1 Introduction
Among the various fields of intellectual property, geographical indications (GIs) law is arguably the smallest in terms of economic importance and the most complex in terms of principles and justification. To get a sense of the relative importance of GIs, in 2012–2013, India had over 43,000 patent applications, over 8,000 design registration applications, over 194,000 applications for trademark registration, but only 24 applications for protection of GIs.Footnote 1
While GI law is rooted in the idea of terroir (a concept we consider below), discussions about GI protection can bring in strands of trademark law, unfair competition, agriculture policies, rural development, environmental protection, and – more distantly – protection of traditional cultural expression and traditional knowledge. These connections can easily lead to simplistic and sometimes false narratives about the potential benefits from different sorts of legal protection of GIs. This chapter describes some of the forces benefiting and burdening effective GI labeling with today’s consumers.
Because those consumers do show an interest in geographic origins, despite the occasional hype, GIs can be – in many circumstances – a useful tool in raising rural incomes in developing countries. Because GI-based marketing can help developing farmers, properly calibrated legal protection of GIs should be part of a “development agenda” for jurisdictions with significant rural economies. In that spirit, this chapter lays out some of the factors determining whether and how GI marketing (and GI legal protection) can help any particular rural region. With those issues in mind, we will consider a few specific examples.
2 Geographical Indications and Terroir
“Geographical indications” is an umbrella term for the various legal mechanisms used to protect geographical designators that tell consumers both the geographic origin of a product and something about the product’s quality and characteristics. The legal standards of protection vary as does the moniker used to designate the protected name (“appellations of origin,” “protected geographical indication,” “protected designation of origin,” “collective mark,”Footnote 2 etc.). Whatever the name used, true appellation laws – and now geographical indications laws – have been traditionally justified by the idea of terroir: that a particular land is a key input for a particular product. The terroir idea is that the product’s qualities “come with the territory” and that there is, as I have described elsewhere, an “essential land/product qualities nexus.”Footnote 3
For example, the French government’s Institut national de l’origine et de la qualité (formerly the Institut national des appellations d’origine) explains an appellation d’origine contrôlée (AOC) this way:
[It] guarantees a close link between the product and the terroir, which is a clearly defined geographical area with its own geological, agronomical, climatic, etc. characteristics, as well as particular disciplines self-imposed by the people in order to get the best out of the land. This notion of terroir encapsulates both natural and human factors, and means that the resulting product may not be reproduced outside its territory.Footnote 4
In the context of wine (but in concepts that apply broadly), terroir can be understood as “the environmental conditions, especially soil and climate, in which grapes are grown and that give a wine its unique flavor and aroma.”Footnote 5 As one Australian wine critic has written: “terroir … translates roughly as ‘the vine’s environment[,]’ but has connotations that extend right into the glass: in other words, if a wine tastes of somewhere, if the flavours distinctly make you think of a particular place on the surface of this globe, then that wine is expressing its terroir.”Footnote 6
The terroir theory in this classic form has always been somewhat “cultural” and largely ignored in many quarters of the agricultural sciences. In his seminal 1947 The Soil and Health, Sir Albert Howard – one of the fathers of modern organic farming – does not mention any such concepts.Footnote 7 In 302 pages detailing how to produce better crops of coffee, tea, cotton, cocoa, wheat, tomatoes, and various fruit, Howard’s concern is the general quality of soil and maintaining soil fertility through natural means, but he never takes up the question of whether enduring variations in soils and climate would produce enduring variations in foodstuffs.Footnote 8 It simply wasn’t an issue for the science-minded but contrarian Howard.
More and more, we understand that the most factually sound “terroir” is microclimatic, i.e., that each field (or small cultivated block) is its own terroir based on particular soil composition, relationship to sunshine, wind, rainfall, and drainage. In other words, single appellations are rarely consistent in key geology, flora, and climate. In fact, the larger the appellation, the more the variation. Geological studies have shown between ten and sixty soil types for the AOC Alsace grand cru.Footnote 9 Discussing “Bordeaux” as an appellation, Thierry Desseauve has noted that it “represents all forms of terroir, all kinds of microclimates, all situations, and finally all kinds of wines and prices.”Footnote 10
Similarly, the United States’ designated “American Viticultural Areas” (AVAs) are probably just “too big … to have real viticultural meaning.”Footnote 11 But this is genuinely a problem for appellations of all sizes. One French wine guide notes that within the Le Minervois AOC (a small region) there are four regions that are differentiated from each other by their terroir and climate.Footnote 12 Many northern California vintners have studied soil and slope characteristics to the point of dividing individual vineyards into “flavor blocks,” i.e., miniature terroirs that are viticulted differently.Footnote 13 Even in the case of salmon, writer Rowan Jacobsen observes that each particular stream may be its own terroir,Footnote 14 undermining any terroir meaning to “Alaskan” or “Norwegian” salmon.
