AGOA Success Story - Coming Up Roses

AGOA Success Stories – Coming Up Roses The cut flower market represents a huge source of international import demand – the U.S. alone imports more than $600 million of cut flowers each year. It is an extraordinarily challenging market for new international competitors to enter, with hyper-demanding scheduling/delivery and quality standards to be met.

USAID has helped drive approximately $12.5 million in cut flower exports under AGOA since 2010

However the African Growth and Opportunity Act (AGOA), recently renewed for a 10-year period by the U.S. Government, provides strong incentives for African exporters in non-traditional sectors such as cut flowers to look to the U.S. market as major source of future export growth. With the support of USAID’s East Africa Trade and Investment Hub program, a new cadre of East African entrepreneurs are rising to take advantage of this opportunity, laying the groundwork for an expansion in cut flower sales that could become a major driver of income and employment growth under AGOA over the next decade.

Sub-Saharan African cut flower producers are making impressive inroads into the highly competitive U.S. market. East Africa, in particular, enjoys a range of climates from arid to tropical permitting a wide range of flower varieties to be grown. Despite intense competition from Colombia and Ecuador, African producers have been able to significantly increase the total value of exports to the United States. Kenya doubled its exports to the United States between 2010 and 2014 to $4.3 million, while Ethiopian exports to the U.S. are expected to reach $1 million in 2015. Tanzania is another emerging East African cut flower producer, and currently exports 90 percent of total production to wholesalers in the Netherlands.

The Trade and Investment Hub has provided strategic market linkage support designed to help penetrate the extraordinarily competitive and time-sensitive cut flower market through sponsorship of Origin Africa pavilions at major cut flower international trade shows, including the U.S.-based International Floriculture Expo (the premier U.S. trade show for cut flowers). For example, the Trade Hub supported growers to set up an Origin Africa Pavilion at each of the last 5 International Floriculture Expos; and effectively linked Ethiopian growers directly to key U.S. buyers, including Costco, Safeway and

Whole Foods, as well as major U.S. wholesalers such as Sun Kissed Flowers.

USAID has also helped address key logistical challenges to increased East African flower exports to the U.S. A lack of direct flights from East Africa to the United States has hampered the region’s capacity to compete with other cut flower exporters. In response the Trade and Investment Hub worked with Sun Kissed Flowers and the Ethiopian Horticulture Producers and Exporters Association to develop a pilot program consolidating flowers from smallholder farmers for export, via direct flights from Addis Ababa to Los Angeles and Dulles airports.

Tanzania has also significantly enhanced its export capacity in the cut flower industry, and much of this progress has been catalyzed through strategic Trade Hub marketing and technical interventions.

In this regard, the Trade Hub has worked with the Tanzania Horticulture Association (TAHA) on innovative market linkage and logistics support activities; including supporting their participation at past International Floriculture Expo events in Miami.

The Trade and Investment Hub also supported the establishment by TAHA of a business company, TAHA Logistics, to handle industry promotion, perishable produce, clearing and freight forwarding, shipment tracking, airfreight and sea freight booking. Overall Tanzania now exports more than 50 flower varieties composed of cut flowers and Chrysanthemum cuttings to the EU and the U.S. The resulting improvement in cut flower marketing and logistics networks across East Africa has also created fresh opportunities for East African horticultural associations and their members in other high growth sectors. As a result, TAHA is now working with its 15,000 farming members to increase exports of ginger and garlic under the fair trade regime, while the Ethiopian Horticulture Association is developing an out-grower scheme with its commercial flower producers to support small-scale farmers increase fruit and vegetable production.

Overall USAID’s Trade and Investment Hub market-matching and logistical support initiatives have helped drive more than $12.5 million in cut flower exports under AGOA. With the renewed AGOA Agreement in place, future growth prospects seem extraordinarily bright.