Open Access Research Article
PROPOSED FRAMEWORK FOR ECONOMIC DEVELOPMENT THROUGH GEOGRAPHICAL INDICATION PRODUCT
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Article Details
PROPOSED FRAMEWORK FOR ECONOMIC
DEVELOPMENT THROUGH GEOGRAPHICAL INDICATION PRODUCT
Authored By- Dr. Tapas Kumar
Bandyopadhyay & Ajoy Jose
Associate Professor, Metallurgical
and Materials Engineering
Doctoral Research Scholar, Rajiv
Gandhi School of Intellectual Property Law
Indian Institute of Technology,
Kharagpur
Abstract
Geographical Indication established a
product-place link based on reputation, quality, or another characteristic of
the good[1].
Food means processed food, partially processed or unprocessed that is
intended for human consumption[2].
India is a country with diversified culture and tradition. Food habits can be linked with culture and
tradition and the same varies from place to place. As per Geographical Indication Act, 1999, Good
includes foodstuffs[3].
Foodstuff has not been defined in the Act. Food definition can be taken from the Food
safety Standard Act 2006[4]. Considering that definition of
food, it is possible to register foodstuff under the Geographical Indication
Act 1999 in classes 5, 29, 30, and 31[5].
Further, packaging used for special food products and utensils used for the
preparation and processing of food products can be registered under GI Act. Food habits and its recipe are attached to
culture, tradition, and origin. Product
–Place linkage can be established with food recipes and their processing. Hence, it can be possible to promote foodstuff
using GI as a tool. But there are
several challenges to tagging GI with foodstuff. One of the important aspects of the promotion
of GI is branding, supply chain integrity and quality control. The challenge lies with cross-culture
migration, quality control, and food safety regulation Will
it is possible to prevent the preparation of GI tag foodstuff outside the place
of origin? Will it be to maintain the recipe
and provide tagging if the product is produced outside the place of origin?
Will it be possible to keep the quality and recipe intact? How will it be
possible to promote GI tag foodstuff along with cross-culture migration? How
the quality control can be maintained?
There is no quality control clause in GI Act. The definition suggests that a given quality,
reputation or another characteristic of goods is essentially attributable to
its geographical origin. The generic name is prohibited from
registration of GI[6].
Application of GI requires a statement of respect for reputation, specific
quality, or other characteristics and a geographical map[7].
There is a requirement for the formation of an inspection body. The
inspection structure's specifics govern how geographical indications are used
in relation to the items for which applications are made in the specific area,
region, or locale specified in the applications. But, the role of the inspection
authority is not further elaborated. Whether the Inspection body can administer the
use of that GI? If yes, how. The
process has not been defined in the act.
There is no judicial pronouncement regarding the same. Is the inspection body having any role in
quality control? In order to issues
related to quality control, migration and dilution, it is required to formulate
an appropriate framework. On the one
hand, Foodstuff should be tagged through GI, but quality control and territory are
a challenge due to cross-territory migration. There is a need for separate regulations. In
Europe, Regulation (EU) No.
1151/2012, deals with quality schemes for agricultural products and foodstuff, for
“traditional specialties guaranteed” (TSG)[8].
Do we need separate regulations for quality control or keep it open under
Consumer Protection Act? In
order to register Good under the Geographical Indication of Goods Act[9]. The uniqueness with reference to food products
may be taste, aroma, nature, shape, feel, colour, texture, raw materials or
recipe, and method of preparation that include process parameters. Further taste or aroma can be linked to raw
materials produced in that region or place such as “Darjeeling Tea” GI is
related to aroma and aroma is linked to tea leaves characteristics that are
produced in specific agro-climatic conditions on the other hand “Odisha
rasgulla is with a characteristic that includes juicy, soft to feel, and
non-chewy in consistency, and can be swallowed without teeth pressure[10]. Whereas, the “Bengal Rosogolla” is having
different texture and taste. It will be
possible to distinguish Darjeeling Tea from Nilgiri Tea because of uniqueness
is linked to the agro-climatic condition.
It may be difficult to apply a similar linkage in respect of food products
like rosogalla. Now, the question
arises, whether Odisha Rosogolla will dilute the branding of Bengal Rosogolla
or both will compete and grow. Further,
according to some researchers, the origin of rosogolla traced back to
Bangladesh[11]. Hence, the issue lies with community
migration, branding, quality control, unfair trade practices, and dilution. The
authors propose a separate framework for the promotion of GI-tagged foodstuff. The framework may consist of the followings;
1. Identification
of specific uniqueness of the product that can be linked with the place of the
origin e.g., raw material and environmental factor.
