Products registered with a Geographical Indication (GI) label account for an annual trade value of more than $50bn worldwide, said the Food and Agriculture Organization (FAO) and European Bank for Reconstruction and Development (EBRD) work.
FAO and EBRD said while the concept is not new (more than 10,000 GIs exist) such products are increasing in developing countries and regions. GIs are recognized as intellectual property rights (IPRs).
Nine case studies to assess impact
It analysed economic impact of GI registration in nine case studies: Colombian coffee, Darjeeling tea (India), Futog cabbage (Serbia), Kona coffee (US), Manchego cheese (Spain), Penja pepper (Cameroon), Taliouine saffron (Morocco), Tête de Moine cheese (Switzerland) and Vale dos Vinhedos wine (Brazil).
For Colombian coffee, share of the price transmitted to producers by the National Coffee Federation increases by 25% with registration of the protected geographical indication (PGI).
A GI label for Futog cabbage, grown alongside the Danube River in northern Serbia, has provided a community of growers with a rise in income, with some farmers achieving a 70% increase in sales prices.
“Since the registration of the product, local producers have begun working more closely together, and this has helped to protect the unique quality of the Futog cabbage and its agricultural tradition. It has also helped to defend its name and reputation, which had often been misused in the past,” said Miroljub Jankovic from the Futog Cabbage Association.
The price of substitute Bravo cabbage rose with PDO registration (from RSD 8.62/kg to RSD 11.83/kg on average).
In all cases origin-linked registration increased price of the final product with an added value of between 20 and 50%.
One reason is consumers identify characteristics – such as taste, colour, texture and quality – in products with Geographical Indication status and are willing to pay higher prices.
Kona coffee had a 250% production increase between 1995 and 2015 and 36% more producers from 1991 and 2012.
However, Vale dos Vinhedos wine saw a 78% reduction in production between 2012-2014, following protected designation of origin (PDO) registration that strongly modified some practices.
Number of destinations of Darjeeling tea rose from 35 countries in 2004 to 45 in 2015.
“In our regions, which neighbour the EU, there is strong interest in GIs from governments as they can see the extent to which they have triggered positive rural development in countries such as France and Italy,” said Natalya Zhukova, EBRD director, head of agribusiness.
“Now, our agribusiness clients from the retail and processing sectors are also interested in supporting GI processes and markets as they can see that consumers in local and EU markets are interested in food origin and quality.”
Origin label process
In the case of Penja pepper, a white pepper grown in the Penja Valley’s volcanic soil in Cameroon and the first African product to receive the GI label – local farmers increased incomes six-fold.
“The process – from setting standards to registration and promotion – has benefited not only local farmers, but the whole local area in terms of revenues, productivity, the growth of other connected industries, and importantly, the inclusion of all stakeholders,” said Emmanuel Nzenowo, from the Penja Pepper producers’ association.
Potential pitfalls include small-scale or traditional producers being excluded if specifications are complex or onerous in packaging or safety and environmental impacts must be considered to protect against over exploitation of natural resources.
Each country defines laws for registering their labels but this is regulated under an international legal agreement among World Trade Organization members.
Creation of GI labels stimulates public-private sector dialogue as public authorities are often associated with the registration and certification process.
“Geographical indications are an approach to food production and marketing systems that place social, cultural and environment considerations at the heart of the value chain,” said Emmanuel Hidier, senior economist in FAO’s Investment Centre.
“They can be a pathway to sustainable development for rural communities by promoting quality products, strengthening value chains, and improving access to more remunerative markets.”