Vorster was hosting this week’s Nation in Conversation forum at which the discussion focused on the protection of locally produced products. The panel members were Dr Mmatlou Kalaba, International Trade Economist at Pretoria University, Prof Johann Kirsten, Head of the Department of Agricultural Economics, also at Pretoria University, and Dr Dirk Troskie, Director Business Planning and Strategy at the Western Cape Department of Agriculture.
“Karoo lamb can only come from the Karoo,” adds Kalaba. “There is only one Karoo in the world.”
Kirsten explains the need to protect intellectual property that belongs to a community or a nation, that is of value to a nation, and related to a food or agricultural product that ends up in the hands of consumers with real added value. “The issue is how to protect products that are related to our culture, tradition or nation. We are trying to find a way for countries to protect what is theirs. International examples are French champagne, Scotch whisky, Italian Parmesan cheese and Parma ham. They all represent centuries of national history and tradition.”
Vorster points out that South Africa has only three registered and certified products – Karoo lamb, honeybush tea and rooibos tea.
The process started in the wine industry, Kirsten explains. The wine of origin certification is a well-known process of the past 25 years. It is only recently that other agricultural products have been included. There is no piece of legislation that could help protect them. The initiative that was taken with a group of producers of Karoo lamb, honeybush and rooibos was to put the issue on the table as specific geographical products that can be protected in the same fashion as the wine industry.
Troskie agrees that there is no institutional system in place to support the development of agricultural products other than wine. He cites the example of biltong and droëwors that he recently found on the shelves of a supermarket in Australia. It was packaged as though it was an authentic South African product, but the fine print read that it was made from pure Australian beef. It was obvious that someone was exploiting South African history, culture and tradition to make money in Australia without any benefits flowing back to the South African communities. Because there is value in the image and reputation of South African biltong, it is exploited for commercial purposes.
One of the key benefits of registering a product, Kalaba says, is that one gains competitiveness if the product has particular value and characteristics associated with its origins, heritage and culture. Such product would be recognized and known to originate from a particular region, which adds reputation and value to it. The producers are protected because all the value belongs to them, but it has to be controlled and regulated.
If you sell a product, he adds, that looks exactly the same but does not originate from that particular region or geographic area, it should not be labelled as if it were the original. The protection is around the products and commodities that come from that particular area, with their unique characteristics such as taste, look and design, to make sure that the benefits go to the rightful producers.
Vorster cites the example of French champagne. One can make a sparkling wine in the same way as champagne that looks exactly the same, but one is not entitled to call it champagne.
Kirsten mentions that the entire champagne production process, the climate, geography, soil conditions, the grape variety, restrictions on the tonnage that can be harvested from a particular vineyard, are enforced by the producer organization to ensure that the product that has been developed and made over centuries remains the same today. For the consumer there is value in reputation, image, connotation and association. The legislative environment must be in place to protect the community. It is a way for farmers to earn a premium and to extract value without letting the consumer pay more.
Registering a product is in essence a way to prevent the watering down of the commodity because it is something special that belongs to the community and has been developed over time.
This kind of protection differs from a trademark, Kirsten says. A trademark belongs to an individual or a company, whereas a geographical indication or region-based product is the intellectual property of a community. It is very difficult to protect something that belongs to everyone in a particular region. There is always the risk of free riding, misappropriation and fraudulent activities. Protection measures are very important. In Europe there are specific processes through specific legislation to help protect community values and properties. Intellectual property is born out of the reputation of production processes developed over time through the innovation of the community.
Troskie points out that the owner of a trademark has the right to change the product to suit its business strategy. In the 1990s Rooibos was trademarked in the United States by a South African company who realized the value of the Rooibos product. After a few years, the South African company sold the trademark to an international company. It meant that the name Rooibos was now owned by an American company who had the right to protect South Africans to export Rooibos to the United States. The situation has since been resolved, but not without a lot of effort, time and focus.
Kirsten says that in the retail stores one can see that Angus beef producers, for example, are trying to promote their product. It is a similar concept as the origin-based products. It is beef originating from a specific breed of animal, going through a specific production process to end up on the consumer’s plate. They face a similar protection problem to make sure that it is truly coming from the Angus breed, and not a case of suppliers exploiting the image and reputation of that breed to make some extra money. The Angus name-of-origin producers have different enforcement mechanisms such as genetic tests to make sure that the product is of the same breed. The same applies to other international beef products that are all interesting dimensions of bringing a particular style of meat on the plate that comes from a specific breed of animal.
Kirsten explains that to register and certify a product with unique characteristics, one has to identify its reputation as being true and confined to a particular region and having a powerful, beautiful story behind it. If it does not meet these criteria, there is no added value to it and little need to protect it. If it has value that belongs to a particular community and there is a danger that their intellectual property may be watered down by other people, then there is a real reason for legislative processes and registration to make sure that the community reaps the benefits. There must also be an awareness process to make sure that the consumer is aware of the reputation, true value and spirit of the product.
He mentions that negotiations between the European Union and South Africa took place recently to finalise a new free trade agreement that specifies how European products should be protected in South Africa on behalf of Europe. In exchange, the three registered South African products will be protected in Europe.
Kalaba says the benefits for the producers and entrepreneurs in and around Soweto and other townships lie in the fact that if they are selling or promoting a product of origin, they guarantee quality and that the product can be traced back to its origin. By definition it becomes a premier product. To the consumer there are also benefits and opportunities in that they have the assurance of quality and that they do not have to deal with health issues. Popular social events in the townships are the chesa nyamas, or communal braai events, that abound during summer around every corner. “If you have those products of origin you will not only be benefitting from selling them, but as proudly South African products they will benefit the nation as a whole, in addition to other benefits such as job creation,” he says.
Vorster poses the question if one can speak of a custodianship of the producers and suppliers to gain value from the unique characteristics of the product.
Establishing custodianship is difficult, Kirsten says. A community has to have some kind of organization to drive the process. For the registered South African products there are the Karoo Farmers’ Organisation and the Rooibos Tea Council and the National Honeybush Council that assume custodianship of the process, establish and implement the rules, make sure that all the legal processes are followed, and start the consumer awareness campaign. The government should set up the necessary regulations to facilitate the registration process. Amendments to the Agricultural Product Standards Act will be an important step in the process. Establishing the identity of Karoo lamb, honeybush and rooibos was relatively easy because they are indigenous to South Africa.
The panel agrees that there is immense potential in registering and marketing authentic South African products, and many opportunities for local entrepreneurs and businessmen to popularize typical South African products. Karoo lamb, honeybush and rooibos are not the only ones with special regional connotations. “What about mopane worms, pap and sauce, Amarula liqueur, West Coast snoek, Boland waterblommetjies and Western Cape olive oil?” they conclude.
End
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Note
The Nation in Conversation concept was initiated by Senwes three years ago. Following the success of a series of discussion forums at the annual Nampo Harvest Day agricultural trade exhibition, Nation in Conversation has now been extended into a thirteen-part dialogue series broadcast on Business Day Television, Soweto TV and KykNet from September to December 2015.
Francois Strydom, Managing Director of Senwes, says the discussions are focused on bringing important matters in the agricultural sector to the attention of a wider audience, creating greater cohesiveness, and ensuring a solution-driven approach towards a new dispensation in agriculture. “What happens in agriculture impacts on our nation’s well-being – our ability to access quality and affordable food.”
Nation in Conversation partners: Senwes, AFGRI, Fort Knox, Hinterland, NWK, Nedbank and Monsanto.