action or implementation of recommendations after audits

Auditor-identified shortfalls of Codes of Conduct (from research in Kenya) Too few female auditors, when most workers are female Gender issues not sufficiently understood by auditors Use of overseas auditors unfamiliar with local language or customs Use of auditors with technical or environmental rather than social qualifications.

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Figure 1: Supply chain overview for cut flowers

4 Supply Chain analysis. 4.1.1 This section explores the characteristics of the different stages of production

and processing of cut flowers. The supply chain analysis focuses on two areas, a general description of the supply chain, followed by country specific information for this commodity. For cut flowers, the stages of production can be split into:

• Pre-cultivation - Farm establishment • Cultivation (Production and harvesting) • Processing and Transportation • Distribution

4.1.2 For each of these stages a flow diagram is provided which shows the key inputs and main impacts of each stage of the supply chain. A commentary is also provided along with country specific information. Figure 1 below provides an overview of the supply chain for cut flowers.

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4.2 Pre-cultivation Figure 2: Inputs and outputs for cut flower pre-cultivation

4.2.1 Land suitable for cut flower production is essential, with access to good quality water for production. Climate and seasonality are important determinants in the decision on the selection of varieties for production.

4.2.2 The availability of a plentiful and cheap labour force has acted as a major advantage for producers in developing countries seeking to compete with established European producers. Skilled and experienced personnel are also required, who are often, at least initially, predominantly expatriate staff in developing countries. Increases in labour costs, such as in Colombia as a result of successful unionisation and demand for improved wages and benefits, are seen as potentially reducing the competitiveness of producers compared with new competitors (Madrid, 2006)

4.2.3 Flowers can either be grown in open fields or in a protected environment (tunnels or greenhouses). Open field cultivation is often used for indigenous varieties, or for more robust flowers – cost being the obvious advantage – but also shorter (and easier) set-up times. Open field cultivation is much more feasible for southern or warmer regions with more suitable climates.

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Case Study – CUT FLOWERS 4.2.4 The environment is essential to achievement of quality products. Protection

from wind, rain, sun, pests and diseases are important for successful flower growing. Worldwide, most flowering plants are grown under cover or in some form of protected environment, such as greenhouses. Greenhouses also enable more efficient water use and other means of manipulating plant growth – with sensors installed in or around plants in greenhouses, the timing and dosage of watering, lighting, heating and fertilising allow for shorter production cycles. Hothouses are used to extend harvest periods, although heating and lighting costs are often prohibitive. Hydroponic production systems are also becoming more common.

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4.3 Cultivation Figure 3: Production and harvesting inputs and outputs

Farm Inputs and Maintenance

4.3.1 Soil type, including minerals and nutrients content, pH level and other variables and water nutrient levels are important inputs to flower production. Fertilisers and other inputs are used to achieve optimal soil and nutrient conditions.

4.3.2 Irrigation is crucial to flower growing. A report entitled ‘Investing in Uganda’s Floriculture Industry’ identified that ~60,000litres/hectare/day is needed.

4.3.3 Water quality (pH levels or hardness of the water, and whether it is filtered or chlorinated), irrigation techniques (overhead or drip irrigation), and drainage/run-off all require careful management. Hydration, including fogging and spraying, is used to protect cold-sensitive plants from frost. In hot weather, plants are irrigated in the early morning or late evening to limit evaporation. In greenhouses, automated ventilation and humidification help to achieve optimal growing conditions.

4.3.4 Fertiliser is another vitally important component in the growing process, with both artificial and organic types available.

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Case Study – CUT FLOWERS 4.3.5 Fungicides are a key input for control of pests and diseases, both to reduce

crop loss and to ensure compliance with EC requirements for plant health standards. Methyl bromide - which is a powerful soil fumigant - is being phased out under an international protocol to safeguard the ozone layer (methyl bromide is on the list of banned ozone-depleting substances of the Montreal Protocol). Developing countries have agreed to phase out methyl bromide by 2015, with its use frozen at 1998 rates in the meantime. Integrated pest management systems provide an alternative for methyl bromide. The choice of chemicals or disinfestations techniques used can determine whether a grower is able to sell his/her produce on the world markets, particularly to European markets).

4.3.6 Herbicides are used to control weeds. The use of registered herbicides can be important to ensure compliance either with national regulations or with international environmental codes of production.

4.3.7 The labour-intensive nature of plant production, with many tasks involved in successful planting, grooming, pruning and cutting, which cannot easily be mechanised, requires the input of a large manual labour force. The tasks involved require high levels of dexterity, concentration and decision-making. Tasks include bed preparation, planting, spraying of pesticides and irrigation, disbudding, training the plants growth direction, weeding, cultivation, mulching, pruning, and cutting the flowers.

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4.4 Processing Figure 4: Processing inputs and outputs

Post-harvest handling

4.4.1 Labour inputs are key to the post-harvest process. The tasks involved after cutting flowers include classifying, packing and labelling. Again, these tasks require high levels of dexterity, concentration and decision-making. The seasonal peaks in demand can result in round-the-clock demand for labour in the packing and grading houses.

4.4.2 Cut flowers are highly perishable and their shelf life depends on careful handling. Upon harvesting, flower stems are immediately placed in lukewarm water containing a floral preservative (a solution of sugar, other nutrients and a bacteriacide). The cut flowers and greens are then stored in coolers overnight for later classifying, or they can be left outside in a cool location.

4.4.3 Different varieties of flowers need to be harvested at different opening or ripening stages, also dependent on market demands, and packaged differently. One of the most important elements is an efficient and unbroken cold chain system. Incorrect harvesting, packaging or storage can lead to

17



flower senescence (looking older), wilting, leaf yellowing or shattering (loss of leaves/petals).

4.4.4 In country storage is usually maintained in refrigerated storage warehouses. The infrastructure of roads, cold storage facility, and refrigerated trucks and shipping containers is essential in developing countries producing cut flowers for export. Refrigerated aircraft ship flowers from international locations. For developing countries exporting to Europe, the availability of regular (ideally daily) international scheduled flights can be a crucial factor in the viability and competitiveness of the sector in the international trade.

4.5 Trading and Distribution 4.5.1 There are four main routes for growers and exporters to access international

markets: directly through auctions, using an agent to sell your produce at an auction, via an import wholesaler, or directly to a retail chain.

Auctions

4.5.2 All types of flowers are sold at the international auctions. The Dutch auctions are very important for supply of cut flowers to the UK. By concentrating demand and supply forces, they act as a price-setting mechanism Flowers are sold at the market price with secure payment. The auctions tend to work with larger producers of the ‘mass-produced’ greenhouse varieties. Suppliers need a licence that stipulates a particular variety to be supplied over a specific time period to the auction.

Auction via agent

4.5.3 Via an import wholesaler Agents are able to take on responsibility for roles such as re-hydrating, packing and transferring the flowers from the airport to the auctions for supply to the auctions, as well as providing a consultancy and marketing information role on behalf of exporters without representation in the Netherlands. They can also play a role in facilitating relationships between growers and supermarket chains or foreign importers. Agents are often more suited to smaller producers with less knowledge and/or marketing ability.

Via an import wholesaler

4.5.4 Import wholesalers provide an alternative to the auctions, sourcing the particular products they require without long-term contracts. Risks associated with import wholesalers include quality claims, volatile demand and payment issues. Overall the wholesaler function is becoming more important and more concentrated, as these companies achieve multinational scale, supplying all the major world flower auctions, in part strengthened by growth in online e-commerce.

Directly to a retail chain

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4.5.5 More and more retail chains, including supermarkets, DIY department stores and garden centres purchase flowers directly from growers, bypassing the auctions, agents and wholesalers altogether. In the UK, the major supermarkets (Tesco, Sainsburys, Morrisons, Asda, Marks & Spencer) have increased their structural share of the market. Their purchasing power and capacity enables them to co-ordinate transportation and other logistics and set up supply chains. Their direct link to retailers also enables them to play a much more influential role in terms of environmental and social conditions of production of flowers along their supply chain. The commercialisation of flowers in ready-made mixed bouquets for sale in supermarkets and other retail outlets assembled in producer countries also offers further opportunities for economic benefits to these countries.