But if this is the reality of terroir, appellations like “Bordeaux,” “Napa Valley,” or “Burgundy” make little sense from a terroir perspective. Nation-wide appellations like “Feta” or “Irish whiskey” make no sense at all. Large (but not too large) geographic areas like “Idaho potatoes,” “Parma ham,” and “Melton Mowbray Pork Pies” may make sense from the perspective of consistent cultural traditions, but the problem is that those traditions are transportable – a contentious point underlying the Europe/New World feud over GIs.
Not surprisingly, over time, there has been a loosening of the connection between terroir and GI law. The 1958 Lisbon Agreement requires that a product’s “quality and characteristics” be “due exclusively or essentially to the geographical environment” while recognizing that “human factors” could contribute to this equation.Footnote 15 In contrast, the definition of “geographical indications” in the TRIPS Agreement requires that the “given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin.”Footnote 16 The 2015 Geneva Act revising the Lisbon Agreement offers two different definitions of a protectable GI: one mimics the TRIPS “geographical indication” definition while the other recites the 1958 Lisbon formulation but adds “and which has given the good its reputation.”Footnote 17
No one knows whether there is any difference between product qualities being “essentially” or “exclusively” due to the land, so it is unclear what the loss of “exclusively” means. What is clear is that the addition of “reputation” to the legal definitions could, broadly read, obviate any land/qualities connection of the sort that has been fundamental to the notion of appellations.Footnote 18 As Irene Calboli writes, this “allows GI producers to partially ‘de-territorialize’ the production of GI-denominated products” and “this partial ‘delocalization’ runs against the very rationale for GI protection – the linkage between the products and the terroir.”Footnote 19 And this is exactly the case with some GIs, such as the United Kingdom’s “Melton Mowbray Pork Pies” and India’s “Feni” liquor.
3 Geographical Indications Protection – Magic-Like Claims, Unproven Results
If the justification for legal protection of GIs has shifted in recent years, the strength of the European Union’s advocacy for GIs – mainly on behalf of France and Mediterranean Member States – has not. Here is an example of the European Commission’s claims about GIs in a more somber moment:
The protection of geographical indications matters economically and culturally. They can create value for local communities through products that are deeply rooted in tradition, culture and geography. They support rural development and promote new job opportunities in production, processing and other related services.Footnote 20
This statement is unimpeachable: GIs do “matter,” “can” do the things claimed, and appear to “support” rural development.
But at other times the Commission takes a more rhetorical tack. For example, a 2012 study commissioned by the European Union found that for 2,768 GI products from 27 EU countries in 2010 “[t]he average price premium for GI products was found to be 2.23, which means that GI products were sold 2.23 times as high as the same quantity of non-GI products, which shows that using GIs can achieve a higher market price.”Footnote 21
Of course, the evidence does not “show” that. Even if all the data are correct, what we have is a correlation (not causation) between GI protection and higher prices for GI products as compared to non-GI products in the same categories. Perhaps products bearing GIs command a price premium because they simply are, on the whole, better – with or without the GI labeling; or perhaps the products bearing GIs command a price premium because they are simply more famous, with or without the GI labeling; or perhaps they are better advertised. Ironically, the higher average price may even be because of non-EU demand for the GI-labeled products in jurisdictions that do not provide the heightened level of legal protection that the European Union claims is necessary (i.e., demand in the United States, Japan, China, etc.).
A more extreme claim is found in the 2009 “Teruel Declaration” of OriGin, an NGO dedicated to promoting GIs:
By providing jobs for millions of individuals around the world, helping preserve the environment and ensuring that the globalization of markets does not encroach on the diversity, quality and tradition of origin products, Geographical Indications (GIs) play a vital role in our economies and societies. Producers, both from developing and developed countries, increasingly rely on GIs for the sustainable development of their communities.Footnote 22
This passage is well beyond the usual overstatements from trade associations or nonprofits. Instead of focusing on increased price premiums (even without a causal analysis), OriGin makes a blanket statement that GIs “provid[e] jobs for millions of individuals” – as if the underlying products themselves would not sell at all without the GI protection. Unfortunately, some otherwise intelligent people buy into this kind of rhetoric. In a 2005 paper presented at a World Intellectual Property Organization (WIPO) meeting, a Kenyan government official reasoned that “GI protection would transform African farmers from raw material producers to exporters of differentiated products easily identifiable in the global marketplace”Footnote 23 and argued that GI protection against usurpation or dilution would “benefit” dozens of local Kenyan products – even though these products are generally unknown in developed economies.Footnote 24
3.1 No Across-the-Board Effects
