Ethiopian flower export’s 97% value never reaches Ethiopia

By Duncan Green

OK, back to Ethiopia week. On leaving Addis, we head off to the Rift Valley on one of Ethiopia’s many excellent roads (shame about the driving…) to an enormous flower farm owned by a company called Sher, which rents them out to three large Dutch flower companies, including Herburg Roses Ethiopia plc, who we are meeting. And I mean {www:enormous} – rows of identical green plastic greenhouses, each one a kilometre in length, covering a total of 325 hectares so far, and aiming to reach 450. What follows is a classic flying NGO visit – a hurried conversation with the managers, a quick chat to some workers, and then we have to leave with a steadily accumulating series of unasked or unanswered questions, what the French call pensées d’escalier (‘thoughts on the stairs’).

ethiopia roses 3 So what is (more or less) certain? Roses have boomed in Ethiopia, overtaking Kenya this year. According to Alemayehu Geda, an {www:economist} from Addis Ababa University, about 100 firms are involved, 2/3 of them foreign-owned. Cut flower exports have risen tenfold over the last 3-4 years and now bring in an annual $170m in 2008 – that’s 11% of national exports. Peter van Heukelom and Jos Kliks, respectively Herburg’s Managing Director and Farm Manager, think Geda’s figure may even be too low. 90% of Ethiopia’s roses go to Holland.

Flowers create jobs: Herburg needs 26 people per hectare to grow its flowers, which is a lot more than can make a living from a hectare of any other crop I’ve come across. And Ethiopians want to work there, as the long lines outside the farm gates demonstrate.

Flowers bring in vital foreign exchange. The deal between the Ethiopian government and the foreign investors specifies a minimum of €0.08 must enter Ethiopia per flower. Herburg alone exports 80 million roses a year to Holland – that’s a guaranteed €6.4 million entering the country.

But only a tiny proportion of the sales price reaches Ethiopia: Peter says he would be happy to earn €0.13 a stem, (i.e. above the minimum set by the government), but a 12 rose bouquet on a UK supermarket website costs £40, or €3.91 per rose. That means 97% of the final value of the rose you buy in the shop never reaches Ethiopia!

3p for you; 97p for us.....

The companies spend a fair amount on social responsibility, including a gleaming hospital, free to all employees, and a nursery and primary school. Herburg is regularly audited and certified on both its environmental and social {www:performance} by MPS, a quality assurance company.

Herburg pays no corporation tax, because of a five year tax holiday that runs out next year. But even after that, as long as Ethiopia prevents companies from repatriating profits, they will probably make sure their pricing policy ensures that profits accrue in Holland, so little corporation tax will be paid in Ethiopia.

Beyond that, a one hour visit leaves a large cloud of uncertainty. Wages are low (about $28 a month for a packing worker, $50 for her supervisor), but that is reportedly a good deal more than the minimum wage and the few workers we speak to see it as a good, secure job.

On the environmental questions that always surround flower farms, Peter and Jos point to their MPS certification and say that the firm uses only organic chemicals, and takes great pains to clean up its effluents. A local environmentalist claims the fish are dying in the lake, but the lake looked luxuriant and was full of birdlife (including fish eaters), so who knows? Certainly not me. And I have no way of knowing the health impacts on the workers, if any, of chemical use, although Peter stresses that they are required to wear safety gear and fined if they fail to do so. And I have no information on the views of the small farmers evicted (with compensation) by the government to make way for the farms.

So on the basis of this sketchy information, do I think we should continue to buy Ethiopian roses? Yes. Does Ethiopia earn a fair proportion of the final price for its roses? No. Should we keep up pressure on the companies involved to improve wages, conditions and environmental management? Definitely. I suspect not all readers will agree, though. . .

(The author is Head of Research for Oxfam GB)

16 thoughts on “Ethiopian flower export’s 97% value never reaches Ethiopia

  1. Anonymous on

    Like everything that is done in Woyane Ethiopia, flower farming was promoted without proper studies in regards to the environment and overall benefit to the nation. Flower farming requires a great deal of water that is spent needlessly; priority should have been given to cash crops to meet the everyday needs of the population. In order to clean the flowers and make them ready for export, it has to be washed with chemicals that end up polluting the nearby rivers and lakes and not to mention the health effects on the growers. All the negative side effects of this endeavor are left to the nation for a return which is very negligible. And to make matters worse, any benefit the nation gets by way of foreign currency reserves goes into the pockets of the Woyane. A loose, loose situation any way one looks at it.

    A. Abegaz

  2. Whatever on

    $28 – $50 a month does’nt buy shit in Ethiopia. Especially with the current inflated prices, people are starving or barely making it!!!