4.6 Country – specific information

Kenya2526

4.6.1 Kenya is the largest supplier to the UK after the Netherlands. It has experienced rapid growth and is a major foreign exchange earner for the country, accounting for nearly 9% of Kenya’s total export earnings. Horticultural trade policy is mainly driven by grower and exporter interests and government pursuit of foreign exchange and currently does not cover worker’s labour rights. The main stakeholders in the Kenyan cut flower industry are illustrated in figure 5

25 Compiled from Omosa et al (2005), Opondo (date unknown?) and Thoen et al (forthcoming) 26 Upon reviewing this section of the report World Flowers a UK private company [http://www.world-flowers.co.uk/] made the following comments. A) Use of methyl bromide is declining in Kenya and not used on farms used by World Flowers. B) The casual labour has been reduced through ethical auditing and fair trade labels. C) Waste is increasingly being recycled.

19


Case Study – CUT FLOWERS Figure 5: Main stakeholders in Kenyan flower industry27

.6.2 Flower production is largely concentrated around Lake Naivasha, to the

4.6.3 er exports

4.6.4 ditionally exported carnations and roses but

4north-west of Nairobi. The industry is labour-intensive and is the source of direct employment for 100, 000 people and indirectly for a further 2 million, via auxiliary industries and related economic activities. There are around 500 commercial flower growers in Kenya. However, approximately 75% of Kenya’s cut flower exports are grown by about two dozen large and medium scale producers. Such operations range in size from 20 to over 100 hectares, with workforces of between 250 and 6000 (Thoen et al, forthcoming). Much of the remaining flower production is by smallholders in open plots of less than half a hectare. These growers face challenges in quality of production, adding further difficulties to the considerable infrastructural problems of linking smallholders to export markets.

As discussed above, by far the greatest proportion of Kenyan flowgo to markets in Europe. In the UK, the major supermarkets have simplified their horticultural supply chains by establishing direct links with producers. Although supermarkets continue to buy flowers through the Dutch auctions, direct trade with growers or their import agents has gained considerable importance over recent years.

Kenya’s flower industry has trathe need to maintain profitability has encouraged many growers to diversify into other flower crops and value adding services such as packaging flowers directly for supermarket shelves.

Uganda28

27 Source: Omosa et al (2005) The Social Impact Of Codes Of Practice On The Cut Flower Industry In Kenya Final Report August 2005. Unesco/Unitwin Chair University Of Nairobi.

KENYA

LOCAL COMMUITIIES

WORKERS HOUSEHOLDS

WORKERS: Female/male Permanent Seasonal

EXPORTERSorters

PRODUCER COMPANIES Code adopters & non-adopters Owner/managers

RETAILERS

IMPORTERS/ Overseas buyers Dutch Flower Auction UK Multiples etc

☺ ☺☺☺☺

☺☺☺☺☺☺

CONSUMERS

EXTERNAL ACTORS: PRIVATE SECTOR: Code setting bodies (MPS, FLP etc)

Donors (DFID, USAID, Royal Netherlands Embassy. Academics, WTO, COMESA, International NGOs (ETI etc)

(KFC, FPEAK, AEA, HEBI etc)

CIVIL SOCIETY: NGOs (KEWWO, KHRC, WRA); Trade unions (KPAWU); Media; Researchers; Environmental groups

PUBLIC SECTOR: Ministries: Agriculture (HCDA, Kenya Agricultural Research Institute); Trade & Industry; Labour – Directorate of Health and Safety Services; Environment & Natural Resources. Export Promotion Council. Pest Control Products Board, Kenyan Bureau of Standards, Kenya Plant Health Inspectorate Services.

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Case Study – CUT FLOWERS 4.6.5 newly emergent country in terms of cut flower production, first

4.6.6 s a total land area of over 39 million hectares, of which 33.3 million hectares are used for agricultural purposes. Horticultural crops ranks

Uganda is aestablished in 1993. However, it has expanded rapidly in terms of number of farms, area of output, employment and export of flowers. Flower exports accounted for 2.82 % of total export earnings in 2000. The key players are mainly exporters who are flower producers selling in local and international markets. High entry and operation costs pose a barrier to smallholder farmers and smaller companies. The Uganda Floriculture Association (UFA) was created to bring together all flower producers and dealers and to promote floricultural production. Project financing and grants from international agencies have been important to the establishment of the industry. An Ugandan Flower Exporters Association (UFEA) publication to promote investment in the industry identifies its competitive advantages in terms of affordable land, climatic conditions, reliable water supply around Lake Victoria, availability of imported inputs as well as abundant affordable human resources, with investment in developing skilled expertise and technical support as well as established international flights and infrastructure to maintain the chill chain needed for successful production and export. Roses are the main flower grown in Uganda. As in Kenya, it is a female-dominated industry, with 75% women employees.

Zimbabwe29

Zimbabwe ha

sixth amongst the important cash crops contributing to foreign exchange earnings, with the EU as its main export market. Three main policy frameworks affecting agriculture performance in Zimbabwe in the past two decades include the “growth with equity programme”, which sought to redress the colonial legacy in favour of communal farmers; “structural adjustment market-oriented reforms” adopted in 1991 and the “fast track land resettlement and redistribution” started in 2000. Zimbabwe has undertaken trade liberalisation and is a member of the WTO, the ACP-EU Cotonou Agreement and regional trade arrangements. Current diplomatic rows with the EU have culminated in the imposition of sanctions, which are considered likely to result in a serious deterioration in export market access for the country’s products. The severe economic crisis experienced in Zimbabwe in the past 3-4 years has resulted from shocks to agriculture, in the form of land invasions, bad rainfall patterns and poor economic management, combined with policy credibility problems. Until the land invasions, horticulture was growing as an export product. The withdrawal of several airlines from Zimbabwe has affected the industry’s growth. The floriculture sub-sector has however been amongst the least affected by the economic crisis, primarily because it is capital intensive and growers are

28 Compiled from UFEA (2000?) Investing in Uganda’s Floriculture Industry. Uganda Flower Exporters Association and Dannson et al, 2004, Strengthening farm-agribusiness linkages in Africa: Summary results of five country studies in Ghana, Nigeria, Kenya, Uganda and South Africa. AGSF Occasional Paper 6. FAO, Rome. 29 Mostly drawn from Tekere, M., 2005, Zimbabwe. FAO, produced by Trade and Development Studies Centre, Harare, Zimbabwe. http://www.fao.org//docrep/005/y4632e/y4632e0y.htm [Accessed 19/06/2006], with additional information from telephone conversation with Andrea Caldecourt, F&PA, 14/06/06

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4.6.7 t flower production, mainly of roses, is closely tied to production evident whether figures quoted also include

4.6.8

4.6.9 Trade Hub, together with USAID.

less able to switch to alternative production. Whilst commercial growers have increasingly switched to cash crops away from cereal crops, which is likely to have included switches to flower growing, on land seized, commercial production has switched to subsistence production. This has particularly been the case in land most suitable for horticulture production, close to towns. It is also reported that flower producers in Zimbabwe have switched production to neighbouring Zambia. Little more detailed information on flower production in Zimbabwe has been identified, despite its relative significance to the country’s export earnings.

Zambia30

Zambian cuof vegetables. It is not alwaysvegetable production, as well as flower production. The most clearly disaggregated data is provided in a Natural Resources Institute report. This identified overall horticultural sales from Zambia as worth US$55 million in 2001/2002, compared with US$68.5 in 2000/2001, with the fall resulting from a drought, which affected vegetable production more than flower production. Area under production totalled 195 ha in 2001. Production of roses is concentrated around Lusaka. Zambia is reported to have just 22 flower farms of commercial scale (NZTT, direct communication 2003, reported in Smith et al, 2004). The majority of production is exported to Europe, mostly via the Holland auctions.

The horticulture industry employs almost 10,000 people (Tallontire et al, 2004) although in 2001, it employed over 12, 000 people. The decline was reportedly due to drought.

