AGRICULTURAL GEOGRAPHY

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AGRICULTURAL GEOGRAPHY
Govind Seepersad (PhD)
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What is the importance of this?
Globalization
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The global market forAgricultural Products is
now governed by Regulations
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Learning Outcome

• Students should be able to
• (i) Identify issues of trade which are impacted
  by specific geographic locations.
• (ii) Explain what are geographical indications?
• (iii) Give justifications which support the
  argument for the use of geographical
  indications.
• (iv) Discuss how countries have manipulated the
  use of geographical indications to gain trade
  advantages.
• (v) Identify and justify agricultural commodities
  / products in the Region with attributes related
  to its geographical location of production.

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Globalization and the WTO

• Rules based environment that impacts on everyone
• Its no longer a particular farm or country
• Everyone must conform to the new rules in order
  to enter the global marketplace

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With Globalization, its no longer the farm in
Suriname or Trinidad
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With Globalization, its no longer the farm in
Suriname or Trinidad
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With Globalization, you have to compete with
North American farmers and procesors
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With Globalization, you have to compete with
Farmers and processors across the Globe
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Global Regulatory Trading Environment

• International trade agreements, arrangements and
  Treaties
• WTO, FTAA, EU- ACP, CARICOM, CSME, EBA, Andean
  PACT, CSME, CBI/CBERA, Caribcan, Other bilaterals
• UNCLOS, FAO Code of Conduct or Responsible
  Fishing, CITES,

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International Trade Agreements

• Prior to WTO, multilateral negotiations were done
  under the General Agreement of Tariffs and Trade
  (GATT) which was established in 1947.
• The eight round of GATT called the Uruguay Round
  (UR) (1986 April 1994) led to the establishment
  of the WTO and a number of significant agreements
  with implications for agriculture, effective
  January 1995.

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International Trade Agreements

• Major factors contributing to the launching of
  the UR include
• the need for GATT rules to be applied to two
  important sectors agriculture and textiles
• international discipline given the growth in
  this sector
• the increase in trade in counterfeit goods and
  the need to develop international rules to
  protect international property rights

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International trade agreements

• 1.2.1 The World Trade Organization
• The General Agreement on Tariffs and Trade (GATT)
  provided for the liberalization of trade in goods
  through tariffication and tariff reduction and
  the elimination of trade-distorting domestic
  support
• The WTOs Uruguay Round agreement comprised of a
  series of agreements aimed at gradual opening of
  international markets in goods, services and
  traded inventions.

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The WTO Agreement
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International Trade Agreements

• The World Trade Organization
• The WTOs Uruguay Round agreement
• Agreement on Technical Barriers to Trade (TBT)
• Agreement on the application of Sanitary and
  Phytosanitary Measures (SPS)
• Agreement on Agriculture

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(1) TBT Agreements

• The Agreement on Technical Barriers to Trade
  (TBT) that came out of the WTO agreement seeks to
  ensure that technical standards, regulations and
  conformity assessment procedures do not create
  unnecessary trade barriers.

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(1) TBT Agreements (contd)

• Countries may adopt standards they deem
  appropriate for human, animal or plant health,
  protection of the environment and consumers, but
  while the agreement encourages the use of
  international standards, it discourages policies
  that give domestic goods an unfair advantage.

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The Issues

• The European Union is currently considering
  imposing a phytosanitary ban on South African
  citrus exports.
• Citrus produced in South African can be infected
  by a disease called black spot, which damages
  the fruit and makes it unsuitable for
  consumption, but has no impact on the tree
  itself.

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The Issues

• It is argued that the chances of exports
  infecting an importing countrys orchards are
  extremely slim.
• In fact the Western Cape of South Africa is
  considered to be black spot free despite the
  fact that the fruit produced in the rest of the
  country is vulnerable to infection.

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Map of the Western Cape ProvinceSouth Africa
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The Issues

• The worlds largest citrus exporter, Spain, is
  now pushing for South African fruit exports to be
  banned from the EU because of black spot.
• But the problem is not associated with Spains
  concern about importing a potentially damaging
  fruit disease.
• Rather, it is about international competition.

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The Issues

• South African citrus exported to the European
  Union is considered to be counter-seasonal, which
  means that they do not compete with EU producers
  who produce citrus in a different time of the
  year.

