Case Study Summary
The opening case describes Ecuador’s rose industry. In the last 20 years, Ecuador has built its rose industry from virtually nothing to a thriving industry generating $240 million in sales. Today, the industry employs tens of thousands of people at higher wages than the average Ecuadorian receives. Yet, there are concerns that in the quest for perfect flowers, the use of toxic chemicals such as pesticides may be hurting not only the environment, but also the health of the workers.
Question 1: What is the basis of Ecuador’s comparative advantage in the production of roses? Answers 1: Most of Ecuador's rose farms are located in Cayambe and Cotopaxi regions and are within an hours drive from Quito, the capital of Ecuador. The altitude is around 10,000 and the rose farms are at the foot of volcanoes that rise more than 20,000 feet. The rose fields benefit from fertile soil, high altitude, and the intense sunlight that lasts up to 12 hours each day. The location close to the equator makes an ideal growing condition and the roses thrive. They have vibrant color and large heads. They are prime roses and fetch a premium price. Because of the location and conditions, the roses flower year round.
Because of these advantages, Columbia and Ecuador roses account for 90% of the roses sold in the United States last year. The revenues gained by taxes paid by rose growers have allowed the country to improve its infrastructure. Huge plastic covered structures have been built to protect the roses. Roads have been paved, schools built, and huge sophisticated irrigation systems have been developed and constructed. Airports and transportation has been developed so that a rose that is picked today in Ecuador can be in the United States tomorrow ready for delivery.
As more focus is and scrutiny is being made on the worker's safety and exposure to harmful pesticides, the rose worker's conditions are...