Got Mother's Day flowers? Ethiopia does, but few are buying.
Ethiopia is being hit hard by a dramatic slump in demand for flowers as the global economic crisis forces consumers to curb spending on perceived luxuries.
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Dozens of workers tackle a seemingly endless stack of exotically named roses, separating the short stems and rotten petals from the bright Valentino, Duo Unique, Wild Calypso, and Alyssa blooms destined for Europe.
Most of the farm's 400 employees earn less than a dollar a day, but it is a steady wage in one of the world's poorest nations where 80 percent of the population lives off the land.
This year the 20-hectare farm, a sprawl of irrigated and temperature-controlled greenhouses, is set to beat its target for growing, cutting, and exporting 21 million stems.
That is a 15 percent rise on its contribution to the 1.5 billion stems exported by Ethiopia in 2008, earning an estimated $175 million for the industry.
But the positive figures belie a dramatic slump in demand for flowers as the global economic crisis forces European consumers, Ethiopia's main market, to curb spending on perceived luxuries. It's a tough blow for Ethiopia, where flower power was touted to supplant coffee as Ethiopia's main export and highest earner of foreign exchange.
Many analysts now fear that, without swift assistance, Ethiopia's nascent flower industry will wilt in the heat of global recession.
"We're not talking about falling profit this year, just survival," says farm manager Emebet Tesfaye. "Even Valentine's Day was down from last year. The problem is Europeans don't want flowers right now. The buyers in Amsterdam control the market, and they are setting prices very low – there is no minimum price for our stems. Every loss is on the growers' side: transport, water, electricity, wages, and even fees to the rose breeders."
Sales down on Valentine's Day and 'Mothering Sunday'
Sales forecasts are traditionally pegged to an expected bonanza at Valentine's Day and Mothering Sunday (Europe's version of Mother's Day on March 22). This year Ethio Highland Flora Farm sold 20 to 30 percent fewer flowers, punching a hole in expected revenues and compounding the pain caused by low stem prices.
Prices per stem are now 10 cents (euro) or less, down 15-20 percent from last year.
Four farms have already filed for bankruptcy – out of 85 – while at least half of the remainder are operating at a loss.
Oh, what a difference half a year makes
Just six months ago, things looked very different.
Foreign and local investors piled into the sector lured by predictions of revenues of $1 billion within five years, tax incentives, and a surfeit of cheap labor.