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The Issues

• The tariffs for citrus exports are as a result
  lower during the South African production season
  but very high during the northern hemisphere
  season.
• In recent years there have been significant
  overlaps in the season due to overproduction
  and the planting of early and late season
  varieties of citrus.

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Related Issues

• South Africa also had to give up names like port,
  sherry, ouzo and grappa on export and local
  markets in return for money to help develop new
  names and for a quota of duty free wine.
  "ouzo", an aniseed-flavored liquor made in
  Greece
• "grappa", an Italian grape-based spirit.
• Greece and Italy had threatened not to ratify an
  EU-South Africa trade-enhancing deal unless they
  won more protection for their trademark drinks.

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Related Issues

• It is not immediately clear why the EU was so
  insistent on South Africa dropping these names
  South African produces about 39 million port and
  sherry a year, but only 3 of it is exported.
• South African production of grappa and ouzo is
  even less significant.
• While South Africas largest grappa producer
  bottles 30,000 a year, Italys largest producer
  bottles 20,000 a day.

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(1) TBT Agreements (contd)

• Geographic indications

A geographical indication of source is a sign
used in connection with goods in order to
indicate their geographical origin.
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• Geographic indications

Conceptually, two main types of geographical
indications of source may be distinguished (a)
Simple, quality-neutral geographical indications
of source (b) Qualified geographical indications
having a particular descriptive meaning
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• Geographic indications

• Simple, quality-neutral geographical indications
  of source (like made in ), where there is no
  suggestion of a direct linkage between attributes
  of the products and their geographical origin.
• The use of an indication of source on a given
  product is merely subject to the condition that
  this product originates from the place designated
  by the indication of source.

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• Geographic indications

(b) Qualified geographical indications having a
particular descriptive meaning because the
characteristics, quality or reputation of
products are essentially attributable to a
country, region or locality. These indications
consist of a name which is used to designate a
product. They are often called appellations of
origin.
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• Geographic indications

Geographical indications may also be classified
as direct and indirect. Though geographical
indications generally consist of geographical
names (direct indications), they may also be
based on non-geographical names or symbols, if
perceived by the public as identifying certain
geographical origin. These are generally called
indirect geographical indications.
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Geographic indications

• Geographical indications constitute a component
  of intellectual property if the designated
  product possesses characteristics, reputation or
  quality that are essentially attributable to its
  geographical origin.

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Geographic indications

• Simple geographical indications not possessing
  such attributes may also be protected against
  misuse, under the discipline of unfair
  competition, consumer protection or trademark
  law, but they are not one of the categories of
  intellectual property that WTO Members are bound
  to protect.

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MULTILATERAL PROTECTION OF GEOGRAPHICAL
INDICATIONS

• Three international conventions established
  before the TRIPS Agreement contain rules relating
  to geographical indications
• the Paris Convention,
• the Madrid
• Agreement and the Lisbon Agreement.

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The TRIPS Agreement

• TRIPS Agreement contains a set of international
  rules on geographical indications with an almost
  universal applicability and enforceability.
• Protection is limited to qualified geographical
  indications.

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The TRIPS Agreement

• For the purposes of the TRIPS Agreement,
  protection needs only to be granted to
• "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".

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Economics and Marketing

• We need to note
• (i) how countries have exploited the use of
  geographical indications to
• (a) protect their inventions (b) give their
  domestic goods an advantage.
• (ii) how can countries in the region employ the
  use of geographical indications for protection of
  their agricultural products as well as market
  segmentation.

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Economics and Marketing

• The Agreement on Technical Barriers to Trade
  (TBT) that came out of the WTO agreement seeks to
  ensure that technical standards, regulations and
  conformity assessment procedures do not create
  unnecessary trade barriers.

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Economics and Marketing

• The scope of protection for geographical
  indications is contained in the TRIPS Agreement.
  It states "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"

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Economics and Marketing

• Geographical indications are increasingly
  recognized as a tool for securing consumers
  loyalty by establishing the link between product
  attributes and the geographical origin.

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Economics and Marketing

• In economic terms, a geographical indication
  essentially permits or leads to increased
  producers rents based on product
  differentiation, that is, a form of monopolistic
  competition prevalent in the modern economy where
  there are elements of both monopoly and perfect
  competition.

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Economics and Marketing

• Of course, the economic value of geographical
  indications is not limited to the additional
  rents they may generate to producers.
• There are also other, less quantifiable, benefits
  such as the possibility of generating employment,
  increasing income or retaining population in
  certain regions.