  3. The foreigners are now own with Meles regime as if that is their primary place to own and oppress the people of Ethiopia. I remember a Dutch guy was rude to me when I asked a question about the employees. They don’t like it when foreigners, who are exploiting the people there come in contact with Ethiopians who live abroad. We know about the exploitiation so they don’t like Ethiopians that come from abroad.

  4. Yineger on

    My million dollar question is what should we do about all this??? I am pissed about weyane especially the hodams.

  5. Jegnaw Ethiopiawe on

    Exploitation,exploitation,nothing more and woyanes are part of that exploitation they are NOT in power to serve the interest of Ethiopia,they have been put in power to enslave Ethiopia,loot Ethiopia….our for father kept us free from slavery and exploitation but this Wyane are letting Ethiopian be enslaved for there masters and in return they will help them stay in power and keep on enslaving our people….. this slavery will stop only when we remove this cancer from Ethiopia once and for-all.. until then keep fighting…
    Good bless our land and our people.

  6. This shows the reality! Ethiopians are being exploited, these companies have reason to leave Kenya and Tanzania, and flood to Ethiopia. Because they know we have a reckless, irresponsbile, and corrupt government.

  7. Zabarga Mezgebu on

    Folks: Make no mistakes that the TINY clique corrupt rulers in Ethiopia are THERE to serve themselves with Ethiopian and international financial resources while they are still in power, knowing the fact they will sooner or later face the exact fates of all the dictators before them like Mengistu, Saddam, Charles Taylor, Milosevic, etc.

    And then, when the democratic international communities, human rights and humanitarian organizations who were/are forced to feed the wretched victimized majority in the empire of the thieves, the thieves chief war lord, PM. Meles Zenawi GETS ANGRY and travels all the way to the USA and delivers the usual cunning fox dictator protection/defence speech at the University of Columbia accusing NEOLIBERAL ECONOMIC policy because according to him, the theory points fingers at the corrupt dictator’s bad governance, monopoly of power and corrupt state’s business activities at the total expenses of private entrepreneurial economic activities.

    On one side, TURNING RIGHT and accusing legitimate oppositions as “terrorists” and milking HUGE AMOUNTS of strategic and financial resources from the “NEOLIBERAL” governmental and private sources and Fattening his private secret bank accounts and investments, while at the same TURNING LEFT and accusing the “NEOLIBERAL” circles as being oppressive and trying to reduce his ONE MAN dictatorial political and economic corrupt monopoly.

    What a cunning fox dressed in sheep skins bent on dividing, manipulating the national and international communities just for the sole purpose of enriching its dictatorial self while some 80 million Ethiopian people are living in despair and complete wretchedness waiting for crumbs from the outside year in year out?

  8. Just a few question? environmental concerns are symphatized with. However, what is the implication of these criticisms? are you suggesting that we abandon flower exporters (and abandon a much needed and scarce foreign exchange source)? First of all, the same conditions are found in many sectors in most developing countries. Secondly, Ethiopia cannot control how much of export value is to reach Ethiopia (it is determined by supply and demand).

    How do you suggest that Ethiopias development should take place (if we cannot focus on sectors such as flower)?

    If we are to oppose anything for the sake of opposing, we trivilize opposition as a phenomana. That is, we take away focus from the real crucial issues. Otherwise people are gonna think that the opposition will oppose any move by the regime just for the sake of opposing.

  9. Anonymous on

    This is a great article, thanks Duncan Green.Lots of info. It think this is fair enough to say that it is a good initiative to attract investors. Since Flower plantation is a new industry to the country, the govt has to give some insentives to the foreing investors to be able to convince and attract them to this land of opportunuity. And the contracts or agreements should bind until their term. And the govt should revise some of its terms and agreements

  10. Kitkit on

    Foreigners and Zinawians are exploiting Ethiopians;all is theirs nothing is Ethiopian’s.

    Meat and milk are taken from the cows,gold and minerals are taken from deep inside the lands;Rivers,lakes,and fish are dying,litte girls are missing from the schools and are taken away from their families.

    Rice,gold,and flowers,and little girls are for export.Foreigners and Zinawians are outsiders.

    Ethiopian farmworkers are being paid very little,and too much is taken from the land,but too little is cared for.Fish are dying,rivers are dying,lakes are dying,and Ethiopians are dying

    Keep fighting the enemy.Ethiopians,the enemy,it is what it is.

