ILO/SAMAT Discussion Paper No. 13 THE IMPACT OF GLOBALIZATION ON LOCAL COMMUNITIES: A CASE STUDY OF THE CUT-FLOWER INDUSTRY IN ZIMBABWE Robert Davies INTERNATIONAL LABOUR ORGANIZATION SOUTHERN AFRICA MULTIDISCIPLINARY ADVISORY TEAM (ILO/SAMAT) HARARE, ZIMBABWE ACTION PROGRAMME ON GLOBALIZATION, AREA-BASED ENTERPRISE DEVELOPMENT AND EMPLOYMENT GENEVA 2000 Copyright and ISBN page ISBN 92-2-112174-7 ii ILO/SAMAT Policy Paper Series _________________________________________________________ 1. Labour Standards in Export Processing Zones: A Southern African Perspective Joost Kooijmans, David Tajgman and Aurelio Parisotto, 1996 2. Shaping a Labour Market Based Training Policy for Lesotho Torkel Alfthan and Theo Sparreboom, 1997 3. The Social Protection of Migrant Workers in South Africa Elaine Fultz and Bodhi Pieris, 1997 4. Labour Migration to South Africa in the 1990s ILO/SAMAT, 1998 5. Industrial Relations in Southern Africa: The Challenge of Change Tayo Fashoyin, 1998 6. Definitions and Legal Provisions on Child Labour in Southern Africa Joost Kooijmans, 1998 7. Employment Injury Schemes in Southern Africa: An Overview and Proposals for Future Directions Elaine Fultz and Bodhi Pieris, 1998 8. Occupational Health and Safety in Southern Africa: Trends and Policy Issues Rene Loewenson, 1999 9. Agriculture, Employment and Poverty in Malawi Thandika Mkandawire, 1999 10. Improving Labour Market Information in Southern Africa Theodore Sparreboom, 1999 11. Social Security Schemes in Southern Africa: An Overview and Proposals for Future Development Elaine Fultz and Bodhi Pieris, 1999 12. Enclavity and Constrained Labour Absorptive Capacity in Southern African Economies Guy C.Z. Mhone, 2000 13. The Impact of Globalization on Local Communities: A Case Study of the Cut-Flower Industry in Zimbabwe Robert Davies, 2000 iii iv Table of Contents _________________________________________________________ Foreword ............................................................................................................................................................... vii Overview ................................................................................................................................................................. ix 1. Introduction .................................................................................................................................................. 1 1.1 Globalization and Zimbabwe ....................................................................................................................... 1 1.2 Sources of information ................................................................................................................................. 2 2. Background to the Zimbabwean cut-flower industry ............................................................................... 2 2.1 The structure of the industry......................................................................................................................... 4 2.2 Production and export trends ....................................................................................................................... 6 3. A framework for analyzing the cut-flower industry ................................................................................. 8 3.1 The macroeconomic context ......................................................................................................................... 8 3.2 Identifying the community impact .............................................................................................................. 10 3.3 The price chain ........................................................................................................................................... 11 3.4 Set-up costs ................................................................................................................................................. 13 3.5 Production process and costs ..................................................................................................................... 16 3.6 Financing ................................................................................................................................................... 18 3.7 Transport .................................................................................................................................................... 19 3.8 Marketing ................................................................................................................................................... 20 3.9 Labour ........................................................................................................................................................ 21 4. Labelling ..................................................................................................................................................... 24 4.1 Background to labelling programmes ........................................................................................................ 24 4.2 Environmental issues .................................................................................................................................. 27 4.3 Labour issues .............................................................................................................................................. 29 4.4 Assessment of labelling issues .................................................................................................................... 30 5. Conclusions ................................................................................................................................................. 34 References ............................................................................................................................................................ 37 Appendices ........................................................................................................................................................... 39 Appendix 1: Questionnaire administered to cut-flower farmers ............................................................................ 41 Appendix 2: Questionnaire administered to workers on cut-flower farms ............................................................. 42 Appendix 3: A basic framework for analyzing the cut-flower price chain ............................................................. 45 Appendix 4: Grading and wages for agro-industrial workers ................................................................................ 47 Appendix 5: Some responses from cut-flower workers on case study farms ......................................................... 49 Tables, figures and boxes Table 1: Details of the five farms used in case studies ........................................................................................... 3 Table 2: Cut-flower workers interviewed during farm visits .................................................................................. 4 Table 3: Zimbabwe’s cut-flower exports relative to total exports, selected years .................................................. 4 v Table 4: The distribution of cut-flower producers by sub-region, 1993 .................................................................. 6 Table 5: The contribution of cut-flowers to the mass and value of Zimbabwe's horticultural Exports, 1985-98 ...................................................................................................................................... 7 Table 6: Zimbabwe's contribution to European Union imports of roses, 1991-95 .................................................. 8 Table 7: Number of countries to which Zimbabwean cut-flowers are exported, 1981-98 ...................................... 8 Table 8: Typical variable costs, 1992/93 .............................................................................................................. 18 Table 9: Share of cut-flower exports carried by Affretair, 1989-98 ..................................................................... 20 Figure 1: The cut-flower price chain: Direct and indirect effects .......................................................................... 12 Box 1: Bias of the sample ....................................................................................................................................... 3 Box 2: Infrastructure development on cut-flower farms ....................................................................................... 16 Box 3: Example of labour payments ..................................................................................................................... 22 Box 4: National Employment Council regulations ............................................................................................... 23 Box 5: Assistance to workers on cut-flower farms ............................................................................................... 24 Box 6: Occupational safety on cut-flower farms ................................................................................................... 28 Box 7: AIDS on cut-flower farms .......................................................................................................................... 32 Box 8: How cut-flower farms can improve working conditions for their employees ............................................ 33 Box 9: Comparison with Uganda and Tanzania...................................................................................................