But thoughtful people concerned about rural development know that strong legal protection of GIs is not such magic. Laws by themselves do not create commercial or reputational value: EU-level GI protection globally would not suddenly make “Asembo mangoes” or “Muruanga bananas” into premium-price products. As Carlos Correa has said, “geographical indications, like trademark, may in some cases play a decisive role in generating a premium over and above the price of equivalent goods, while in other cases their contribution cannot be distinguished from that attributable to the product itself.”Footnote 25 Bald claims about the economic value of GIs ignore the fact, as Carlos Correa has wisely observed, that “the final price of the product that incorporates an intellectual property component is a poor indicator of the value of the intellectual property itself”Footnote 26 and that “[s]eeking to quantify the current and, particularly, the potential, value generated by the use of a geographical indication is an extremely difficult task.”Footnote 27
In the words of a 2008 study commissioned by the European Commission to study the effect of “protected designation of origin” (PDO) and “protected geographical indication” (PGI) status:
A key limitation of the evaluation of the scheme is that, at the present time, data on the administrative implementation of the PDO and PGI scheme and on the PDO/PGI products are scant as, typically, Member States do not monitor the administrative and statistical aspects of the scheme such as the value or volume of production, sales, and prices of PDO and PGI products.Footnote 28
As that 2008 study further explained, although there are case studies claiming positive relationships between PDO/PGI status and improved prices, “[t]he limited number of case studies does not allow one to draw firm conclusions for the overall population of PDOs and PGIs.”Footnote 29
There are a number of good reasons why it is extremely difficult to figure out what impact GI legal protection has on the price of GI-labeled products, let alone whether different levels of legal protection might have different impacts on those prices:
[1] For some products, it is difficult if not impossible to disentangle premiums produced by trademark-protected brands and any premium produced by the GI. Scotch whisky would be a prime example.
[2] For some products, the price premium apparently preceded the formal GI status. For example, this is clear from the application for PGI status made by the Melton Mowbray Pork Pie Association:
Melton Mowbray Pork Pies are clearly distinct from other pork pies in their packaging, design and marketing at point of sale. They carry a price premium compared to other pork pies on the market place of 10–15 percent because they have a specific reputation that sets them apart as different and worth paying for.Footnote 30
[3] Studies and reports showing that local citizens place a premium on local GIs simply do not help us understand the mechanisms by which we could induce developed world consumers to pay more for products from distant developing locales.
[4] Even where a protected GI appears to command a price premium, the GI labeling and marketing often imposes higher production costs so the net price premium is unknown. In its 2008 review of eighteen case studies of EU-protected GIs, a consulting firm hired by the European Commission found that “[i]n 14 out of 18 cases, the price of a PDO/PGI product is higher than the price of the comparator product” but that “[i]n 10 cases, the costs of producing a PDO/PGI is higher than the cost of producing its comparator.”Footnote 31
One serious attempt to measure the effect of a legally protected GI is Dwijen Rangnekar’s study of “Darjeeling” tea in the WTO’s 2004 World Trade Report.Footnote 32 “Darjeeling” received GI protection as a certification mark in a number of jurisdictions in the 1980s – the United Kingdom, the United States, Canada, Japan, Egypt, and a number of European countries;Footnote 33 it has also been protected as a certification mark in India for decades.Footnote 34 Rangnekar and his colleagues found that (at least this level of) legal protection of the Darjeeling GI has had no noticeable effect on price over a twenty-year period. According to the report, “[t]he results obtained suggest that GI protection has increased the price of Darjeeling tea in total by less than 1 per cent in real terms over the 1986–2002 period. This result is suggestive of only a very modest price premium effect of GI protection.”Footnote 35 Of course Darjeeling is a very famous kind of tea, suggesting dimmer outcomes for less known GIs.
3.2 Why People Believe in Geographical Indications Magic
If the evidence is so mixed, what is the attractive power of stronger GI protection? How does the GI rhetoric take hold with people who do not come from privileged and famous agricultural locales like Champagne, Napa, or Parma? Developing countries are surely not looking to guarantee that they will pay more to producers of Champagne, Bourbon, Roquefort, and Feta.
The answer is pretty straightforward: there is something quite appealing about a law that will protect the name and integrity of one’s local products and supposedly propel those products into international recognition. Most people have some points of pride for their geographic homes and that local pride is often centered on food. The European Commission’s message is simple: your home probably has a unique and special local product and it would command respect and price premiums globally if only it had stronger legal protection.
That is an understandably seductive message, whether for people in Bergamo, Italy, who take “pleasure in consuming local products” and “regularly choose their own lard, salami and cheeses over other, even more prestigious, varieties”Footnote 36 or, half way around the world, for coffee farmers in the Highlands of Papua New Guinea who “think they are constantly being underpaid for their coffee, because it is better than all other coffee”Footnote 37 (even though Papua New Guineans generally do not drink coffeeFootnote 38). In this sense, strong GI protection becomes a matter of “respect” for their local products.Footnote 39
4 The Good and Bad of Geographic Origins Marketing
We should also recognize that GI-based marketing must respond to changing consumer tastes and concerns, only some of which benefit GIs.