In 2005, a trip to investigate growth options in the cut flower export sector was undertaken by the Southern AfricaThis identified weaknesses in sector financing, cold chain infrastructure and the recent loss of the weekly British Airways cargo flight, which had carried 40mt of cut flowers and fresh vegetables to Europe. This recent news had attracted local concerns of export losses and job cuts. However, this was regarded as a temporary problem, whereas the major constraint was identified to be the limited volume of air cargo shipped to and from Zambia. HIV/AIDS workplace programmes for the horticulture export sector were seen as a pre-condition for market entry and a fundamental matter for trade competitiveness. It is anecdotally reported that Zambia may have benefited to some extent from growers operating in Zimbabwe switching production to Zambia, in response to the economic crisis in Zimbabwe31.

Colombia

30 Compiled from Sikazwe, D., 2001, ‘Zambian flower exports set to soar?’ New Agriculturist. http://www.new-agri.co.uk/01-5/focuson/focuson7/html [Accessed 20/06/2006] and CARANA Corporation, 2005, Southern Africa Global Competitiveness Hub Trip Report – Value Chain Support to the Floriculture Export Sector in Zambia and Horticulture Marketing Firms in South Africa. USAID 31Telephone conversation with Andrea Caldecourt, F&PA, 14/06/06

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Case Study – CUT FLOWERS 4.6.10 lombia exported US $ 899,9 million, 80% of these to the USA,

4.6.11 on the main countries being investigated varies

n and tendency to

In 2005 Cofollowed by the UK buying US $37 million’s worth of flowers. Cut flower production in Colombia has been promoted by the International Monetary Fund (IMF) and the World Bank (WB), with the state providing low interest credit and tax and tariff advantages. Production is concentrated around the capital Bogotá, near to the international airport for export. There are approx. 500 companies producing on 4900 hectares. The industry employs an estimated 80-90, 000 people directly and 5 -8000 indirectly, mainly in packaging and transportation. The labour force is estimated to be 65% female. Migrant labour forms a significant part of the labour force - both voluntary migration, by workers seeking alternatives to agricultural livelihoods and landlessness, and involuntary, following displacement by political violence. Family-owned plantations have increasingly become concentrated into smaller ownership. The US multinational Dole is reported to own 25% of the producing companies (Mellon, 2004:2).

Robustness commentary

The background informationin its reliability. The information relies on secondary data from a mix of academic papers, campaigning organisations and industry and code of conduct bodies, identified via web searches. It has proved hard to access information for certain countries, particularly for Zimbabwe, Zambia and Ecuador. This is likely to reflect the immaturity of the sector in Zambia, the economic crisis in Zimbabwe and weaker leaks with Ecuador. It is likely that more information on Colombia and Ecuador is available via US sources, with which the researchers are less familiar. Academic papers on the cut flower sector appear to rely on personal communications, for example with export associations, to identify even key factual information, such as the scale of the industry. A number of more generic factors are considered likely to impede availability of robust data on the sector:

• The close relationship with vegetable productiogroup these together as ‘horticultural production’

• Inconsistent classification of cut flowers at a country level, as an explicit category of agriculture or as a non-edible product

• The relatively small areas of production involved in flower production compared with other types of land use, including other forms of horticultural production

• Grower and industry body concerns about putting information in the public domain, shared by workers who are concerned about the risks of consumer boycotts of products affecting jobs. This fear appears to be well-founded, since a number of western NGOs and environmental publications have promoted consumer actions to avoid purchase of cut flowers imported from Kenya and other countries on the grounds of environmental and/or social issues (air

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miles – climate change; negative social impacts for workers; water use in drought-ridden countries)32

5 Impact Assessment. 5.1.1 The impact for each stage of the supply chain for cut flowers imported to the

UK is described, with the focus mainly on impacts in countries of production. The assessment mainly draws on information based on studies in Kenya and Colombia, due to the greater availability of such information. Where possible, likely implications in other producer countries and for the overall sector are identified. For each lifecycle stage, assumptions and uncertainties that affect robustness are briefly identified. The definition of environment for this study captures social and economic impacts.

5.1.2 The production and packing stages of cut flower production involve a number of stages which are more detailed in terms of the tasks allocated to workers. However, the social and economic impacts associated with cut flower production have mainly been addressed overall, rather than broken down in relation to the different stages and tasks. The most labour intensive stages are identified as production and pack-house/grading. Other work sections identified include spraying, irrigation & fertilisation, maintenance, harvesting, office, trial/experimental and kitchen/welfare. For the purposes of this study, these are addressed under ‘production’.

5.2 Pre-cultivation: Farm Establishment

Landscape impact

5.2.1 In Colombia, the landscape in the mountain plateau, on which Bogota lies 2600 m above sea level, has dramatically changed as a result of the amount of plastic used for the greenhouses. The increasing use of greenhouses in developing countries producing for export, where quality control and measures to intensify production are paramount to competitiveness, it is likely that similar landscape impacts will be felt. The effects are likely to be particularly significant in areas of cultural heritage, ecological significance or tourist areas.

Land use – impact for local people’s access to natural resources

5.2.2 The requirement for a plentiful supply of water as well good transport links to grow and transport flowers means that plantations or farms are likely to be located in areas of high population density and hence compete with demand for land for housing or agricultural uses. Additionally, in areas of ecological sensitivity, such as Lake Naivasha in Kenya, it is possible that

32 For example, see http://www.foe.co.uk/resource/briefing_notes/50_climate_top_tips.pdf [Accessed 21/06/06] and http://www.theecologist.org/archive_detail.asp?content_id=230 ([Accessed 21/06/06

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http://www.theecologist.org/archive_detail.asp?content_id=230



pollution or water abstraction could result in indirect impacts for local people’s access to natural resources, such as fish or plants gathered for subsistence or economic purposes. It has proved difficult to identify information on such impacts. One case referenced is of the Okiek people being moved off land in the Tinet Forest of Olenguruone to make way for a new flower farm (Hargreaves-Allen, 2003).

5.2.3 Because of the need to minimise journey times between packing-plant and air terminal, the most favoured areas for development of cut flower cultivation - particularly entrepreneurial, private-individual developments - are on the fringes of principal cities, often where rural immigrants have established unofficial settlements and squats. The competition will be particularly marked in places where there is prized access to water supplies. Inevitably, the squatters are evicted, regardless of any rights to occupancy of the land that may have been established over time. Thereafter, subsequent to the primary social effects, there are inevitable, spillover, environmental impacts of displaced communities moving on to further, and unstructured settlements. Such impacts do not appear in official statistics.

Improvement/mitigation options

5.2.4 Impact assessments prior to establishment of farms provide a potential way to identify risks and identify mitigation measures. Where indigenous peoples are affected, national and international laws to protect their rights should be respected. Measures to reduce pollution and environmental impacts are likely to reduce impacts on people’s access to natural resources. Where these contribute significantly to livelihoods and food security, their involvement in design of improvement or mitigation measures would improve the appropriateness of solutions. No examples have been identified of social and environmental impact assessments being undertaken prior to establishment or expansion of cut flower farms.

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Case Study: Lake Naivasha The case study of Lake Naivasha in Kenya in the principal floriculture area of Kenya showsthe inter-related impacts on flower production on water quantity and quality, biodiversity,other economic activities and access to water and for neighbouring communities. Lake Naivasha supplies water to an estimated 75% of the flower farms in Kenya. The lake is theonly freshwater ecosystem in the Eastern Rift valley. It was designated as a RAMSAR site in1995. The Lake and its surrounds are fragile with dynamic ecosystems and a yet uncertain waterbalance in a basin surrounded by intensively irrigated agricultural land and a fast growingtownship. It is unusual that such intensive farming is carried out within a Ramsar Site, utilizing the lake’sfresh water for irrigation. Water is mainly pumped directly from the lake although borehole wateris also used. Increasing human pressures are the major threat to Lake Naivasha. The overuse of water by irrigation farms around the Lake has contributed to the decrease in watervolume, as rainfall has not been reliable around the Lake. A heavy rainfall event in 2000reportedly resulted in fertilisers and other chemicals being washed into the lake, causingeutrophication, and subsequent death of fish and fish-feeding birds. Environmental groups at aKenya Human Rights Commission conference in 2002 reported that local hippo populations wereunder threat (FAO, 2002). This claim is supported by evidence in the Ramsar information reportfor the Lake. The industry also indirectly contributes to demands on the lake and pollution of the water from thegrowing population living in townships whose growth has been generated by migrant labourseeking work on the flower farms. Employee residential areas constructed by thefloriculture/horticulture firms contribute to demand for water from the lake. Additionally,approximately 40,000 more local workers work within the Ramsar Site during the day, mainly infloriculture, but have their homes outside the area, within a 1 or 2 km distance from the Ramsarsite. The lake supports a productive fishery that is conducted for both domestic and commercialpurposes. Commercial fishery makes an annual production of 75 tonnes valued at Kshs 2.5million. The Lake also supports tourism and geothermal power generation from deep-rootedstream jets among other economic activities. These other economic activities, including fisheriesand tourism are potentially threatened by the impacts of the flower farms on the Lake. Improvement/mitigation measures adopted A water management plan for Naivasha Lake, which includes the concept of sustainable

