GI As a Tool for Rural Development

Introduction

A Geographical Indication is a specific type of intellectual property that is bestowed on already-established potential Trademarks with an undeniable connection to the place of origin. Products which have a GI tag are famous and are protected under the principal name of the original production region or the country. Registration of GI is a kind of guarantee of the authenticity and originality of the products and gives adequate information about the product to the consumers.

Section 2(e) of the Geographical Indications Act defines geographical indications as-

“geographical indication”, in relation to goods, means an indication which identifies such goods as agricultural goods, natural goods or manufactured goods as originating, or manufactured in the territory of a country, or a region or locality in that territory, where a given quality, reputation or other characteristic of such goods is essentially attributable to its geographical origin and in case where such goods are manufactured goods one of the activities of either the production or of processing or preparation of the goods concerned takes place in such territory, region or locality, as the case may be.’’

It establishes a connection between the product and the name of the geographical region where the products has its origin. Hence these indicators act as an effective marketing tool for attracting the attention of the consumers into the geographical region. These geographical regions mainly comprise of rural areas and geographical indications provide important opportunities for development of the rural areas.

craft village, vietnam, handicraft

GI as a Marketing Tool

In an effective process of marketing, registration of GI leads to premium pricing, owing to the differentiation of the products by the huge reputation of the products. Advertisement and reputation often helps products by decreasing search costs in order to avoid the asymmetric information problem. Advertisement is a tool which provides product information to the buyer and reputation is a guarantee of the product quality. GI,  similar  to  trademarks,  lowers  transaction  cost  of  consumers  by  giving information about products.

Furthermore, GIs are even more significant then Trademarks at establishing the unique characteristics of the product. Just like trademarks, geographical indications are assets to the producers as they give rise to competitive advantages. As an added advantage, while it is very expensive to generate a marketing cost for trademarks it is considerably easier in the case of Geographical indications. GIs are already famous for their origin and characteristics and there is no need (or at the very least, little need) of extra cost for marketing. As most Geographical indications are produced in rural areas, being either agricultural products or handicrafts, local manufacturers have added benefits associated with making use of these indicators as a marketing tool. They are particularly apt for extra-local reputation building.

GI and Rural Development

Geographical indications have a potential for profit based upon the age old traditions and the product’s quality. Producers obtain higher prices because of the reputation of such geographically indicated products than the standard products in the market. Differentiation of product in such a manner creates a demand with high willingness to bear the cost. Accordingly, GI products gives encouragement to the producers to charge a premium cost for those products because of the characteristics attributable to their respective origin.

A product after attaining GI tag creates income flows and creates opportunities for employment and development of these rural areas. The local producers do not need any technical infrastructure which is advanced in nature or any big investment in marketing. So without incurring any lump sum cost, the producers generate income and create employment opportunities.

Local producers also have an added perk of supplying their products to the final customers directly, without the interference of middlemen. With respect to agricultural products, The WIPO points out that local producers have additional advantages and gain generate more profit than other producers who sell their products to big firms to final customers. Traditional products have the characteristics of the place where they have originated from in harmony with the natural resources and the cultural methods and they are seen as being both nostalgic and interesting as a consequence. As an age old traditional group the geographical indications highlight the name of origin of the products which acts as a very efficient mechanism for attracting customers’ attention into the local identity. These factors, in turn, would give rise to tourism in such geographical regions.

Conclusion

Therefore effective grant of protection to geographical indications not only gives recognition to the place of origin but also some added benefits such as tourism, increase in economy of various sectors, which have backward and forward connections. For instance, due to the gain of recognition of the GI, it not only benefits the producers but also makes way for profits in other sectors like hotel accommodation, restaurants, gift shops etc. giving protection to geographical indications helps to improve the lives of the rural people and boost their economy. Thus GI protection not only helps in contribution to the rural sustainable economy but also gives protection to the traditional inheritance.

Author: Debarati Mukherjee, Legal Intern at PA Legal.

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