4.1 The Appeal of Geographic Origin Marketing
A GI label can be, for a wide range of consumers, at least an indicator of the geographic origin of the product. In other words, geographic origin information may be important to the consumer for reasons completely separate from quality or characteristics (the terroir); in that context the GI label will serve a market and marketing function broader than the function attributed to it by GI theory. For example, interest in geographic origin of foodstuffs may be rooted in any of the following:
a desire to lessen transportation effects on the planet, e.g., a Californian consumer might prefer Guatemalan or Costa Rican coffee over Ethiopian coffee;
a desire to support countries with better human rights, worker rights, or democracy records, e.g., a preference for Costa Rican over Guatemalan coffee;
a desire to support fellow countrymen, whether patriotic or nationalistic, e.g., a preference for Hawaiian Kona coffee over Sulawesi or Jamaican Blue Mountain coffee;
a simple desire for a more specific, nonindustrial (or less industrial) narrative.
It is not hard to see strands of evidence supporting these different consumer interests – and how this connects or does not connect with protection of GIs.
Consider the first of these: the trend toward “localization.” As Daniel Gervais notes, some consumers’ insistence on geographic origin labeling “partly stems from a desire to buy more locally produced products and to reduce the carbon footprint of their consumption patterns.”Footnote 40 We see this trend not only in the rise of farmers’ markets and farm-to-table restaurants but in industrial producers informing customers of local sourcing – as when McDonald’s in Switzerland assures its customers that they work with Swiss agricultural partners.Footnote 41
This trend toward geographic identification can rely on – and strengthen – GI-based marketing, but it does not require full-fledged GI laws.Footnote 42 More importantly, to the degree consumers show preferences for local production, this does not bode well for developing country farmers using GIs to extract economic rents from developed country consumers. On the other hand, as a growing middle and upper middle class emerges in cities like Mumbai, Chengdu, Johannesburg, Kuala Lumpur, and Sao Paulo, this trend might produce parallel “local” substitution – if, for example, Mumbai residents increasingly prefer Goan Feni over “western” liquors.
4.2 Geographical Indications Marketing Amid an Abundance of Labels
In a broader perspective, today the geographic source information that is provided by GI labeling competes with a growing array of labels conveying information about (a) the product, and (b) what in international trade is called “process and production methods.” The former include “organic,” “non-GMO,” and “gluten-free”; the latter include “shade-grown,” “sustainable,” and “fair trade.”
We do not have any meaningful empirical evidence on how consumers – consumers in different places and different socioeconomic groups – respond relative to these different labels. There is no question that consumers are paying and expect to pay price premiums for products that are guaranteed to have many of these characteristics. But we do not know if consumers will pay more for geographic origin labeling than for organic, more for GI certified labeling than fair trade certified labeling, etc. For example, imagine a study that showed us the different price points that Australian or Japanese, Singaporean or American consumers would pay for the following different labeling/certifications:
That kind of empirical evidence would more meaningfully guide policy makers for at least three reasons: first, whether for Papua New Guinea coffee growers or Colorado iced tea bottlers, each of these certification processes costs time, effort, and money;Footnote 43 second, some retail outlets are available or foreclosed based on different labeling and rural practices;Footnote 44 and, third, there is good reason to think that consumers are or at some point will start suffering “label fatigue.”Footnote 45
While not the subject of this chapter, there is also a real danger that GI labeling will be misunderstood by consumers as signifying some guarantee of organic, natural, non-GMO, or fair trade production.Footnote 46 That connection is implied by comments about GIs enhancing “sustainability,” but sustainability of rural economies and “sustainable” farming are quite different. For example, according to one French consumer group study, French wine producers only use 3.7 percent of France’s farmland but account for 20 percent of that country’s pesticide use.Footnote 47 Indeed, organic winemakers in Burgundy have been fined and threatened with prosecution for refusing to use pesticides.Footnote 48 The confusion of GI labeling with production guarantees (“organic”) could accrue to benefit developing countries’ farmers, but price premiums through consumer confusion is surely not an acceptable policy objective.
5 A Complex Decision, Hopefully for Farmers
All of this produces a complex picture for policy makers who would help farmers in developing countries. One must assess the relative costs and benefits of different production and labeling practices that “de-commodify” local production. And that assessment has to be in the context of what is possible in that locale.
In the case of GIs – whether a sui generis system or a certification marks approach – one will need to define the geographic area for eligible production. This process can easily become highly politicized. Ironically, drawing the geographic boundaries should be easier when the GI seems to have little prospective reputational value. The next element is defining the production standards: ingredients, from where raw ingredients can be sourced, recipes, aging and fermentation practices, permissible technologies for distillation and/or storage, etc. As Dwijen Rangnekar notes:
A GI requires documentation of the production rules, thus the need for the relevant group of producers in the region and across the supply chain to arrive at some consensus. All this raises questions of participation, debate, disagreement, cooperation and all the messiness of politics and economics of who is involved, who is excluded, and who is leading the process of rule-making.Footnote 49
In the case of certification marks, a private leadership group can pretty much establish their own production standards; in the case of sui generis GI law, the producers will have to work with government agencies in what will be extended, detailed public–private sector collaboration.