development, wise use of scarce resources and voluntarily adopted codes of conduct. Mitigation measures adopted in relation to the flower industry include use of safe, degradable

pesticides, as per the guidelines of the Lake Naivasha Grower’s Group and Kenya Flower Council Codes of Conduct (ongoing), affected through farm audits. Additional mitigation measures identified but not yet implemented include: Control of water uptake, first by getting to know how much is abstracted from the lake,

rivers and aquifer, and by working closely with the Water Dept. Minimizing fertilizer use (promoting organic farming, composting, crop rotation) Promoting proper urban planning and development on the part of the Municipal council,

as relates to solid waste management, water supply and sewerage, and storm water. The Fairtrade premium from sale of fair-trade roses has supported projects to drill boreholes inlocal villages to supply water. The Fairtrade Foundation report that Fairtrade certified farms haveinitiated building and refurbishment programmes to increase and improve the quality of housingstock. However, it is not clear if this includes measures to address issues of water supply andpollution.



Air pollution and climate change

5.2.5 Methyl bromide is a broad-spectrum fumigant used worldwide for the control of soil borne pests. When used as a soil fumigant, methyl bromide gas is usually applied to the soil before the crop is planted and the soil is then covered with plastic tarps. The treatment effectively kills various soil organisms, but once the tarps are removed, part of the gas will eventually enter the atmosphere. The presence of bromine in the atmosphere is significant due to its strong ozone-depleting action. For this reason methyl bromide use will be reduced and phased out completely by the end of the year 2015.

5.3 Cultivation: Cut Flower Production and Harvesting

(Estate/Small Outgrower)

5.3.1 Chemical inputs (fertilizer, weed-killer, pesticide) – campaigners against the cut flower industry make various claims about the use of chemical inputs, for example that the Colombian flower industry uses 200 kg of pesticides for each hectare of flowers under cultivation, that Ecuadorian rose producers typically use six fungicides, four insecticides, three nematicides and several herbicides (Hargreaves-Allen, 2003).

5.3.2 In addition to the liberal use of a cocktail of chemical inputs, there are claims that many of the chemicals used are unregulated. The use of methyl bromide is identified as contributing to problems of greenhouse gas emissions, thus contributing to climate change. It is claimed that Kenya spends up to 5% of its foreign exchange earnings on methyl bromide (Hargreaves-Allen, 2003).

5.3.3 Poor handling of chemicals in the cut flower industry is reported to lead to poisoned waterways and groundwater and subsoil pollution (Hargreaves-Allen, 2003).

5.3.4 Exposure to chemicals is identified in academic papers on the social impacts of the cut flower industry as one of the major concerns raised in worker interviews. These impacts are addressed in more detail in relation to the impacts for health of workers (Smith et al, 2004). However, the findings of these more robust reports would appear to lend credibility to the claimed environmental impacts resulting from the use of chemicals in cut flower production.

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Improvement/mitigation measures

5.3.5 In Colombia, the Flor Verde code of conduct of the employers association Asocolflores reported that the use of active ingredients of pesticides per year per hectare has been reduced in their pilot farms to 115 kg33.

5.3.6 Integrated Pest Management (IPM) approach has been promoted as an alternative to use of methyl bromide. FAO and UNEP have developed an extension trainer of trainers to train extension workers and other agents who work closely with farmers using methyl bromide to adopt IPM as an alternative.

Water use, pollution and biodiversity impacts

5.3.7 Abstraction of water for irrigation for cut flower production can affect groundwater levels and water levels in surface water supplies in areas of production, with consequent effects on the landscape, on water supplies for neighbouring communities and on biodiversity. Serious water pollution can result from the use of surface water (e.g. from lakes and rivers) for irrigation of cut flowers. Excessive irrigation can lead to salinisation, because salts contained in irrigation water accumulate in the soil as the water evaporates or is used by plants. Plants can tolerate salt in limited concentrations, but heavy soil deposits can make land infertile. The excessive use of fertilisers and other chemicals can result in eutrophication of water supplies.

5.3.8 The biggest infrastructure impact of cut flower cultivation is in the use of plastic. Under tropical sun, the light-transmission of ordinary polyethylene film is more than good enough to allow its use to cover crops (glass is not popular, it is expensive and where used it is not unusual to have to have black-net shading installed inside the house in order to cool the environment and prevent crop scorching). Unfortunately, plastic usually lasts just 2 seasons, 3 at most depending on the weather. Cut flower cultivation in developing countries can be a significant producer of waste plastic, therefore. In developed economies there are usually regulations governing its disposal, as well as its original specification – for biodegradability, for example. This is not usually the case in the countries under focus in this paper.


5.3.9 Wider management plans, which cover all flower producers, as well as other sources of water abstraction and water pollution, are an important way to ensure impacts are addressed in an integrated way.

5.3.10 Measures to make efficient use of water can reduce impacts on groundwater supplies and water pollution. The collection and re-use of used water is one way to save water. Drip irrigation is another technique to

33 Reported on FIAN website http://www.fian.de/fian/index.php?option=content&task=view&id=177&Itemid=50 [Accessed 21/06/06]

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achieve improved irrigation efficiency. This can be particularly important in arid and semiarid regions. Soil salinisation is also less of a threat when reducing the amount of water consumed. Purification and re-use of water which is polluted during the cultivation of flowers and plants can minimise water pollution.

Air pollution

5.3.11 Air pollution is likely to be an impact, particularly as a result of fumicide and pesticide spray application. (more info needed). The impacts on human health of exposure to chemical sprays, including in enclosed greenhouse environments, are better documented in relation to the flower industry.

Energy and climate change

5.3.12 Growing in heated greenhouses occurs in countries where the climate is too cold, too dry or too irregular or where nighttime temperatures drop, particularly at higher altitudes. The tendency for cut flowers to be grown at altitude in developing countries (Kenya, Ecuador, Colombia) means that night time temperatures can be cooler and growers may use heating at night to accelerate growing. Furthermore, in hotter countries, flowers and plants are cultivated in cooled greenhouses, because the outside temperature is too hot. Keeping flowers in a heated or a cooled greenhouse requires a large amount of energy. In most cases, energy is generated by burning fossil fuels

5.3.13 The UK government recognises that horticulture is an energy intensive sector and has put in measures to support the sector to reduce this impact. Industry bodies supporting production in developing countries have argued that production in colder countries requiring use of heated greenhouses result in climate change impacts at production stage that are greater than the CO2 emissions resulting from imports flown in from developing countries. However, robust data behind these claims do not appear to be readily available in the public domain. Additionally, the fact that both heating and cooling of greenhouses also occurs in developing countries is likely to undermine this claim to lesser impacts for energy consumption and climate change.

Improvement/mitigation options

5.3.14 The use of movable screens can achieve energy savings as well as provide crop protection and improve the local climate. A movable screen allows most control of temperature, humidity and light conditions in greenhouses. The impact of the energy use and the contribution to the Greenhouse effect can be reduced by using CO2 as fertiliser to make the flowers grow faster. In countries with hotter climates, the use of alternative forms of energy to cool greenhouses offers a potential means to reduce climate change emissions.

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Case Study – CUT FLOWERS 5.3.15 In Kenya, Oserian flower farm has taken advantage of geothermal energy in

Africa’s Rift Valley to heat its greenhouses through the night. Other countries that could potentially take advantage of this energy include Ethiopia, Uganda and Zambia. However, the set-up costs are high – Oserian were able to take advantage of existing abandoned wells drilled by the national power company.