2. Selection
of Geographical Map including producers[12] and
place of origin that include historical background. The same should be chosen judiciously. It may
prevent the migration of art and skill.
3. Protect
it using various means that include certification mark, and collective mark. The
lesson can be learnt from Darjeeling Tea GI – (Annexure-A)
4. Design
an appropriate logo and registered it under Trademark. The lesson can be learnt
from Darjeeling Tea GI- (Annexure-A)
5. Create
an appropriate Governance Framework. The lesson can be learnt from Colombian
Coffee GI- (Annexure-A)
6. Develop
an appropriate supply chain management framework. The lesson can be learnt from
Colombian Coffee- (Annexure-A)
7. Accelerate
registration of authorized users from the region as indicated in the Map after
apocopate due diligence
8. Enforcement
and preventing genericide. The lesson can be learnt from Darjeeling Tea GI-
(Annexure-A).
9. Standardization
as per Food Safety Regulation/s
1.
Enhancing food GIs – Domestic and International
market
a)
Well-established identity in local as well as
global markets
b)
GI awareness among all the stakeholders
c)
Counterfeiting in the markets
d)
Socio-economic impact – also related to foreseeing
the future of the GI.
e)
A comparison can be taken among two different
classes of GI (maybe food and agriculture or food and handicrafts /
manufactured goods) on the impact of registration.
f)
Cross-regulation issues
I.
Introduction
Geographical Indication links people (producers)- product-place. The
product is having specific characteristics that may be due to agro-climatic
condition, soil condition, skill, reputation, and historical background. Geographical Indication can be used as an
important tool to protect and promote an agro-food product. It helps producers to differentiate their products from competing products in the market. It is possible to build a reputation and goodwill
around the product. The same can provide
price premium and competitive advantage to the producers.
According to a survey, geographical factors
like soils do have an impact on the flavor and quality of food. The major
purchase motivator for 37% of respondents in EU research of 20,000 consumers on
the purchase of Geographical Indication products was the guarantee of origin,
followed by expectations of quality for 35%, the specific location and
production method for 31%, and tradition for 16% of the respondents[13]. It is reflected that around 72% of
respondents are interested in quality and origin. Research indicates that quality product with
cultural linkage helps the producer to enter into more lucrative niche
markets through product differentiation[14]. It also prevents
information asymmetry. Hence GI can be
used as a strategic tool for product differential in the international market
that may lead to stimulating the rural economy and socio-economic development
of developing countries. But, the nature
and scope of GI protection vary across countries. The scope of protection for GI is still under
strong debate[15]. Wine and spirits are
protected to a greater extent under TRIPS[16]. The debate has been persisting on high-level protection for GIs for all
products[17]. The EU nations are ardent
supporters of extending the high degree of protection[18].
Developing countries are also interested to protect traditional knowledge
and skill through GI.[19] Geographical
Indication has a strong linkage with the economy. It provides consumer welfare
and producer incentive. Geographical
Indication will prevent a “free ride” over reputation and can be used as a marketing
tool for producers. It is reported that
the estimated trade value of registered GI is around USD 50 billion[20]. Let us analyze the
various economic theories that are applicable to it.
II.
Geographical Indication
and Economics
Evidence
suggests that Geographical Indication can be used for the upliftment of rural
economy. There are various theories are applicable to the economics of
Geographical Indication such as; information theory, reputation theory, and club
good theory.
·
Information theory- It is
based on market distortion and information asymmetry. Market distortion may happen due to
information asymmetry. Geographical Indication prevents information asymmetry
between producers and consumers. It
justifies the need for strict regulation to avoid asymmetry of information and
market distortion[21].
·
Reputation Theory-Shapiro’s Model is based on reputation. Reputation
is an indication of quality that provides symmetry of information. According to
Shapiro, reputation represents expected quality[22]. It indicates past behavior that can be
extrapolated to make inferences about future behavior[23].
·
Club Good Theory—Club good can be considered as
an impure public good. It is a subset of the public good. Geographical
Indication provides benefit to the community, and producers. It can be
considered club goods[24]. It is a community right as compared to a private
right.
Above economic theories justify the protection of Geographical
Indication for benefit of producers, beyond the private body. For several developing nations, the product
sold under geographical indication is a significant source of income. It is
reported that Geographical Indication as a tool may be utilized for a sustainable
food system[25]. Reputation theory and information theory
specify economic justification of protection origin linked product through
Geographical Indication. In order to keep its reputation intact, quality
control measure should be taken through supply chain integration, Case study of
Darjeeling Tea (Annexure-A) indicate the same.
III.