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EXAMPLES OF PROTECTED GEOGRAPHICAL INDICATIONS

• Bulgaria Bulgarian yoghurt, Traminer from Khan
  Kroum (wine), Merlou from Sakar (wine)
• Canada Canadian Rye Whisky, Canadian Whisky,
  Fraser Valley, Okanagan Valley, Similkameen
  Valley, Vancouver Island
• Czech Republic Pilsen and Budweis (beers),
  various vines, liqueurs, Saaz hops, Auscha hops,
  Jablonec jewellery, Bohemia crystal, Vamberk lace

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EXAMPLES OF PROTECTED GEOGRAPHICAL INDICATIONS

• European Union
• Champagne, Sherry, Porto, Chianti, Samos, Cognac,
  Brandy de Jerez, Scotch Whisky, Irish Whiskey,
  and a range of other products, such as Newcastle
  brown ale, Scottish beef, Orkney beef, Orkney
  lamb, Jersey Royal potatoes, Cornish Clotted
  Cream,

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EXAMPLES OF PROTECTED GEOGRAPHICAL INDICATIONS

• United States
• Idaho, (potatoes and onions),
• Real California Cheese,
• Napa Valley Reserve (still and sparkling wines),
• Pride of New York (agricultural products),
• Ohio River Valley (viticulture area).

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Measuring Value Added

• Geographical indications, like trademarks and
  other forms of intellectual property rights,
  permit you to charge consumers a premium above
  marginal costs.

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Measuring Value Added

• How large such a premium could be is dependent
  on a number of factors such as market size,
  degree of competition with substitutes, consumers
  perceptions about the linkage of an indication
  with product attributes, and demand elasticity.

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Measuring Value Added

• Some geographical indications may be suitable,
  for instance, to address niche markets" (such as
  markets for organic products), though there are
  obvious limits to the size of such markets.

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Measuring Value Added

• Poulet de Bresse sells at a price four times
  the price of the standard chicken.
• The olive oil Riviera Ligure (Italy) is sold
  for 30 more than the anonymous olive oil.
• The price of "Roccaverano" cheese (from Alto
  Monferrato, Italy) is reported to have increased
  by 100 and the supply is insufficient to satisfy
  the growing demand.

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Why use GI? The growth of market

• a range of developments involving packaging and
  preservation, processing and distribution,
  production and marketing, have fundamentally
  weakened the products territorial and land-based
  associations embedded in the consumers mind.

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Why use GI? The growth of market

• The movement of products from their territory of
  origin and their production/processing in other
  locales suggests that in certain instances
  technical aspects of production/processing can
  override features of the product that are
  intrinsically linked to its area of origin.

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Why use GI? The growth of market

• Often geographical indications improve the
  marketing conditions of luxury goods for which
  consumers are prepared to pay a price
  considerably higher than for substitutes, but
  this is not always the case.

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Why use GI? The growth of market

• Hence, geographical indications, like trademarks,
  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 in itself

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Identifying Geographical Indications

• A geographical indication, unlike a trademark, is
  identified rather than created.
• The fundamental question is, in effect, the
  extent to which a certain name (or symbol) serves
  to identify a good as originating in a certain
  location.

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Identifying Geographical Indications

• Any claim for protection of a geographical
  indication critically hinges on whether it
  effectively indicates a link between certain
  goods and a location. For example
• Basmati rice (India),
• Nuoc mam (fish-based sauce from the island of
  Fu Quoc, Vietnam).

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Basmati rice (India)

• 'Basmati' means the queen of fragrance or the
  perfumed one. It attracts the highest premium
  because it has an aroma of its own - nutlike
  flavor, which enhances the flavor it is mixed
  with.

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Basmati rice (India)

• Today 'Basmati' has captured nearly 20 of the
  world-market. Of over 120,000 varieties of rice
  Pakistani Basmati' is the most sought after in
  the world.

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Basmati rice (India),

• This type of rice has been grown in the foothills
  of the Himalayas for thousands of years.
• Its perfumy, nut-like flavor and aroma can be
  attributed to the fact that the grain is aged to
  decrease its moisture content.

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Basmati rice (India),

• Basmati, a long-grained rice with a fine texture
  is the costliest rice in the world and has been
  favored by emperors and praised by poets for
  hundreds of years.

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Basmati rice (India), Geographic Locations
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So whats the issue?

