Tea picking on Mount Goalpara, Java. The tea carries the label “Goalpara tea“.
Photo: © J. Micaud / FAO

Geographical indication labelling pays off

Origin-linked registration increases the price of a product significantly, according to a new FAO study. This could be used as a boost for local economies and sustainable development.

Food products linked to their place of origin are economically and socially beneficial to rural areas and promote sustainable development. This is the outcome of a new study entitled Strengthening sustainable food systems through geographical indications published in April 2018 by the Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD).

Food products registered with a Geographical Indication (GI) label boast an annual trade value of over USD 50 billion worldwide, according to the study. Such products have specific characteristics, qualities or reputations stemming from their geographical origin.

Significant increases in sales prices

The researchers analysed the economic impact of Geographical Indication registration in nine
case studies: Colombian coffee, Darjeeling tea (India), Futog cabbage (Serbia), Kona coffee (United States), Manchego cheese (Spain), Penja pepper (Cameroon), Taliouine saffron (Morocco), Tête de Moine cheese (Switzerland) and Vale dos Vinhedos wine (Brazil).

They found that in all nine cases, origin-linked registration substantially increased the price of the final product, with an added value of between 20 and 50 per cent. One reason is that consumers identify unique characteristics - such as taste, colour, texture and quality - in products with Geographical Indication status, and as such they are willing to pay higher prices.

Linking products with their natural and cultural resources

The registration of products linked to their place of origin has implications running far deeper than economic gains alone. Local producers and processors at the centre of the registration process help make food systems more inclusive and more efficient.

Together, producers develop the product specifications and promote and protect the origin label. The creation of such labels also stimulates public-private sector dialogue, as public authorities are often closely associated with the registration and certification process.

Some hurdles must be considered

Registration of a Geographical Indication label follows the laws and regulations defined by each country. Internationally, the labels are regulated and protected under the TRIPs Agreement, a multilateral agreement on intellectual property rights that is recognised by all the members of the World Trade Organization.

The study recognises a number of hurdles that producers must consider before applying for an origin label. For example, some small-scale or traditional producers may be excluded if product specifications are overly industrialised, or if they are onerous in areas such as packaging.

The report also stresses that environmental impacts must be considered and specifications must include requirements to protect against overexploitation of natural resources.

(FAO/ile)

More information: FAO study Strengthening sustainable food systems through geographical indications