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Exploring the Economic Rationale for Protecting Geographical Indicators in Agriculture

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  • Bramley, Cerkia
  • Kirsten, Johann F.

Abstract

The misappropriation of the names of geographical regions such as Parma, Roquefort and Champagne is protected in the European Union by a system of Geographical Indications, and is acknowledged by the World Trade Organization as an important intellectual property right. This article addresses whether there is a case for similar protection in South Africa. The article explores the economic rationale for implementing a system of Geographical Indications by addressing issues such as information asymmetry and the role of reputation; formation of niche markets; monopoly formation, value added and rural development. The economic rationale for protecting Geographical Indications derives mainly from the fact that place of origin may be used as a quality signal, or alternatively, that the resources of the region may be captured as quality attributes. In the first instance the meaning of the geographical name is emphasized in order to reduce information asymmetries. Where place of origin is used as an attribute, resources of the region are used to increase the value of the product. This includes specific resources such as production techniques, varieties and species, but also resources that are general to the region such as landscape, environment and culture. Economic arguments present a strong justification for the introduction of geographical indications in South Africa. At the same time it will afford greater protection to indigenous resources and geographical names which could, through the collective and inclusive nature of the system, directly contribute to rural development.

Suggested Citation

  • Bramley, Cerkia & Kirsten, Johann F., 2007. "Exploring the Economic Rationale for Protecting Geographical Indicators in Agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 0(Issue 1), pages 1-25, March.
  • Handle: RePEc:ags:agreko:10128
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    File URL: http://ageconsearch.umn.edu/record/10128/files/46010069.pdf
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    References listed on IDEAS

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    1. Stiglitz, Joseph E., 1989. "Imperfect information in the product market," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 13, pages 769-847 Elsevier.
    2. Grossman, Gene M & Shapiro, Carl, 1988. "Counterfeit-Product Trade," American Economic Review, American Economic Association, vol. 78(1), pages 59-75, March.
    3. Carl Shapiro, 1982. "Consumer Information, Product Quality, and Seller Reputation," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 20-35, Spring.
    4. Trognon, Laurent & Bousset, Jean-Paul & Brannigan, Joanne & Lagrange, Louis, 1999. "Consumers attitudes towards regional food products: a comparison between five different european countries," 67th Seminar, October 28-30, 1999, LeMans, France 241120, European Association of Agricultural Economists.
    5. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 659-679.
    6. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
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    Cited by:

    1. Bienabe, Estelle & Bramley, Cerkia & Kirsten, Johann F. & Troskie, Dirk P., 2010. "Linking farmers to markets through valorisation of local resources: the case for intellectual property rights of indigenous resources," Reports 108283, University of Pretoria, Department of Agricultural Economics, Extension and Rural Development.
    2. Luisa Menapace & GianCarlo Moschini, 2012. "Quality certification by geographical indications, trademarks and firm reputation," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 39(4), pages 539-566, September.
    3. Marette, Stephan, 2009. "Can Foreign Producers Benefit from Geographical Indications under the New European Regulation?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 0(Number 1), pages 1-12.
    4. Anders, Sven M. & Caswell, Julie A., 2009. "The Benefits and Costs of Proliferation of Geographical Labeling for Developing Countries," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 0(Number 1), pages 1-17.
    5. Revoredo-Giha, Cesar & Lamprinopoulou-Kranis, Chrysa & Leat, Philip M.K. & Kupiec-Teahan, Beata & Toma, Luiza & Cacciolatti, Luca, 2009. "How differentiated is the Scottish Beef? An Analysis of Supermarket Data Panel," 113th Seminar, September 3-6, 2009, Chania, Crete, Greece 58118, European Association of Agricultural Economists.
    6. Troskie, D. P., 2013. "Adding Values as a Value Adding Technique," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 160675, African Association of Agricultural Economists (AAAE).
    7. Teuber, Ramona, 2008. "Geographical Indications and the Value of Reputation - Empirical Evidence for Cafe de Marcala," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43835, European Association of Agricultural Economists.

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    International Development;

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