5.3.16 In the UK, the government provides support to the flower-growing sector to support more energy efficient production of cut flowers in order to enable producers to compete in the sector. (See paragraph 3.3.12).

Soil erosion

5.3.17 Soil erosion is likely to be an issue in the vicinity of steep slopes such as the high altitude growing areas of Colombia and Ecuador. An ILO report (2000) comments that soil erosion is an issue for smallholder farmers rather than larger plantations. However, little data has been identified that specifically identifies soil erosion as a concern.

Economic – impact for diversification of economy / employment creation

5.3.18 The labour intensive nature of the flower industry has been a major factor in its promotion in developing countries, as a positive impact for employment creation, including for landless people and as an alternative to non-viable subsistence livelihoods. The sector in particular has had a positive impact for female job creation. However, much of the employment is on a temporary, seasonal or casual basis, reducing the positive benefits for employees and increasing vulnerability to shocks, particularly when employment benefits are reduced for non-permanent employees. Table 7: Estimates of employment in export horticulture in Kenya and Zambia34

Total employment % temporary, seasonal, casual

% female

Kenya 40,000 – 70,000 65 75 Zambia 2,500 32 35

5.3.19 There is evidence that jobs created by the sector are relatively well paid in countries where significant numbers of people are living below the poverty line. For example, rates in Kenya and Zambia are reported to be mainly at or above the national minimum wage (Smith et al, 2004:11; Tallontire et al, 2004: 37-38). These positive benefits for female employment are particularly significant in countries where the feminisation of poverty is a factor, such as Kenya, where 55.4% of the population were reported to be living in poverty in 2001, with a national target to reduce the proportion of people below the absolute poverty lines (Kenya and $1PPP) by 10% by 2006 from 57% in 1999 (IMF 2005 – poverty reduction strategy paper ) and

34 Source: Smith et al (2004) – This report references a number of sources, including direct communications with exporter bodies NZTT and KFC in 2003

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women are overrepresented amongst the poor. However, studies on the impact of codes of conduct based on worker interviews identify that wages do not provide a living wage i.e. are not high enough to cover the essential needs of a family, including housing, children’s education and food (Smith et al 2004:10-11; Tallontire et al 2004: 38-39). Similar findings are reported for Colombia, where the national minimum wage US $150 ($2/day in 2002) is reported to meet 45% of family’s basic needs, other costs covered by loans and other income source (Madrid 2006).

5.3.20 The contribution to foreign currency earnings for developing exporter countries is the other main indicator of the positive impact of the cut flower industry available. These contributions are significant (see data on significance, due from Comtrade). These positive economic benefits at a national level can be assumed to translate into developmental benefits, such as increased national food security or improved education, in countries where good governance is in place. However, where there are serious concerns about issues of good governance, particularly in terms of use of national finances, these economic benefits cannot be so easily assumed to translate into sustainable economic benefits. Arguably, this is a factor in Kenya, Zimbabwe, Ecuador and Colombia (see http://www.transparency.org/policy_research/surveys_indices/gcb/2005).

5.3.21 The phenomenon of temporary, seasonal and migrant workers employed in the cut flower industry has impacts for economic security, labour conditions and inequality for workers.

5.3.22 A workshop paper (Madrid, 2006) on the industry in Colombia identified a preponderance of short fixed-term contracts, despite the fact that many employees work continuously in the same plantation for years. The use of subcontracting through individuals or companies known as contratistas to hire women workers on a daily basis is seen as a way for growers to avoid bearing responsibility and costs of worker benefits.

5.3.23 A UNESCO/UNITWIN produced report on the Kenya cut flower industry (Omosa et al, 2005) found that whereas 67% of code-adopting farms have predominantly local labour force; 67% non-adopting farms have predominantly migrant labour. This difference is reportedly due to local ownership of code-adopting farms, compared with foreign investors non-adopting farms buy land in settlement schemes, resulting in migration for employment. The report also found that on code-adopting farms 92% workers are permanent as compared with 36% in non-adopting farm. These differences indicate that codes of conduct can have a positive benefit f the economic security, labour conditions and inequality for workers.

Vulnerability to natural or human induced shocks

5.3.24 Vulnerability to external shocks is most directly addressed within academic studies on the impacts of code of conduct with reference to security of employment. The reliance on temporary or seasonal workers and the inadequate protection against unfair dismissal, even for permanent

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employees, indicate that the cut flower sector does not provide strong protection for employees against shocks. The example of the fall in employee numbers in Zambia as a result of drought likewise suggests that the industry is risky for workers. Nevertheless, the observation that the industry has been less affected by economic and natural shocks, such as economic crisis in Zimbabwe and drought in Zambia suggest that workers in the sector are less vulnerable than in other sectors of the economy.

5.3.25 A major potential external threat to workers is identified in vulnerability of the sector to consumer boycotts of the industry. Labelling and codes of conduct have been adopted partly in response to this threat to jobs in the sector. However, since the codes and labelling mainly cover impacts in relation to environment and to workers, there remain threats in relation to the wider social and economic impacts attributed to the industry. Likewise, there remain threats where flaws in implementation of codes of conduct are identified. Campaigning bodies point to it as a threat to water supplies for local communities and for food security in countries affected by drought and food insecurity. However, in the case of food security, there does not appear to be strong evidence to support impacts beyond a localised level and even at this level, it is possible that the direct impacts are not significant by comparison with other factors threatening food security. Furthermore, it is arguable that the industry’s contribution to export receipts has a positive impact on food security. The issue of water supplies for local populations is more substantive, particularly where abstraction and pollution of major lakes are an issue. In both cases, poor quality of available evidence on the industry’s role in reducing or increasing vulnerability of communities to water shortages or food insecurity makes it difficult to counter claims either way.


5.3.26 Measures to promote the empowerment of workers, including via gender aware measures, are identified the academic studies on the trade in Africa. These are considered likely to contribute to reducing vulnerability to external shocks, particularly where they result in strengthening security of employment for seasonal and temporary workers.

5.3.27 Information campaigns and other measures to counter the risks of consumer boycotts in Europe are considered likely to be important mitigation measures to which DEFRA and DFID alike can contribute. Whilst recent DFID-funded research is likely to provide evidence to support arguments demonstrating the social and economic benefits of the industry for workers in developing countries exporting to the UK, there appears to be a gap in terms of robust information on the environmental impacts and on more complex sustainability impacts (e.g. on food security).

Labour conditions / standards

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Case Study – CUT FLOWERS 5.3.28 Labour conditions cover a range of issues affecting workers, for which

international and national labour standards have been established, primarily in core ILO conventions to which signatory countries are required to abide. These include conditions of employment, fair treatment of workers, freedom of association and collective bargaining, use of child labour and forced labour, non-discrimination and safe and healthy working conditions. Past reports from the early 1990s of abusive working conditions in the industry in a number of developing exporter countries brought attention to these issues and prompted the development of social codes of conduct (ETI 2005: 6). More recently, reports by campaigning bodies to expose codes of conduct as ineffective in addressing these issues have resulted in more robust independent studies being commissioned to investigate the effectiveness of these codes of conduct (Smith et al 2004: 1). Thus evidence is readily available on the impacts and the effectiveness of codes of conduct as a way of ensuring appropriate labour conditions are ensured and international and national labour standards are upheld.

5.3.29 Job insecurity and harsh treatment of seasonal and casual workers were identified by Smith et al (2004) as issues in Kenya and Zambia cut flower industries. Flower growers reported increased permanent employment as a result of pressures to implement codes, reduced seasonality in production cycles and an increasing need for a stable and skilled workforce to maintain high quality. Nevertheless, the study found that feelings of insecurity remained, particularly amongst women and even amongst permanent workers, due to the absence of adequate protection against unfair dismissal.

5.3.30 Excessive requirements for overtime is identified to be a problem, particularly for workers engaged in the packing houses. The impacts are particularly difficult when imposed at short notice, particularly for women with childcare responsibilities and with fears for their own safety at the end of a late shift. This impact arises partly as a result of “just in time” supply chain management, with orders for export coming in hours before flowers need to be flown out (Smith et al 2004: 9-10).