Central government involvement also raises two other very important issues: capacity and extraction of economic rents. Simply put, the central government may try to extract economic rents by controlling when the GI designation can be used and by whom. There is always a danger that the GI will be used to strengthen a government’s role in the market – and that may or may not help rural citizens. The capacity issue is also a serious one. For example, economist Tyler Cowen has observed that “[m]ost African nations simply cannot afford the requirements for safety, labeling, and control that European-style regulation imposes on them.”Footnote 50
Fair trade and organic production and certification practices also impose a substantial burden in terms of training, labor, and community disciplines.Footnote 51 It may be that there is a broader international community of NGOs that can bring “off-the-shelf” organic, fair trade, and environmentally friendly production systems to rural communities, bypassing central governments. But there are also substantial efforts from the NGO community to help those who would pursue GI labeling.
Farmers, activists, and policy makers should also consider carefully the price differentials that different labeling produces. Discussions of organic, fair trade, and GI labeling are replete with claims about the higher prices that de-commodification brings, but we must focus on (a) whether farmers, rural workers, and rural communities are actually receiving the economic premiums, and (b) if and when higher production costs wipe out the value of those premiums.
With these issues in mind, let’s briefly consider three parables of de-commodification of developing country foodstuffs – Ethiopian coffee, Goan “Feni” liquor, and Papua New Guinea coffee.
5.1 Ethiopian Coffee and the Problem of Quality Control
Humanity’s consumption of coffee began in Ethiopia; the modern, high-end global coffee market is closely identified with Starbucks. So the feud that erupted in 2006 between Ethiopia and Starbucks over Ethiopian coffee names had all the makings of a good news story.
In the past few decades, Ethiopia has taken varied approaches to coffee production, but despite these shifts there seems to be agreement that “[t]he coffee value chain in Ethiopia involves a large number of intermediaries and is largely state-controlled.”Footnote 52 Beginning in March 2005 – during a period of relative liberalization – the Ethiopian government sought US trademark registration for three geographic names used for Ethiopian coffees: HARRAR, YIRGACHEFFE, and SIDAMO. The Ethiopians sought to register the names as regular trademarks. The United States Patent and Trademark Office (USPTO) quickly granted the registration application for YIRGACHEFFE.Footnote 53 But the HARRAR and SIDAMO applications were held up.Footnote 54
Starbucks had already applied for a trademark that included “Sidamo”; its application was for SHIRKINA SUN-DRIED SIDAMO.Footnote 55 More broadly, Starbucks publicly argued that it was a bad idea to grant regular trademarks to these Ethiopian place names, arguing that they are “geographically descriptive terms” and urging “a geographic certification program” to ensure that the names were used to “represent quality products that come from a specific region.”Footnote 56 For their part, the Ethiopians recognized that seeking trademarks for the names was a “new approach,” but said it was justified by the situation of small coffee farmers and traders in the country.Footnote 57
After receiving a blitz of bad publicity – much of it fomented by Oxfam – Starbucks softened its position, and in November 2006, Starbucks and Ethiopia reached an entente.Footnote 58 Eventually, SIDAMO and HARRAR obtained USPTO trademark registration.Footnote 59 Starbucks made some sort of promise to help promote the Ethiopian coffees, and Ethiopia gave Starbucks royalty-free licenses to use the three trademarks in conjunction with its sales of Ethiopian coffees – the same as Ethiopia had done for other coffee retailers.Footnote 60
There are different ways to interpret the Ethiopia/Starbucks dispute. In the dominant public interpretation, Starbucks was already using these geographic names in conjunction with Ethiopian coffees (as the result of buying bona fide Ethiopian beans at auction), and Starbucks did not want to start paying additional trademark-licensing fees to the Ethiopian government. In this narrative – according to Oxfam – Starbucks was trying to avoid paying $US 88–90 million a year to Ethiopia.Footnote 61 It is anyone’s guess how Oxfam got these numbers, and clearly those numbers were false in the sense that Ethiopia soon granted Starbucks royalty-free licenses for the trademarks.
The idea that Starbucks was not paying enough for the geographically labeled product certainly feeds into the GI advocates’ narrative, fueling further misunderstandings. For example, in 2009, a University of Hannover professor characterized the dispute as one in which “[t]he Ethiopian government wants to protect coffee originating in those specific regions by using GIs as opposed to labeling as proposed by Starbucks.”Footnote 62 Of course, that is just the opposite of what happened: Starbucks had proposed the traditional GI mechanism in the United States (certification marks) and Ethiopia has insisted on regular trademarks (i.e., just “labeling”).