  11. Shaebia on

    I’m a true shaebia, not a shaebia supporter.
    What else does one expect from a foreign invested apart from, ‘Maximizing profit at a minimum cost’.
    But the mice in this deal is weyane & its loyalists. Weyane knows fully well that it survival depends on appeasing these investors at the cost of poverty wage & the environment.
    Common! $28 a month is less than a dollar a day. The employee(slave worker) might have children and family to support.
    Even the supervisor is getting less than $2 a day. the supervisor might be better off the avarage worker but itself is a home-slave.
    Let’s see the alternative to the poor slave workers, if they had a a plot of farming land that they were driven out from. They can simply make $5-$10 a day depending on yield. That is
    even after feeding the family. The farmers are denied to rely on their own resource. That is the independence they were denied. An aid food is donated to the poor in return to confisicating the land or for peanuts. That reduces the self reliant farmer into a cheap labour force open for exploitation. That makes the White man rich while keeping it’s puppets in power. The whiteman can easily maximize its profit even further if opposition ferments as a result of such day light robbery or exploitation. The west would invite Meles & his henchmen to a military bazaar to buy some of its state of the art, latest arms to control the slave workers who have now became ‘terrorists’. The cycle continues, the profit keeps coming, the west reaps profit from the tax revenue & uses the money to bail out the banks it’s banks. Until the people unite and do something about it, the cycle will continue. Eritrea always refuses to make a deal on the basis of unfair exploitation. hence gets a hammering from the mainstream media that serves the interest of the west.
    It even says in the bible …. James 4:4 ‘you adulterers, don’t you know that friendship with the world makes you an enemy of God’
    you can see it this way. God vsides with the poor and downtrodden ones that are denied justice so if one looks at weyane who serves the interest of the west and itself at the expense of its own people gains only yhe protection and friendship of those who call themselves ‘the world power’ . Indeed that has made weyane an enemy of its own people, making itself an enemy of God.
    “There is Hardly any True humanly friendship in this world…. Unless it is interest driven friendship” Isaias Afeworki, April 1999, London, UK.
    Let’s not kid ourselves here or get too much drowned in the consumer driven lifestyle to deny this reality in order to ignore the plight of the poor. I get embarassed when someone from abroad came all the way from another continent to highlight the plight of the poor people in Ethiopia while a fellow Ethiopian sit helplessly chattering while sipping coffee from one of the 10,500 starbuck chains in US alone. At least, Elias is doing his part in the struggle for justice by involving, not only all Ethiopians of all walks of life but also the people in the sub-region too. What is our part in the struggle for justice?……is the question one should ask him/herself.
    Look at where DRC is with all its rich resources it’s sitting on. Look at Iraq floating on oil. All the tin, titanium, gold & coltane in your laptops & mobile phones come from DRC. all the oils that drives the economy and your cars come from Iraq and other countries. What do theyget in return….. Chaos, poverty, perpetual violence and instability. Such conditions are vital ingredients to maximize profit for business and arm industry in the west as is articulated in the book, “SHOCK DOCTRINE”, by Naomi Klein. If weyane one morning wakes up and says enough is enough, the west would snatch the carrot of the greedy weyanes gob and pick up the cane stick to chase it away and replace it with another puppet. Even if weyane wants to change, it fears being caught between a rock and a hard place as it knows it has already made itself an enemy of the people and can’t afford to commit a suicide by going against his handlers. The choice is clear as is articulated in the book by John Perkins in his book titled “THE ECONOMIC HITMAN”. Unless the people get rid of weyane and sets its own program that benefits its own people in the long run, the situation will continue as it is.
    Rise up for justice or sit down and watch yourself gobbled up in slow motion.

  12. Tizibt on

    It is really saddening to read some of the comments by Ethiopians (at least I think they are Ethiopians!)who have eyes, but do not see, and have common sense but do not use it! Even if one doesn’t read the whole article, the title is self-explanatory. I wonder what those “blind” Ethiopians see when the title says “Ethiopian Flower Export’s 97% value never reaches Ethiopia”. At least one can deduct from the title that only about 3% of the value reaches Ethiopia. So where does the income from the sale of the roses go, if it doesn’t reach Ethiopia? Go figure – at least try to use your common sense! Hint: where is the money from the flower sale if it is not in Ethiopia? Could you try to make your common sense work? Shame!

  13. Shaebia on

    To tizibt,
    indeed, some have eyes but can’t see as it says in the bible……
    “You have eyes but you can’t see…. You have ears but you can’t hear”
    I guess the culture of consumerism have overwhelmed the humankind so deep that they can’t see or feel the suffering of their fellow humankind….. And can’t hear the cry for help from a fellow human. One good example is the suffering of over 50,000 ethiopians in Yemen is ignored by everyone despite VOA reporting their gruesome ordeal.
    God bless those people crying out for justice.

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