5.3.31 Employment benefits, such as sick pay, maternity pay, housing allowance, healthcare and childcare can all have positive socio-economic impacts for workers and their families and the wider local economy. Worker codes of conduct do cover some of these benefits, although often not the ones that are most valued by workers – in particular sick pay, medical care and childcare. Where national legislation sets out requirements, codes which stipulate compliance with local laws may cover these requirements indirectly. However, the report found that the codes are not fully ensuring that these benefits are provided, with seasonal and casual labourers often excluded from benefits (Smith et al 2004: 11-12). Similar findings are reported in studies on Colombia (see Madrid, 2006).

5.3.32 Freedom of association and right to collective bargaining: Studies on the industry in Zambia and Kenya found that union recruitment in horticulture is fairly recent, but with some early indications reported to indicate that

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unionisation had been effective in addressing some worker concerns, including observation of re-entry times after spraying. An ETI report on abuses of the base code included reported discrimination against union members (ETI 2004: 8). A comparative report on code adopting and non-adopting farms in Kenya indicated that unionisation was very low in both types of farms (Omosa et al, 2005: 55). A report on conditions in Colombia includes a quotation that identifies the country as ‘the most dangerous place in the world to be a trade union activist’ with almost 4,000 trade unionists murdered since 1986. It reports that as a result of repression, most independent trade unions representing flower workers have ceased to operate, although NGOs including Corporación Cactus have continued to document conditions and support workers where possible. In 2001 an independent national trade union of flower workers was formed, UNTRAFLORES, but dismissal of or discrimination against union members followed (Madrid 2006).

5.3.33 Forced labour and Child labour: Forced or child labour were not identified as issues in reports on cut flower production in Kenya or Zambia (Smith et al 2004: 9). An ILO rapid assessment of child labour in the cut flower industry in Ecuador in 2000 found that massive numbers of boys and girls work at the plantations. In Cayambe, 84.5 per cent of primary-school students who work do so in flower-growing enterprises. This figure is 43.5 per cent for secondary-school students, and 50 per cent for young people interviewed in the market. In Cotopaxi, the percentage of boys and girls working in flower growing is lower, involving 44.5 per cent of child workers. It is not known to what extent child labour continues or how far this reflects practices in other producer countries in Latin America.

Improvement / Mitigation measures

5.3.34 The ILO report recommends that any efforts to address child labour take account of the socio-cultural characteristics of the region. Adoption, implementation and monitoring of codes of conduct which refer to ILO core labour standards should ensure that child labour is not used within the flower industry.

Inequality

5.3.35 The significant female labour force involved in the cut flower industry in developing exporter countries has led to a number of studies being undertaken into gender dimensions of the industry, in particular outputs from a DFID-funded research study on gender, rights and participation within African horticulture. These reports identify positive economic benefits for women as a result of the employment created. However, they also identify negative gendered impacts for equality (Tallontire et al 2004: 6-7; Smith et al 2004: 20). These include:

• Insecurity of employment for women who are over-represented

amongst non-permanent workers

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• Overtime, making it difficult to balance childcare with employment; • Low wages and childcare, where women unable to afford childcare

may leave their children unsupervised or out of school during work or children are separated from their mothers

• Discrimination against pregnant women in decisions concerning recruitment and redundancy, lack of access to maternity leave

• Gendered allocations of jobs reducing women’s opportunities for promotion

• Particular risks from exposure to chemicals for pregnant and breastfeeding women

• Sexual harassment and verbal abuse.

5.3.36 The research methodology for these studies means that these findings can be regarded as robust. Similar findings are reported in other countries, including Colombia and Ecuador, although generally in less robust information sources (Opondo, date?35, Madrid, 2006). Omosa et al (2005).

Mitigation measures

5.3.37 Reports by IDS and NRI (both 2004) make recommendations for achieving improved working conditions in a gender-sensitive way, mainly aimed at employers, and focusing on changes to basic employment policy and practice (Smith et al 2004: 28). The main role identified for Northern stakeholders was in communicating examples of good practice and facilitating dialogue between local stakeholder groups.

Health and safety – employers and communities

5.3.38 In the cut-flower producing countries of the South, employers often fail to provide sufficient training and protective gear to workers who face daily exposure to toxic chemicals. A survey of 8000 workers in plantations near Bogotá, Colombia, found that workers were exposed to 127 different pesticides, three of which are considered extremely toxic by the World Health Organization. An ILO Survey of the Ecuadorian flower industry found that only 22 percent of companies trained their workers in the use of chemicals.

5.3.39 Governmental regulations regarding pesticide use and health and safety standards are often insufficient or unenforced. Colombia’s regulations on pesticide use, for example, do not include specific rules for greenhouses, where the impact of pesticides is tripled. The health of the workers is compromised as a result of the lack of effective protection. Two-thirds of Colombian and Ecuadorian flower workers reportedly suffer from work-related health problems, including headaches, nausea, impaired vision,

35 http://www.gapresearch.org/governance/HORT1.pdf [Accessed 16/06/06]

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http://www.gapresearch.org/governance/HORT1.pdf



conjunctivitis, rashes, asthma, stillbirths, miscarriages, congenital malformations and respiratory and neurological problems.36

5.3.40 An ETI report (2005: 8-9) identifies a long list of abuses of their base code requirement that working conditions are safe and hygienic. These included lack of personal protective equipments (PPE), pesticide spraying instructions not being followed, none or few first aid boxes or trained first aiders, abuse of chemical coding systems, particularly regarding re-entry times for workers after spraying in greenhouses. Likewise, academic reports produced by NRI (2004) and by IDS (2004) identified exposure to chemicals and other health issues as an issue for workers. The health impacts associated with pesticide and other chemical usage affect both male crop sprayers and women workers in greenhouses, being particularly serious for pregnant and breastfeeding women.

Improvement / Mitigation measures

5.3.41 Codes of conduct adopted by flower farms include health and safety, including safe handling of pesticides. Various studies have been undertaken to assess the effectiveness of these codes. Omosa (2005) found that health and safety issue are taken more seriously in code adopting farms compared to non-code adopting farms. However, medical check-up for the majority of workers was neglected throughout the industry. Measures covered in codes to address occupational health and safety include:

• Access to quality drinking water • Provision of toilet facilities • Provision of hand-washing facilities • Provision of health care • Provision of protective clothing and equipment • Training in health and safety • Appointment of health and safety officer.

5.3.42 The extensive list of abuses of the ETI base code in Kenya in relation to worker health and safety, as well as the supportive evidence from independent academic studies, would indicate that codes of conduct are not fully adequate to address these risks, without further strengthening.

36 ILRF, 2003, Cut-Flower Industry: An ILRF Working Paper http://www.laborrights.org/projects/women/Flower_Paper_0903/flower_paper_pesticides.htm [Accessed 21/06/06]

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5.4 Processing and Transportation: Packing House – Cold Room – Refrigerated Transport

Air pollution (CO2, CFC’s, chemicals)

5.4.1 Cut flowers are transported internationally by air. Air travel is particularly damaging due to the amount of fuel burnt, composition of the fuel (kerosene) and the nature of its emission into the atmosphere (i.e. at high altitude). This is particularly unavoidable for developing countries exporting cut flowers to Europe. Research conducted for DEFRA on food miles concluded that air travel is the most environmentally damaging mode of transport in terms of climate change. “Although air freight of food accounts for only 1% of food tonne kilometres and 0.1% of vehicle kilometres, it produces 11% of the food transport CO2 equivalent emissions.”37 On the basis of data provided by DEFRA in a Parliamentary written answer, the Liberal Democrat party released a report that ‘flowers flown from Kenya alone are responsible for over 33,000 tonnes of CO2 each year’38. In response, it has been reported, for example by the Fair Trade Foundation39, that “more carbon dioxide is emitted growing a glasshouse crop than given off during the air freight of the same quantity of flowers”. However, any calculations undertaken to form the basis for these assertions on CO2 emissions have not been identified. Additionally, it is not clear whether CO2 emissions associated with maintaining the cold chain from the point of cutting the flowers, during storage and transportation up until the point of sale have been considered. Table 8: Air miles from key cut flower exporters to the UK40

Export country Air miles Holland 200 miles Colombia 5,500 miles Ecuador 6,000 miles Zimbabwe 5,000 miles Kenya 4,250 miles

Mitigation/improvement options

5.4.2 Given the dependency of the cut flower industry in developing countries for air freight in cooled conditions, the opportunity to reduce this impact would appear to be limited. Technology that maximizes efficiency in use of international flights may achieve some savings in emissions. The Fairtrade Foundation reports that flower importers are seeking to maximize the use of return cargo planes, which supply food aid and freight to Africa.