As both sides tried to provide popular explanations of their positions, the story did not become much clearer. In a YouTube video, counsel for Ethiopia argued that “[a] certification mark provides much weaker control in the holder of the certification mark.”Footnote 63 Given that certification marks get the same level of protection under US trademark law (Lanham sections 32 and 43), what was Ethiopia’s lawyer trying to say in asserting that a certification mark gives less “control?” The point he may have been trying to make is that once a coffee roaster/retailer purchases coffee beans genuinely produced in the applicable region (and pursuant to any quality controls the certification mark requires), the coffee roaster/retailer would be free to use the appropriate mark (HARRAR, SIDAMO, or YIRGACHEFFE). He may have also meant that certification marks would give the Ethiopian government less leverage over its own farmers – again, as long as the farmer meets the certification mark standards, the farmer cannot be denied the right to sell his coffee as HARRAR, SIDAMO, or YIRGACHEFFE. In contrast, with regular trademarks the Ethiopian government is not required to be even-handed either with Starbucks or its farmers; that really does give it more “control,” particularly if the country’s farmers are increasingly selling directly to coffee roasters/retailers.
But is that the sort of control we want to give an undemocratic, non-transparent central government over its farmers? One trade industry report ominously characterized the Ethiopian government’s efforts this way: “[w]hile certification marks are commonly used as a means of identifying products associated with a particular geographic region, the Ethiopian government elected to assert traditional trademark rights to identify itself as the ultimate source of the country’s specialty coffees.”Footnote 64 In other words, Oxfam’s intervention was clearly helpful to the central government in Addis Ababa but not to the provincial farmers. The effort to obtain regular trademarks may manifest the central government’s fear that, over time, they will not be able to stop direct sales between farmers and foreign buyers – and, therefore, will be cut out of the usual middleman rents that African governments have extracted.Footnote 65
In another interpretative variation, does the quest for regular trademarks manifest an admission by the Addis Ababa government that practically speaking it cannot police even minimal certification standards? This was the suggestion made implicitly by Ron Layton, the head of “Light Years,” an NGO trying to help African countries capitalize on their intellectual property:
So what’s wrong with the regional [certification] model? Layton argues that certification – while it works well for a smaller country like Jamaica – would be too difficult to implement in Ethiopia. There are literally millions of Ethiopians moving coffee beans to only a handful of distributors like Starbucks.Footnote 66
A 2007 report on Ethiopia’s efforts similarly commented that “geographic certification” is valuable, but “it can be a costly mark to maintain” and that “[a]s the majority of Ethiopian farmers still live in extremely basic conditions, it is not a cost they can afford to absorb.”Footnote 67 And Ethiopian officials have been very blunt in their claim that the Harrar, Sidamo, and Yirgacheffe names “refer[red] not to geographical locations, but to distinctive coffee types”Footnote 68 and that “[t]he coffee varieties were not strictly regional … so wine-style designations would have made no sense.”Footnote 69 A benign interpretation of all these statements is that officials in Addis Ababa realize that they cannot establish an effective, dependable system for geographical certification, let alone additional quality controls that EU officials associate with true GIs.
Finally, the denouement of this story also warrants our attention. Did the increased control of the three important Ethiopian geographic coffee labels in the world’s biggest coffee-consuming market help? My own site visits to Starbucks in different cities and review of Starbucks coffee guides show a general absence of Ethiopian coffees in Starbucks stores for years following the dispute. For example, a 2010 brochure for Starbucks in China shows eighteen different coffee offerings; of these, seven are single-source country or region coffees, none of which are Ethiopian GIs.Footnote 70
Indeed, in September 2013, Starbucks introduced into its US stores “a new single-origin coffee from the birthplace of coffee, Ethiopia.”Footnote 71 The coffee is called “Ethiopia” and the words “Sidamo,” “Harrar,” and “Yirgacheffe” do not appear anywhere in the packaging or promotional materials.Footnote 72 This “Ethiopia” coffee “joins Starbucks selection of 20 core and 10 traditional and seasonal whole bean coffees offered at Starbucks retail stores nationwide”;Footnote 73 it is also one of twelve single-origin coffees offered by Starbucks online.Footnote 74 As for Ethiopia’s protected marks, Starbucks appears to offer online only “Starbucks® Ethiopia Yirgacheffe® Espresso Verismo® Pods” in their coffee pod section.Footnote 75 The internal search engine on the Starbucks site also brings up “Starbucks Reserve Sun-Dried Ethiopia Sidamo” and “Starbucks Reserve Sun-Dried Ethiopia Harrar,” but neither of these can be found on the “reserve coffees” page as of May 4, 2016.Footnote 76
From Oxfam’s perspective, this might indicate bad faith on the part of Starbucks, but it might also be simply supply and quality issues;Footnote 77 or Starbucks’ need to rotate among different single-origin coffees; or Starbucks’ concern that “Sidamo” and “Harrar” coffees simply cannot be guaranteed to come from those places. Whatever the explanation, the Ethiopia coffee names saga is a sobering story on quality control and geographic guarantees, government relations to farmers, and the fact that promotion of developing country GIs will often rest with the goodwill of corporations in the developed world.