• In late 1997, an American company RiceTec Inc,
  was granted a patent by the US patent office to
  call the aromatic rice grown outside India
  'Basmati'.
• RiceTec Inc, had been trying to enter the
  international Basmati market with brands like
  'Kasmati' and 'Texmati' described as Basmati-type
  rice with minimal success.
• However, with the Basmati patent rights, RiceTec
  will now be able to not only call its aromatic
  rice Basmati within the US, but also label it
  Basmati for its exports.

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This has grave repercussions for India and
Pakistan because not only will India lose out on
the 45,000 tonne US import market, which forms 10
of the total Basmati exports, but also its
position in crucial markets like the EU, the UK,
Middle East and West Asia.
Basmati rice the dispute
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In addition, the patent on Basmati is believed to
be a violation of the fundamental fact that the
long grain aromatic rice grown only in Punjab,
Haryana, and Uttar Pradesh is called Basmati.
According to sources from the Indian Newspaper,
Economic Times, "Patenting Basmati in the US is
like snatching away our history and culture
Basmati rice the dispute
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Nuoc mam (fish-based sauce from the island of
Fu Quoc, Vietnam).
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Identifying Geographical Indicationsin the Region
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Identifying Geographical Indicationsin the Region

• Possible candidates (subject to further
  examination) of geographical indications in
  CARICOM may be the following
• Stan Creek (the name of a place in Belize that
  produces pepper sauces for export to the US)
• Mayan King (also used on a product from Belize)
• Hairoun (a native Amerindian word used on a beer)
• Demerara (sugar and other products)

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Identifying Geographical Indicationsin the Region

• Possible candidates (subject to further
  examination) of geographical indications in
  CARICOM may be the following
• Blue Mountain Coffee (a Jamaican product popular
  in Japan)
• Sea Island Cotton (long fibred cotton often
  blended with other shorter fibred cottons)
• Caribbean rums (rum produced in most islands in
  the region)
• Montserrat Hills (Trinidad's high quality cocoa
  beans)
• Jamaican Patties

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Blue Mountain Coffee
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Mayan King - Belize
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Demerara - sugar
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Caribbean Rum
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Stan Creek -the name of a place in Belize that
produces pepper sauces for export
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The Economics revisited

• The use of geographical indications may allow
  Members to charge a premium price for indicated
  products, as consumers may be willing to pay more
  for products of certain origin (given perceived
  superior or particular attributes).
• Such premium would vary according to the type of
  product and market situation.

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The Economics revisited

• The protection of geographical indications may
  bring benefits but also entails costs, namely
• investments are necessary to develop and maintain
  the reputation of a geographical indication
  (quality controls, marketing, publicity, etc.)

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The Economics revisited

• The protection of geographical indications may
  bring benefits but also entails costs, namely
• the costs of acquiring and enforcing rights may
  be significant, especially in foreign countries
• the recognition of foreign geographical
  indications may lead to the closing down, in some
  cases, of local production activities.

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Other Regulations

• Declaring the contents (GMO)

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The WTO Agreement
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SPS, Health and Food safety

• Other Regulations

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The SPS Agreement

• The agreement on the application of Sanitary and
  Phytosanitary Measures (SPS) complements the TBT,
  aimed at encouraging a balance between protection
  of health and safety on the one hand and
  international trade on the other, as well as the
  use of international standards on food safety,
  animal and plant health.
• Higher standards may be applied by countries but
  only to the extent necessary to protect human,
  animal, plant life and health. They should not
  discriminate between countries with identical or
  similar conditions.

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(2) Food Security Livelihoods

• Regional Fisheries play a critical role in food
  security, livelihoods and the maintenance of
  cultural traditions in fishing communities.
• It is therefore critical to ensure the
  sustainable management of the Regions fishery
  resources

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Other Regulationsthat Impact on World
TradePreferential Trade Agreements and
ArrangementsUnilateral and Bilateral Agreements
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Preferential Trade Agreements and Arrangements

• EU / ACP economic partnership agreement with the
  EU, the Lome Convention and the Cotonou Agreement
• Caribcan trading arrangements
• CBI trading arrangements

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Preferential Trade Agreements and Arrangements

• Bilateral agreements
• CARICOM Costa Rica
• CARICOM Colombia
• CARICOM Dominican Republic
• CARICOM Cuba
• CARICOM Venezuela.