Petal Pushers

By CHRIS KRAUL

April 26, 1997 12 AM PT

TIMES STAFF WRITER

CAYAMBE, Ecuador —

Ecuadorean trade with the United States is coming up roses--and carnations, chrysanthemums, lilies and orchids--as a growing avalanche of petals and stems, now averaging three planeloads a day, showers down on the U.S. market.

Grower Rodrigo Espinosa says his family-owned business, with greenhouses splayed against this scenic, volcano-studded valley northeast of Quito, is expanding at a 30% annual clip, thanks to U.S. consumers’ flourishing appetite for his large-budded--and relatively cheap--roses. About 85% of his crop is air shipped to U.S. florists.

“Our costs are lower and the climactic conditions produce excellent-quality roses,” Espinosa said.

That’s a tough combination to beat, but it’s not the only thing giving growers here a leg up. Ecuador’s flower ranchers represent a rare success story for U.S. drug policy--executed at the expense of nursery owners in California and other parts of the United States.

The rising tide of cut flowers from Latin America is an old story that dates to the 1970s, when U.S. growers began losing ground to imports. The big culprit has been Colombia, better known for its exports of heroin and other illicit drugs.

But the flower influx from Latin America has become a torrent since 1991, when President Bush pushed through the Andean Trade Preferences Act. Designed to encourage farmers in Colombia, Ecuador, Peru and Bolivia to grow flowers instead of heroin poppies, coca leaves and marijuana plants, the law lets flowers from those countries enter the U.S. market duty-free.

The preferential treatment--most countries pay an average 7.6% duty on flowers at the U.S. border--has sent northbound shipments soaring. At the same time, 75 of California’s 450 flower growers have gone out of business. Nationally, U.S. greenhouse space has shrunk by 25%.

With no discernible impact on the drug scourge, U.S. nursery owners are understandably resentful.

“What we’ve seen is a big influx of flowers, and we haven’t had any stop in the drug trade,” said Mike Yamaguchi, a Salinas rose grower who is hanging on for dear life. “Our government doesn’t care about us.”

In January, U.S. Rep. Sam Farr (D-Monterey) introduced a bill that would reinstate flower duties on Andean exports.

However, Ecuador is enough of an exception to prompt U.S. policymakers to stick to their guns.

Though a small player in the flower garden compared with Colombia, Ecuador has enjoyed a tripling of its U.S.-bound shipments since 1994. The 25,000 metric tons entering the U.S. market last year were worth $105 million, according to the U.S. Commerce Department.

That has prompted a job explosion in its flower industry--to 18,000 workers from just 8,000 in 1992. Luis Baquero Paez, general manager of Ecuador’s national floral trade association in Quito, said many of those workers would otherwise be working in drug production or trafficking.

For Ecuador, the flower boom is also a welcome--and environmentally friendly--supplement to Ecuador’s leading export, oil, which accounts for 63% of all government revenues.

Meanwhile, Ecuador in particular has earned high marks from anti-drug enforcers for its interdiction efforts. It is the only one of the four Andean countries--the others are Colombia, Bolivia and Peru--to be fully certified as cooperating in anti-narcotic efforts since the U.S. certification process began in 1986.

Last year, Ecuador broke up a transshipment ring operating out of Guayaquil, seized seven metric tons of cocaine and shut down a processing lab putting out 600 pounds of cocaine a week, a U.S. State Department official said.

The Clinton administration says reimposing flower tariffs would amount to a “punitive measure” for South American growers tending legal crops and doing their bit to stem the drug flow.

“The law is doing what it was intended to do,” said the State Department official, who spoke on the condition of anonymity. “It’s provided an incentive for legitimate commerce, which is an integral part of our overall efforts to reduce drug trade in the region.”

California’s flower industry argues that duty-free status gives Ecuadorean and Colombian growers a market advantage they don’t really need.

“No country deserves preferential treatment in a market where the domestic producers are already in the minority,” said Lee Murphy, president of the California Cut Flower Commission, a quasi-governmental agency under the aegis of the state Department of Food and Agriculture. “Why should we have to pay a tariff to get our products into Europe and [Andean countries] not pay to get their products in here?”

Farr said his bill before Congress, which has attracted 35 co-sponsors, would not eliminate the competitive advantage enjoyed by the South Americans--but would drive up prices, thus enabling domestic growers to make money. They are now losing money, he said.

“Andean Pact nations have been so successful in gaining market share, they ain’t gonna lose it if they have to pay the tariff,” Farr said.

Meanwhile, grower Espinosa continues to exploit Ecuador’s unparalleled growing conditions--12 hours of daily sunshine, rich volcanic soil and a mild, rainy climate at an 8,000-foot altitude. It’s the sort of thing that can’t be legislated.

Espinosa is expanding his business and plans to add 50 workers this year, bringing the payroll to 400. He also plans to double his greenhouse space here in Cayambe, adding an additional 10 acres. New varieties of roses, purchased in Holland and Spain, will be planted in an attempt to keep his company ahead of the fickle market.

Espinosa is a Utah State graduate whose father founded the family company, Agrocoex, in 1985. Rodrigo’s brother Francisco, another Utah State alumnus, also helps run the fast-growing company.

With their luxuriant size and aroma, Ecuadorean roses like Espinosa’s have attained enormous market vogue, said Richard Y. Evans, a specialist in environmental horticulture at UC Davis.

“They get a thicker stem and bigger flower head, and bigger is always better in the minds of many people who buy roses,” Evans said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Budding Trade

The elimination of U.S. duties on “legitimate” farm imports from the Andean Pact nations (Ecuador, Colombia, Peru and Bolivia) in 1991 accelerated flower imports from those countries. Imported flowers now make up 60% of cut flower sales in the United States.

FLOWER SOURCES

The biggest exporters to the United States in 1995:

Colombia: 65%

Netherlands: 11.6%

Ecuador: 10.2%

Mexico: 3.8%

Other: 9.4%

ECUADOREAN EXPORTS

Ecuador has seen the sharpest growth in exports to the United States. In millions of dollars:

1996: $105

CALIFORNIA FLOWERS

Flowers are California’s 10th most valuable agricultural product: