Trade in food that specifies the place of origin of the product can boost profits and also stimulate the growth of farming communities. The finding is made by a study by the Organization of the United Nations for Food and Agriculture (FAO).
“Geographical indications are a strategy of food production and marketing systems that puts social, cultural and environmental considerations at the center of the value chain,” explains economist at the FAO Investment Center Emmanuel Hidier. According to the expert, such a move can pave the way for sustainable development and for more profitable markets.
The FAO uses as an example of the use of the geographical indication the wine chain of the Vale dos Vinhedos for the penetration of the product into new markets. In 2002, 19 wineries – out of 26 located in the Valley – were granted the right to sell their beverage with an Indication of Origin (IP). At the time, companies that achieved labeling produced 1.5 million liters of wine per year – accounting for 20% of all local production.
According to the FAO, producers who bet on the geographical indication have seen a reversal in how they enter the market. They sell less quantity, but for a greater value. The UN agency report shows that the microproduction of these wineries – they account for 0.45% of all quality wine made in Brazil – is sold primarily to a high value-added niche in the domestic market.