37 AEA Technology, 2005, ED50254 Issue 7 The Validity of Food Miles as an Indicator of Sustainable Development: Final Report produced for DEFRA. DEFRA 38 Quoted in http://www.edie.net/news/new_story.asp?id=11072&channel=0 [Accessed 19/06/2006] Original report not traced. House of Commons Hansard written answers for 22/11/2005 pt 15 Column 1842W [Accessed at www.publicationsparliament.uk 20/06/2006] 39 Fairtrade Foundation, 2006, Fairtrade Roses Q&A. The Fairtrade Foundation www.fairtrade.org.uk [Accessed 19/06/2006] 40 Source: http://www.theecologist.org/archive_detail.asp?content_id=230 [Accessed 21/06/2006]

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http://www.publications.parliament.uk/





Water pollution (chemicals)

5.4.3 Sometimes flowers are dyed to alter or deepen the flower’s natural colour. This can lead to the pollution of ground- and surface water because of the emission of dyes and preliminary treatment substances.

Mitigation/improvement

5.4.4 The avoidance of dyeing is the best way to prevent water pollution. In particular, the use of heavy metal, including cadmium, should be avoided, with use of water-based colouring agents the most effective way of minimising water pollution from dyeing of flowers.

Packaging

5.4.5 The trade in cut flowers generates a considerable amount of packaging waste. Packaging materials can cause impacts through the release of chemicals during production and degradation. Furthermore, the disposal of waste packaging can increase pressure on waste resources such as landfill void.

Mitigation / Improvement options

5.4.6 The use of re-usable recyclable and biodegradable material and limits to the amount of packaging can reduce the impact. The choice of environmentally sounder materials can also minimise the pollution associated with packaging. Computerised packaging systems can also enable efficient packing of boxing to reduce freight costs and minimise packaging and waste.

5.5 Distribution: Flower Markets – Distributors/Retailers 5.5.1 This stage of the supply chain is mainly within Europe, both at the Dutch

auctions and within the UK. This study is concerned with impacts outside the UK. It was felt that this stage is likely to have the least impacts within the Netherlands, relevant EU legislation and environmental practices are likely to be adequate to address negative social impacts, particularly given the scale and significance of the Dutch auction houses. However, it is possible that there are some harmful environmental, social or economic impacts associated with this stage.

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Case Study – CUT FLOWERS 6 Summary 6.1.1 Impacts arising from cut flower production and export relate particularly

strongly to the flower growing, packing and transportation stages. The production stage involves a series of more detailed steps, which will vary according to the type of flower grown.

6.1.2 The most robust information is available on social impacts for workers, arising from studies on the impacts of codes of conduct for workers. These demonstrate that codes have been effective to some extent in improving working conditions. However, they also identify ongoing problems which have proved harder to address, including gendered dimensions, which are strongly evident in a feminised employment sector. These are most fully documented in reports from a two year research project on ethical trade in African horticulture, funded by DFID. The findings of these studies are also acknowledged in an ETI report (2005). For results of the primary research, see Smith et al 2004 and Tallontire et al (2004). These studies have used qualitative research methods using triangulation to ensure robustness. Their findings are more usable, general and build up a comparative picture more effectively than other reports which are more country-specific or which attempt to use semi-quantitative data, based on inadequate sample sizes (Omosa et al). Nevertheless, all these reports provide a reasonably consistent overall picture of an industry that has a growing understanding of the social impacts for workers, particularly women workers, and that is identifying ways to address these impacts in order to ensure the undoubted economic benefits, including in terms of job creation, particularly for women, who feature strongly amongst the poorest in the societies concerned.

6.1.3 The focus on worker conditions contrasts with a relative dearth of information on wider impacts for the community health and safety, impacts on access to natural resources and a more holistic understanding of sustainable economic benefits at a community level.

6.1.4 The economic benefits are available in terms of contribution to export earnings and to job creation, with information on earnings and staff benefits being generated as a result of the studies on impact of codes of conduct. However, few studies appear to have considered the economic sustainability of the industry, including in comparison with the closely related sector of vegetable production, or other forms of export production.

6.1.5 Whilst the reports on social impacts for workers make reference to codes of practice on environmental practice, there appears to be little recent data in the public realm on different environmental impacts of cut flower production. This may be because the impact is assumed to be relatively well-understood. The case study on Lake Naivasha provides an interesting view of how environmental impacts on water quantity and quality, on biodiversity and impacts for neighbouring communities inter-relate. These inter-relations include the indirect negative environmental impacts associated with large economic migrant populations attracted by the employment opportunities of the cut flower industry to this sensitive area. They also

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include the negative impacts for the local population as a result of the increased demand on environmental resources and the worsening of environmental conditions affecting other economic activities (including fishing) and on community health (as a result of water pollution and over-abstraction), housing quality and localised food security (as a result of declining fish stocks used for local consumption).

6.1.6 In terms of policy implications, areas of concern:

• Climate change: Recent research by Cranfield University implies that less CO2 is produced by transporting cut flowers by air than growing flowers in heated greenhouses in colder climates41. However, this is dependent upon a number of assumptions, such as the energy used to heat greenhouses comes from fossil fuels. More research on this would be useful particularly testing the robustness of the assumptions, the potential to mitigate these impacts and how does this relate to economic benefits for exporter countries not yet subject to limits on climate change emissions.

• Economic and social impacts: Workers, growers and codes of conduct operators alike are in agreement that the economic benefits for national economies and for employees and the household/local economy must be maintained whilst negative social impacts for workers as a result of working conditions can and must be addressed. Codes of conduct and labelling, with independent social and environmental auditing are increasingly effective at addressing harmful impacts, although identified problems still remain with this approach to mitigation. For example, consumer boycotts can threaten the economic benefits and derived social benefits resulting from increased income from working in the cut flower industry42; the proliferation of codes can act as a cost barrier particularly to smaller independent growers; ensuring the labelling keeps track with the appropriate batches of flowers through the auction houses to the retail outlets remains a challenge.

• Water Use: Growing cut flowers requires significant amounts of water. How can water use efficiency be maximised and potential conflict between growers and other local users prevented?

• DEFRA/DFID aid and investment: combined support to ensure more holistic understanding of inter-relationship between environmental, social and economic impacts at a local level in exporter developing countries. There is a particular need to look more widely beyond worker employment conditions to more general sustainability and environmental considerations, so that UK investment and aid in developing countries achieves sustainable development at both local and national levels.

41 http://www.dfid.gov.uk/news/files/Speeches/trade/hilary-valentine-speech.asp 42 Due to the feminised labour force this can disproportionately impact upon women and ultimately children

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• Biodiversity - Kenya and Lake Naivasha, appear to be special cases of production focused in areas of ecological sensitivity. However, it is also emerging in the Ethiopian highlands and Tanzania’s Mount Kilamanjaro. As the UK is a major consumer, there is a strong case for more focus on protecting biodiversity impacts in countries such as Kenya arising from UK consumption.

• DEFRA controls the plant health passport system for flower imports. What can be done to ensure that these requirements do not result in increased use of pesticides harming workers and the local environment, whilst ensuring any risks to UK biodiversity etc are adequately controlled?

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Case Study – CUT FLOWERS Appendix I – Literature Review

AEA Technology, 2005, ED50254 Issue 7 The Validity of Food Miles as an Indicator of Sustainable Development: Final Report produced for DEFRA. DEFRA

Asea, P, K, Kaija, D, 2002, Impacts of the Flower Industry in Uganda, International Labour Office, http://www.ilo.org/public/english/dialogue/sector/papers/uganflow/index.htm, [accessed 4/7/07]

CARANA Corporation, 2005, Southern Africa Global Competitiveness Hub Trip Report – Value Chain Support to the Floriculture Export Sector in Zambia and Horticulture Marketing Firms in South Africa. USAID

Dannson et al, 2004, Strengthening farm-agribusiness linkages in Africa: Summary results of five country studies in Ghana, Nigeria, Kenya, Uganda and South Africa. AGSF Occasional Paper 6. FAO, Rome.