5.2 Some Observations on Goa’s Cashew Apple Feni
In 2009, Dwijen Rangnekar published an extremely thorough and detailed case study of the development of GI status for “Feni” liquor from Goa, India.Footnote 78 Rangnekar’s research is a case study on the successful establishment of a protected GI: any local leader or NGO working on agricultural development and considering tools for de-commodifying farmers’ production would profit from reading his report.
“Feni” is the name of a liquor that has been produced for centuries in Goa state in India. There are two principal types of Feni: coconut Feni, which was probably first, and Feni made from cashew apples, a tree that was imported in the sixteenth century from Brazil when Goa was under Portuguese rule.Footnote 79 Cashew apple Feni is typically made from fruits that have been allowed to fall to the ground before they are collected.Footnote 80 The apples are crushed, traditionally by foot but then by “stone-mortar crusher[s] using draught animals” and now mechanical crushers.Footnote 81 The juice is fermented for two to four days and then distilled in pot-stills that are of local design.Footnote 82 Historically, Feni was a triple-distilled liquor, but Rangnekar reports that there is now “a certain consensus towards a double-distilled Feni.”Footnote 83
It is not clear how the effort at GI registration got started, but a group of Feni producers organized as the “Feni Association” and worked extensively with the Goa Chamber of Commerce and the Goa Government Department of Science and Technology in drafting an application for protected GI status under India’s 1999 GI law. The application was submitted to the central Indian government in December 2007 and ultimately approved in February 2009.Footnote 84 This private-local government group rose to the bureaucratic challenge, “demonstrat[ing] a substantial effort in assembling the information for a GI application, coordinating the various interests and groups concerned with Feni, then responding to the examination process of the GI registry.”Footnote 85
Preparing that application required agreeing upon specifications. Rangnekar reports that research was undertaken by “an informal committee involving journalists and archivists, agronomists and scientists, and bottlers and distillers.”Footnote 86 Armed with those results, “distillers, bottlers and retailers need[ed] to agree to some minimum standards related to Feni while not excluding or marginalising the rich diversity and tradition of Feni-distilling.”Footnote 87
The Feni narrative demonstrates many of the basic issues in establishing a protected GI to benefit rural farmers, workers, and families. For example, although the process for preparing the GI application was elaborate and apparently inclusive, at the end of the day most Feni distillers did not know about the application (as compared to most Feni bottlers, who consolidate supply from individual distillers).Footnote 88 The decision to use the name “Feni” but exclude coconut Feni from the GI definition means, as Rangnekar says, a “loss of history and practice [that] is not entirely easy.”Footnote 89 It also likely means consumer confusion going forward.Footnote 90
Aspects of the Feni GI definition exclude a substantial number of distillersFootnote 91 while the permissible sourcing of cashew apples from anywhereFootnote 92 may, over the long term, work to the benefit of Goan distillers and bottlers, but to the detriment of Goan farm labor. On the other hand, Feni distribution channels suggest that the benefits of the GI might accrue disproportionately to bottlers who can send Feni beyond Goa’s borders instead of individual distillers who tend to supply bars, tavernas, and restaurants.Footnote 93 Indeed, this is implicit in the idea of Feni being “launched as a global liquor” like tequila.Footnote 94 The different interests and involvement of Feni distillers and Feni bottlers also reflect educational and socioeconomic differences: less than 8 percent of distillers completed their high school education but over 85 percent of bottlers did.Footnote 95
Finally – as I have emphasized earlier in this chapter – the mere creation of the GI protection does not establish demand for the product: Rangnekar concludes that the export market is currently limited to “Goa’s diaspora” and the reputation of Feni – promulgated in tourist books on Goa – as a local “fire water” means that “the tourist will be an unreliable and unlikely ambassador for a future export market.”Footnote 96 This is a real challenge because Feni production had already been in decline prior to the GI registration – despite otherwise growing alcohol consumption in India.
The question is whether GI status can help reverse that decline over time. As one Indian observer asked in 2012, “[w]hy hasn’t the Goan feni industry been able to grow, despite it being granted the GI status?”Footnote 97 As of 2013, Feni distiller Gurudatta Bhakta concluded, “[t]he GI has not helped much in the promotion of cashew feni.”Footnote 98 One major reason appears to be other Indian regulations hampering Feni sales in India outside Goa state.Footnote 99 But the broader reason is that GI status itself only helps when there is a commitment to building the product’s reputation through improvement of product quality, consistent production (both of which may undermine traditional practices and biodiversity), and promotion. As one person central to the Goan Feni industry said, “It is now up to us as to how we take this forward.”Footnote 100
5.3 Some Observations on Papua New Guinea Coffee
In her 2012 book, From Modern Production to Imagined Primitive: The Social World of Coffee from Papua New Guinea, anthropologist Paige West has provided us with a rich account of the socioeconomics of coffee in one of Asia’s least developed regions.Footnote 101 In many ways, coffee production in the Highlands of Papua New Guinea is the opposite of Feni production in Goa. The Feni GI story happens in a comparatively rich and sophisticated polity (Goa state) in a mega-state with a sophisticated and robust legal system (India); as emblematic as Feni might be of Goa, the alcohol’s production is not a dominant element of the local economy.
