In among the many problems caused by the decision not to fly in the ash-cloud, spare a thought for several very poor African countries who earn important foreign exchange by selling fresh fruit, vegetables and flowers to European markets and depend on air cargo to do so.
This evening here in Addis Ababa I bumped into the owner of one of the big flower-exporting businesses. He was looking pensive. Unseasonal rain had damaged part of his crop, and now he is unable to get his roses into European markets. A whole container had had to be destroyed because there was nowhere for them to go. On the back of an envelope, he calculated that the blockage of rose exports is costing Ethiopia about €200k a day. This may not sound very much but it is a big chunk of the export earnings of a poor nation.
2 Comments
Liam · April 19, 2010 at 11:23 am
Owen, are these companies insured? If so, then it’s not really them losing the money, right? And if not, why aren’t they?? Surely this is exactly the thing that one should insure for – an extremely rare but highly damaging event that contains no moral hazard.
Brian Barder · April 19, 2010 at 9:01 pm
One of the UK television channels had a report from Kenya today on exactly this sad subject. A small Kenyan company exporting stunningly beautiful roses and other flowers was having to destroy almost all of them. And these small companies and entrepreneurs are liable to be ruined by a setback like this. (I have no idea what the insurance situation is: I wonder if these people could afford the premiums?)
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