ETI, 2005, Addressing Labour Practices on Kenyan Flower Farms: Report of ETI involvement 2002 – 2004. Ethical Trading Initiative, UK.

Fairtrade Foundation, 2006, Fairtrade Roses Q&A. The Fairtrade Foundation www.fairtrade.org.uk [Accessed 19/06/2006] – This Q & A sheet does not fully source factual data and claims regarding impacts.

FAO, 2002, A thorn on every rose for Kenya’s flower industry. FAO. http://www.fao.org/english/newsroom/news/2002/3789-en.html This article, placed on the FAO website, provides some useful information but not all source data could be traced to verify its reliability.

FIAN website http://www.fian.de/fian/index.php?option=content&task=view&id=177&Itemid=50 [Accessed 21/06/06] This German NGO website refers to research articles, but not all source data could be traced to verify its reliability.

Hargreaves-Allen, V., 2003, ‘Say it Without Flowers’ article in Ecologist Online. http://www.theecologist.org/archive_detail.asp?content_id=230 [Accessed 21/06/2006] This article purports to set out key facts without identifying sources. It is useful as an indicator of the issues of concern for campaigning organisations in Europe in favour of consumer boycotts.

House of Commons Hansard written answers for 22/11/2005 pt 15 Column 1842W [Accessed at http:www.publications.parliament.uk 20/06/2006] Data provided by DEFRA is sourced from Eurostat, a reliable statistical source.

http://www.defra.gov.uk/environment/ccl/intro.htm [Accessed 19/06/06]


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http://www.ilo.org/public/english/dialogue/sector/papers/uganflow/index.htm


http://www.fao.org/english/newsroom/news/2002/3789-en.html

http://www.fian.de/fian/index.php?option=content&task=view&id=177&Itemid=50


http://www.defra.gov.uk/environment/ccl/intro.htm



Case Study – CUT FLOWERS http://www.flowers.org/press/press-releases.htm [Accessed 14/06/02006] The Flower and Plants Association is an industry body. A conversation with the press officer confirmed that they do cross-compare a range of information sources for the industry information released. However, only selected information is available in the public domain.

http://www.foe.co.uk/resource/briefing_notes/50_climate_top_tips.pdf [Accessed 21/06/06] This list of action points does not identify sources of information. It identifies the key concerns of campaigning NGOs concerned to address causes of climate change.

Labor Rights, 2003, Codes of Conduct in the Cut-Flower Industry. An ILRF Working Paper http://www.laborrights.org/projects/women/Flower_Paper_0903/flower_paper_index.htm [Accessed 21/06/06] This paper references sources, which are a mixture of international and government-produced studies and news articles. It is judged to be reasonably robust in its use of evidence.

Kenya Wildlife Service, 1999, Lake Naivasha – World Heritage. http://whc.unesco.org/en/tentativelists/1345 [Accessed 21/06/2006] This website uses information provided by a Kenyan government body. It is considered to provide reliable information.

Koyo, A., 2005, Information Sheet on Ramsar Wetlands: Lake Naivasha, Kenya. Ramsar Information Service. http://www.wetlands.org/rsis/ [Accessed 21/06/2006] This website uses information provided by a Kenyan government body and verified by experts. It is considered to provide reliable information.

Madrid, G, 2006, ‘Women in the Cut Flower Export Trade in Colombia.’ Workshop on Gender in Global and Regional Trade Policy: Contrasting Views and New Research. Paper for Session 1 – Defining the Issues. CSGR, University of Warwick 5-7 April 2006. This paper, available online, is not accompanied by the appendices of references. It uses information gathered towards production of a PhD thesis (not yet published) so is considered to provide reasonably reliable information.

Omosa, M, K & Njiru, R., 2005, The Social Impact Of Codes Of Practice On The Cut Flower Industry In Kenya Final Report August 2005. Unesco/Unitwin Chair University Of Nairobi. This study provides details of the research methodology used to gather original data presented. There are identified flaws in the survey which to some extent undermine its reliability. Nevertheless, its findings are largely consistent with those of other, more robust studies, so it is considered a reliable information source.

Opondo (date unknown?) ‘Trade Policy in the Cut Flower Industry in Kenya’ Globalisation and Poverty. http://www.gapresearch.org/governance/HORT1.pdf [Accessed 16/06/06]

This undated report provides information that appears to have been gathered via primary research methods in Kenya. It is considered to be a reasonably reliable source of information, particularly when considered alongside other studies covering similar issues.

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http://www.foe.co.uk/resource/briefing_notes/50_climate_top_tips.pdf

http://www.laborrights.org/projects/women/Flower_Paper_0903/flower_paper_pesticides.htm

http://whc.unesco.org/en/tentativelists/1345

http://www.wetlands.org/rsis/

http://www.gapresearch.org/governance/HORT1.pdf


Case Study – CUT FLOWERS ProFound, 2005, EU Market Survey 2005 Cut Flowers and Foliage – United Kingdom. Compiled for CBI by ProFound in collaboration with Proverde and Jan Lanning. This survey appears to be based on standard market research methodologies and thus is regarded as reasonably robust source of up-to-date factual data.

Sikazwe, D., 2001, ‘Zambian flower exports set to soar?’ New Agriculturist. http://www.new-agri.co.uk/01-5/focuson/focuson7/html [Accessed 20/06/2006] This online news article uses information from reliable industry informants and thus is regarded as reasonably reliable, although it appears that some data is for the entire horticulture industry, not exclusively the cut flower sector.

Smith, S., Auret, D., Barrientos, S., Dolan, C>, Kleinbooi, K., Njobvu, C., Opondo, M. and Tallontire, A., 2004, ‘Ethical Trade in African Horticulture: gender, rights and participation. IDS Working Paper 223. IDS, Brighton. This academic report provides details on the qualitative methodology, which used participatory techniques to gather information and triangulation of information sources to verify primary data collected. It summarises data from a series of country-specific studies. It is regarded as a reliable source of evidence, with use of reliable in-country industry informants used to identify factual data not in the public domain.

Tallontire, A., Smith, S. & Njobvu, C., 2004, Ethical Trade in African Horticulture: Gender Rights and Participation: Final Report on Zambia Study. NRI Report No 2775. NRI, London. This academic report provides details on the qualitative methodology, which used participatory techniques to gather information and triangulation of information sources to verify primary data collected. It is regarded as a reliable source of evidence, with use of reliable in-country industry informants used to identify factual data not in the public domain.

Tekere, M., 2005, Zimbabwe. FAO, produced by Trade and Development Studies Centre, Harare, Zimbabwe. http://www.fao.org//docrep/005/y4632e/y4632e0y.htm [Accessed 19/06/2006] This study, undertaken by a country expert on behalf of a major international body, is regarded as a reliable source of evidence.

Thoen, R., Jaffee, S. and C. Dolan, forthcoming, ‘Equatorial Rose: The Kenyan-European Cut Flower Supply Chain’, in R. Kopiki (ed.), Supply Chain Development in Emerging Markets: Case Studies of Supportive Public Policy, Boston: MIT Press.

UFEA (2000?) Investing in Uganda’s Floriculture Industry. Uganda Flower Exporters Association. This industry-produced article is regarded as a reasonably reliable source of evidence, particularly when data is triangulated with other studies.

Castelnuovo, A., Castelnuovo, J & Santacruz, X., 2000, Ecuador Child Labour in Flower Plantations: A Rapid Assessment. International Labour Organization/ International Programme on the Elimination of Child Labour (IPEC), Geneva. This report is regarded as reliable. However, it is dated and

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http://www.fao.org//docrep/005/y4632e/y4632e0y.htm


Case Study – CUT FLOWERS thus it is considered likely that the situation may have changed considerably since the time of the study.

Brada, R., Labrada, R., Fornasari, L & Fratini, N., date unknown, Manual for Training of Extension Workers and Farmers on Alternatives to Methyl Bromide for Soil Fumigation. UNEP/FAO. This is a factual manual that is regarded as reliable.

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