Geographical
Indication Awareness
Among Stakeholders
In order to protect and promote
Foodstuff as GI, it is required to build awareness among stakeholders. The awareness should include the economic
implication of GI, and supply chain integration to provide an un-changed
quality product. Under the Geographical Indication of
Goods Act of 1999, a producer or a group of people can register a geographical
indication[26]. The producers include persons who produce the
goods and may include any
person who trades or deals in such production, exploitation, making, or
manufacturing. The stakeholder involves in the value chain
of the product is producers. Awareness
among producers on reputation and quality control is an essential step in the
process of generation of Geographical Indication assets. There is a requirement for the formulation of a
proper governance structure to prevent genericide and dilution. There is a strong need for capacity building
among producers regarding awareness about their rights. Further, the apocopate
framework is required to constantly vigil, and monitor their right against
possible infringement. Infringement and
or piracy leads to dilution of reputation.
However, the challenge lies with “community migration”, and the selection
of producers.
IV.
Counterfeiting
in the markets
Counterfeiting
leads to the loss of reputation that is the backbone of Geographical Indication
and its economics. A counterfeit good is
referred to as infringed/passing off good. Counterfeiters free ride on the reputation
of Geographical Indication that provides price premium. Geographical Indication right is a community
right as compared to Trademark right which is a private right. Hence to prevent counterfeiting, there is a need
for administrative protection. The
public authority of the state plays an important role in administrative
protection. As per Article 36 of EU regulation No. 1151/2012, a member state is required to designate
competent authority to monitor the use of GI in the market[27].
Hence, there is a need to define the role, responsibility, and duty of the
Inspection Body that is required to be formed during the registration of
Geographical Indication in India, Litigation, and court-referred remedies require
higher transaction costs. This demands a
formulation of an alternative enforcement mechanism of Geographical Indication
related to IPR, and community right as it has a huge socio-economic
implication.
V.
Socio-economic
impact – is also related to foreseeing the future of the GI
It is
already referred that Geographical Indication is considered a community
right. It protects the origin-linked
product and connects people-product-place (P-P-P). This signifies that it has a
positive socio-economic impact that is reflected in various case studies. Giang Hoang et. Al.[28] has studied the relationship between
the geographical indicator and sustainable rural development in Vietnam and
came to the conclusion that GIs had a beneficial impact on the country's rural
sustainability. Further case studies
(Annexure- II) indicate a positive
impact of GI on rural economic development. A successful GI is said to be able
to provide safe, varied, and healthy diets, avoid the delocalization of
production, create jobs, and stimulate local development[29]. The
economic implication of GI on socio-economic development can be influenced by
various factors such as;
1.Market and Market Size
2.Consumer Nature
3.Price Premium
4.Value Chain
5.Supply Chain and its integrity
There
is not ample empirical study on the socio-economic impact of food staff GI in
India. Association of persons or
producers can apply for registration of GI in India. Will GI registration
increase net producer income in India? This is required to be studied. Further, Whether Indian consumers are ready
to pay a price premium and procure GI products? The same is required to be
addressed. International market survey,
registration, and regulation regarding food safety are required to be addressed
to obtain the positive benefit of food staff GI. There is a requirement for sector-specific
and or product-specific policy formulation.
Further, the regulatory aspects need to be considered. Figure-1 shows the framework that has been postulated
by authors for effective utilization of skill/reputation/traditional knowledge
using GI as one of the important tools.
VI.
Cross
Regulation Issues:
Community
migration and foodstuff-related GI regulations as well as Food safety regulations
come into the picture for efficient utilization of food staff GI for
sustainable rural development. The standard with reference to food safety,
quality, or safety needs to be addressed. There are various issues for the trading of GI-indicated
goods beyond the jurisdiction such as
· WTO
Agreements on the Application of Sanitary and Phytosanitary Standards (SPS
Agreement)
Hence,
the above issues are required to be considered for cross-country trading of GI-labelled
foodstuff. There is a requirement for
international harmonization as well as a treaty for the trading of GI-labelled
foodstuff.
ANNEXURE-1
|
Colombian
Coffee-case study
|
|
Characteristics:
– Rich taste and aroma
–
Handpicked berries
–
Soaked in cold mountain water for 24 hours
–
Carefully washed in long concrete troughs
–
Dried on great open terraces
|
|
•
Governance
•
Colombian Coffee Federation
ü
Owned and controlled by 50,000 Columbia’s
Coffee farmers
|
|
•
Supply Chain Management
•
Lays down rigorous quality control
standards
•
Certifies 100% Colombian Coffee with no
other origins blended in
|
|
Darjeeling Tea-case study
|
|
Characteristics
• Wiry tippy leaves to small tippy leaves.
