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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One thousand hectares of land went under cultivation, more than 50,000 people were directly employed on the farms, with tens of thousands earning a crust along the supply chain, as Ethiopia threatened the regional primacy of Kenya's longer-established floriculture.Skip to next paragraph
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Keen to banish Ethiopia's famine-ridden reputation, Prime Minister Meles Zenawi played his part, hailing flowers as the flagship of an increasingly buoyant economy – the government says that in 2008 gross domestic product grew at just under 10 percent.
And it is to him that the flower farmers are now turning, calling for a reprieve from the banks which are nervously eyeing their loans, and the freight firms and airlines, who currently charge $1.85 per kilo of cargo to fly the flowers to Europe.
"This is a problem caused by the developed world, but we are paying for it in Africa," says Tsegaye Abebe, president of the Ethiopian Horticulture Producers and Exporters Association (EHPEA). "We can tolerate low market prices for a time, but if prices continue like this for many more months our industry will be under serious threat. It is time for all the businesses with a stake in the sector to help each other out."
Despite a recent pledge to support the industry "through thick and thin," Meles – as he is widely known – can not hold back the confluence of global and local forces sweeping across the Ethiopian flower business.
Too much power in hands of European middlemen?
It is a tough trade; cheap and high quality stems pour into the market from across Africa and Latin America, putting European buyers in the driving seat.
Prices are set low in the knowledge there is a surplus of supply from desperate growers, and farm owners have yet to build the capacity to trade directly with supermarkets – the major sale point for flowers.
As a newcomer to the market, Ethiopia does not benefit from the same economies of scale as neighboring Kenya, raising fears it is particularly vulnerable to the price shock.
Mr. Tsegaye believes survival can be secured through a diversification of products to include herbs, fruits, and vegetables, and markets to reach Japan, Middle East, Russia, and the United States. "But that depends on the short and medium term being kind to us," he says.
The social impact of decline will also be keenly felt in Sabeta – where small holding farmers were convinced to sell their land to flower farms by the promise of big rewards to come.
The majority of flower workers are women, and the recession threatens to stymie plans to empower them with minimum labor standards and unions.
It has deflated Emebet Tesfaye's hopes. She may soon be left with the awkward choice of dumping some of the 70,000 flowers a day produced at Ethio Highland or flooding the market with roses no one is buying.
A recent visit to a Dutch auction house intensified her gloom as she witnessed the pecking order of a market which roots flower-producing nations to the bottom.
"Each morning the buyers look at their computer screens and click one button that determines the life of all these people," she explains gesturing to the female packers. "We have no power."