In contrast, coffee production in Papua New Guinea occurs in a country with a very small population and lacking a legal and policy infrastructure on par with that of the Indian subcontinent. More importantly, unlike Feni, coffee production is the economy for the Highlands of Papua New Guinea. While extractive industries are important to Papua New Guinea exports, “coffee is the only [Papua New Guinea] export commodity owned and operated by the local people,”Footnote 102 and coffee production is the most significant source of income for most people in the Highlands of Papua New Guinea.Footnote 103 According to West, “[b]etween 86 and 89 percent of coffee grown in PNG is ‘smallholder’ coffee, grown by landowners who live in relatively rural settings with small family-owned and family-operated coffee gardens.”Footnote 104
Not surprisingly, there have been efforts to de-commodify Papua New Guinea coffee along many of the marketing metrics identified above. Single-origin Papua New Guinea coffee is definitely present in the United States market: as of 2016, Peet’s Coffee sells “New Guinea Highlands” coffee; the Coffee Bean and Tea Leaf chain offers both “organic Papua New Guinea” and “Papua New Guinea Sigri Estate” coffees; and Amazon carries Papua New Guinea coffees from at least half a dozen smaller roasters with many of these labeled as organic, fair trade, or “direct trade.”Footnote 105 It would be much more difficult to determine what amounts, if any, of organic or fair trade Papua New Guinea coffees are going into blends like Starbucks “Estima” fair trade or “Yukon” organic coffees.
From her anthropologist’s perspective, West sees these different labeling schemes as all aimed at giving Papua New Guinea coffee “a set of meanings that distinguish it from other coffees”Footnote 106 because “[c]onsumers are willing to pay more for coffee that has a particular story or a particular history.”Footnote 107 West is direct in her conclusion about how both fair trade and geographic origin marketing work: “[w]ith certified and single-origin coffees the images used to sell the products are also manipulated to make consumers feel as if they are also making other people’s lives better through the act of buying.”Footnote 108
Again, the situation with Papua New Guinea coffee reinforces some basic truths about the potential for GIs as against the spectrum of claims made by GI advocates. First, West concludes that while most Papua New Guinea coffee production comes from small individual farms, better-quality coffee comes from the larger, more industrial, less “traditional” sources of production.Footnote 109 In other words, whatever demand exists for Papua New Guinea coffee is not a function of small-batch, artisanal production. Second, any level of legal protection of the GI does not matter if the GI has no reputation with consumers – and it may be that Papua New Guinea is simply not that well known.Footnote 110 Third, even among those who know Papua New Guinea coffee, unless the coffee has a reputation for distinctiveness or excellenceFootnote 111 the GI may not carry a significant price premium – in which case emphasis on marketing through organic and fair trade channels may produce better results.Footnote 112 Not surprisingly, in 250-plus pages describing Papua New Guinea Highlands coffee production, West devotes almost no words to origin certification for Papua New Guinea coffee; at the local level, enhanced legal protection of Papua New Guinea as a GI is simply not seen as a priority to increase economic rents for Papua New Guinea coffee farmers.
6 Conclusion
GIs are a policy tool that can, in some circumstances, improve conditions in rural areas through price premiums paid for GI-labeled products. But the most important word in that sentence is “can,” not “will” or “do.” Instead of the simplistic promotion one hears from GI advocates, the United Nations Economic Commission for Africa’s 2016 study on IP policy struck the right tone:
Geographical indication protection may be extended under collective trademarks, through a special geographical indication regime, or through disciplines on unfair competition. For some local agricultural products that have niche markets and high-value customers, geographical indication protection may add value and generate economic benefits in certain regions. However, increased geographical indication protection does not itself guarantee better market access unless quality is assured by, for example, producers’ complying with importing countries’ sanitary, phytosanitary and other quality regulations. Moreover, extended geographical indication protection could restrict local production of products that infringe foreign geographical indications. Therefore, a full cost-benefit analysis must inform the design of the national geographical indication regime.Footnote 113
That conclusion for African countries applies with equal force to the rural areas of Asia, Oceania, and the Americas. Those seeking to help de-commodify foodstuffs produced in developing countries must carefully examine each situation, including looking at the comparative costs and benefits that might accrue from fair trade, organic, or other labeling schemes. In short, the promise of geographical indications may be real – but it is a limited promise, not a money-back guarantee.
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