• Handpicked speciality teas.
• Teas have attractive bloom and have a
round, mellow flavour.
• Cultivated only in 87 designated gardens
in the Darjeeling district
|
|
Governance
Govern by Tea Board
|
|
International
Protection
·
Canada
·
USA
·
UK
·
Japan
·
EU
Protected
word, logo; Collective mark, Certification Mark, Trademark
|
|
Supply
Chain Management
|
|
Enforcement
and Prevent Genericide
·
Notice
·
Independent Agency for enforcement and constant vigil
|
ANNEXURE-11
|
Colombian Coffee-case study
|
|
Impact
ü
Standard of living of Colombians has been improved
ü
Thousands of miles
of access roads has been built along the production area
ü
Development of
Health Centre, School, Coffee Tourism
ü
Employment opportunity
|
Figure 1: Proposed Framework for Economic
Development
[1] TRIPS Article 22 Protection of
Geographical Indications: “Geographical indications are, for the purposes of
this Agreement, indications which identify a good as originating in the
territory of a Member, or a region or locality in that territory, where a given
quality, reputation or other characteristic of the good is essentially
attributable to its geographical origin”.
[2] As per Food safety Standard Act
2006—Section 2 (j) -- “Food” means any “substance, whether processed, partially
processed or unprocessed, which is intended for human consumption and includes
primary food to the extent defined in clause (zk), genetically modified or
engineered food or food containing such ingredients, infant food, packaged
drinking water, alcoholic drink, chewing gum, and any substance, including
water used into the food during its manufacture, preparation or treatment but
does not include any animal feed, live animals unless they are prepared or
processed for placing on the market for human consumption, plants, prior to
harvesting, drugs and medicinal products, cosmetics, narcotic or psychotropic
substances”.
[3] As per Geographical Indication Act
1999, Section 2 (f) - “goods” means any “agricultural, natural or manufactured
goods or any goods of handicraft or of industry and includes food stuff”.
[4] Food Safety Standard Act 2006
[5] Class 5. “Pharmaceutical,
veterinary and sanitary preparations; dietetic substances adapted for medical
use, food for babies; plasters, materials for dressings; materials for stopping
teeth, dental wax; disinfectants; preparation for destroying vermin; fungicides,
herbicides”. Class 29. “Meat, fish, poultry and game; meat extracts; preserved,
dried and cooked fruits and vegetables; jellies, jams, fruit sauces; eggs, milk
and milk products; edible oils and fats. Class 30. Coffee, tea, cocoa, sugar,
rice, tapioca, sago, artificial coffee; flour and preparations made from
cereals, bread, pastry and confectionery, ices; honey, treacle; yeast, baking
powder; salt, mustard; vinegar, sauces, (condiments); spices; ice”. Class 31. “Agricultural,
horticultural and forestry products and grains not included in other classes;
live animals; fresh fruits and vegetables; seeds, natural plants and flowers;
foodstuffs for animals, malt”.
[6] Section 9 of The GI Act 1999, Prohibition
of registration of certain geographical indications
[7] Section 11 of The GI Act,
Application for registration.. “a statement as to how the geographical
indication serves to designate the goods as originating from the concerned
territory of the country or region or locality in the country, as the case may
be, inrespect of specific quality, reputation or other characteristics of which
are due exclusively oressentially to the geographical environment, with its
inherent natural and human factors, and theproduction, processing or
preparation of which takes place in such territory, region or locality, as the
case may be;
…….the geographical map of the territory of the
country or region or locality in the country in
which the goods orginate or are being manufactured”.
[8] Regulation (EU) No 1151/2012 of
the European Parliament and of the Council of 21 November 2012 on quality
schemes for agricultural products and foodstuffs.
[10] After Kolkata, Odisha gets GI tag
for its own variety of rasgulla | Times of India Travel (2019). Available at:
https://timesofindia.indiatimes.com/travel/destinations/after-kolkata-odisha-gets-gi-tag-for-its-own-variety
ofrasgulla/articleshow/70451535.cms (Accessed: 27 July 2022).
[11] ‘West Bengal and Odisha Battle Over the Invention of
“Rasgulla”’ (2015). Available at:
http://food.ndtv.com/food-drinks/west-bengal-and-odisha-battle-over-the-invention-of-rasgulla-1211128
(Accessed: 27 July 2022).
