Marketing ACP agricultural products using GIs and origin branding
There is a growing interest in identifying specific successful strategies for the marketing of products whose quality and reputation are strongly linked to their geographical origin in African-Caribbean-Pacific (ACP) countries. Developing countries have started a few years ago with products like the Tequila in Mexico, the Colombian Coffee or the Darjeeling Tea in India. Different types of tools exist for the mobilisation of quality linked to the origin of various products: Registered and non-registered protected geographic indications (GIs), as specific intellectual property (IP) instruments or marks, as well as other forms of mobilisation of the origin. In ACP countries, regional institutions are important platforms that play a major role in regulating IP. The African Intellectual Property Organisation (OAPI), African Regional Intellectual Property Organization (ARIPO), the Pacific Islands Forum Secretariat (PIFS) and Caribbean Community and Common Market (CARICOM) are key players to encourage mobilisation of the origin in commercial strategies.
The term “GI” (Geographical Indications) refers to the origin of a given product where the product has particular characteristics and a reputation related to its origin.
The WTO 1994 Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement does not provide any specific legal system of protection for GIs, leaving this task to member countries. If a member country has established a formal registration process to recognise GIs within its territory, then a product registered as such can be referred to as a “protected GI”. However, a GI may exist without registration or without seeking registration, unless the name or product is considered generic. In certain situations, a collective mark or certification mark is the most effective legal protection for a GI.
Increasing interest and development of GIs and origin brands
In ACP countries, the number of products with quality linked to the origin is indeed rather high. According to our documentary study, more than 150 of them have already been studied or inventoried: the potential of the mobilisation of the origin in marketing strategies is well ascertained, and seems appropriate in ACP countries. What is less clear is to which extent the valorisation of quality linked to the origin can boost commercial strategies that pay back small-scale producers fairly. In other words, how such strategies can prevent the remuneration of quality products by consumers being entirely retained by the various intermediaries of the supply chain and the retail sector.
Some products are known and their value recognised primarily by local populations, being regional or national. Up-scaling and accessing new markets is most of the time challenging because of the limited resources of small-scale producers but also of other operators all along the value chain. However, demand for these specific products is growing particularly in urban centres. Hence better linkages between producer communities and those emerging markets would increase producers’ incomes, create value along the chain and reduce import dependency. The stakes are therefore economic (increased and better distribution of added value), cultural (valorisation of regions and local know-how) and related to food security (resilience of local agro-ecological systems and import substitutions).
Kenyan Coffee as an example
The Kenyan Coffee value chain is characterised by extreme fragmentation at the agricultural level and concentration of power among a few players downstream.
As the Kenyan value chain is regulated by the Coffee Act, there is a mandatory traceability and grading system, which is under the supervision of the Coffee Directorate of Kenya (CDK). The Kenyan Coffee Act has organised a vertical redistribution of the market price among the stakeholders. Money goes from the dealers to traders/millers and from traders/millers to producers. Regarding the consequences of and interactions between the GI implementation and these market institutions of pricing, some conclusions can be drawn.
Price stabilisation is a motivation to enter the GI scheme of protection. Additionally, the view is shared among most of the stakeholders that have been interviewed during the study, that the direct selling system is more suitable for the valorisation of coffees with a specific identity linked to its origin, while the auction system is a “mass channel” more adapted to a “national GI”. This important setting will certainly strongly affect the evolution of the stakeholders’ interest and involvement in the GI initiatives.
There is plenty of evidence that a strong “origin” effect benefits the Kenyan Coffee. The CDK and other major national institutions involved in the governance and support of the Kenyan value chain (Kenyan Intellectual Property Institute and Kenya Bureau of Standards for example) have strong interest in developing this “origin” effect, and have taken several initiatives for lobbying the adoption and implementation of the Geographical Indication Bill (still in preparation) in order to reinforce the position of the Kenyan Coffee on the global market. Their motivations are to protect against misuses of the Kenyan origin on coffee, and to follow the successful trend started with the GI initiatives of the Coffee of Colombia and Jamaica, and the origin-branding initiatives taken by the Ethiopian Coffee producers. The brand “Kenya Coffee Mark of Origin” is the Kenyan trademark registrar and was publically presented in January 2015.
As for export-oriented products, the number of concerned products (coffee, tea, cacao, pepper, etc.) and the volumes at stake, as well as the national economic importance of these products justify proactive supportive policies from the different technical and financial partners. However, several constraints hinder the adoption of such approaches: First of all the size of supply chains and particularly the multitude of stakeholders. Cultural and social factors also play against implementation, as well as producers’ technological level resulting in a high heterogeneity of quality or an incapacity to respect food safety norms. Hence, the specific quality loses in importance in the eyes of policy makers. On the producers’ side, their weak financial position does not incite them to engage in commercial strategies that start generating benefits after several years only.
On the benefits side, differences exist between prices of products with quality linked to the origin and those of generics, both for export products and products mainly sold on the domestic market. These differences appear more significantly in the main target markets of these products. This is clearly the case for coffee, cacao and some spices, such as pepper, on the international markets and vegetable, fruit, cereal and honey on domestic markets. (see Table 1)
On the costs side, certification costs are not limited to the audit costs charged by certification bodies, but include additionally induced costs. In the ACP context, these additional costs comprise for example: training costs, investments to comply with requirements, costs of the constitution of the producers’ organisation (PO), and the development of a system for internal quality control, etc.
Explanation: The table shows the differences in percentage between the prices paid by consumers for some origin-linked ACP products and similar products that have no link to their place of origin, on their national markets (or in the region mentioned)
Recommendations to governments and public institutions of ACP countries
International (TRIPS, Lisbon Agreement) and European protection
The first recommendation is to push for a stronger protection of their GIs through the accession to the Lisbon Agreement and the mutual recognition of GIs with the European Union. The on-going revision of the Lisbon Agreement is a promising way for achieving better protection of geographical indications at global level.
The harmonisation of the protection regimes will contribute significantly to the integration process. This can be achieved through a common legal definition of the GI, consistence between the product and its origin guaranteed by recognition procedures and by certification, and the promotion of a common visual logo.
Enforce laws and rules
Often states favour national GIs putting the focus on the fame of the country satisfying the demand coming from the industry, who seeks first of all generic quality. The main risks of this approach are heterogeneity in quality and a very weak identity on the market. Stakeholders are recommended to take into account the specific qualities linked to smaller regions that can be promoted on niche markets. The corollary of this is to make sure that regulations do not exclude local GIs with higher specificity in close relation with their place of origin.
Empowerment of decision makers, NGOs, POs, trainers and researchers
The success of GI strategies is strongly conditioned by training programmes for decision makers, public administrations, civil society, as well as development agents, agro-technicians, researchers and trainers belonging to research and training institutes.
Research programme on GIs in pilot countries
In all contexts where this is possible, strategies for products with quality linked to the origin would benefit from research, in particular participatory research approaches triggering stakeholder mobilisation.
This article is based on a study commissioned by the European Commission in 2013 and assesses the potential of marketing the agricultural products of ACP countries using geographical indications and origin branding.
Authors: Dominique Barjolle is an agroeconomist, senior researcher and lecturer at ETH Zurich. Monique Bagal is a Legal advisor in the field of Geographical Indications and she is currently completing a Phd at Université de Lyon, France.