[12] 2(k) “producer”, in relation to
goods, means any person who,— (i) if such “goods are agricultural goods,
produces the goods and includes the person who processes or packages such
goods; (ii) if such goods are natural goods, exploits the goods; (iii) if such
goods are handicraft or industrial goods, makes or manufactures the goods, and
includes any person who trades or deals in such production, exploitation,
making or manufacturing, as the case may be, of the goods”.
[13] UNCTAD (2015) ‘Why Geographical
indications for least developed countries?’, p. 77. Available at:
https://www.tralac.org/images/docs/10483/why-geographical-indications-for-least-developed-countries-unctad-september-2016.pdf
(Accessed: 27 July 2022).
[14] Bramley, C., Biénabe, E. and Kirsten, J. (no date)
THE ECONOMICS OF GEOGRAPHICAL INDICATIONS: TOWARDS A CONCEPTUAL FRAMEWORK FOR
GEOGRAPHICAL INDICATION RESEARCH IN DEVELOPING COUNTRIES. Available at:
https://www.wipo.int/edocs/pubdocs/en/wipo_pub_1012-chapter4.pdf (Accessed: 27
July 2022).
[15] Frantz, F. (2016) ‘Twenty Years of Trips, Twenty
Years of Debate: The Extension of High Level Protection of Geographical
Indications-Arguments, State of Negotiations and Prospects’, Annual Survey of
International & Comparative Law, 21(1), pp. 93–117. Available at:
http://digitalcommons.law.ggu.edu/annlsurveyhttp://digitalcommons.law.ggu.edu/annlsurvey/vol21/iss1/7
(Accessed: 27 July 2022).
[16] Article 23 TRIPS: Additional Protection
for Geographical Indications for Wines and Spirits
[17] Frantz, F. supra note 15
[18] ibid
[19] ibid
[20] Benavente, D. (2016) ‘Chapter 1 – Introduction to
Geographical Indications: Origin and Characteristics’, in The Economics of
Geographical Indications. Graduate Institute Publications. doi:
10.4000/books.iheid.652.
[21]Policies, A. and Countries, O. (2004) ‘Agricultural
Policies in OECD Countries 2004 (Summary in Slovak)’, in. doi:
10.1787/agr_oecd-2004-sum-sk.
[22] Bramley, C., Biénabe, E. and
Kirsten, J. (no date) THE ECONOMICS OF GEOGRAPHICAL INDICATIONS: TOWARDS A
CONCEPTUAL FRAMEWORK FOR GEOGRAPHICAL INDICATION RESEARCH IN DEVELOPING
COUNTRIES. Available at:
https://www.wipo.int/edocs/pubdocs/en/wipo_pub_1012-chapter4.pdf (Accessed: 27
July 2022).
[24] ibid
[25] Vandecandelaere, E. et al. (2018) ‘Economic Impacts
of Geographical Indications: Worldwide Evidences from 9 Case Studies’, 13th
European IFSA Symposium, (July), pp. 1–17. Available at:
https://www.researchgate.net/publication/334315797_Economic_Impacts_of_Geographical_Indications_Worldwide_Evidences_from_9_Case_Studies
(Accessed: 27 July 2022).
[26] Section 11. Application for
registration.—(1) Any “association of persons or producers or any organisation
or
authority established by or under any law for the time being in force
representing the interest of the
producers
of the concerned goods, who are desirous of registering a geographical
indication in relation to
such
goods shall apply in writing to the Registrar in such form and in such manner
and accompanied by
such
fees as may be prescribed for the registration of the geographical indication”.
[27] REGULATION (EU) No 1151/2012 OF
THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 21 November 2012
[28]
Hoang, G. et al. (2020) ‘The impact of
geographical indications on sustainable rural development: A case study of the
Vietnamese Cao Phong orange’, Sustainability (Switzerland), 12(11), p. 4711.
doi: 10.3390/su12114711.
[29] Food and Agriculture Organization of the United
Nations-FAO (2019) Geographical Indications for sustainable food systems
Preserving and promoting agricultural and food heritage GI s contribution to
sustainability, FAO Directrices. Available at: www.fao.org (Accessed: 27 July
2022).
[30] Wirth, D. (2016) ‘Geographical Indications, Food
Safety, and Sustainability: Challenges and Synergies’, Bio-based and Applied
Economics, 5(2). Available at: https://lawdigitalcommons.bc.edu/lsfp/1082
(Accessed: 27 July 2022).
Article Information
PROPOSED FRAMEWORK FOR ECONOMIC DEVELOPMENT THROUGH GEOGRAPHICAL INDICATION PRODUCT
Authors: Dr.Tapas Kumar Bandyopadhyay, Ajoy Jose
- Journal IJLRA
- ISSN 2582-6433
- Published 2023/02/27
- Volume 2
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
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