Geographic Indications as a Tool to Promote Sustainability? Café de Colombia and Tequila Compared

However, maintaining the uniqueness of GI products often
requires preserving both the traditional knowledge and technical practices of a
region as well as its terroir, or physical and climatic conditions.[7]
Much of the developing world continues to rely on subsistence agriculture and
traditional methods of crop cultivation and harvesting, which do not involve
heavy chemical inputs or modern industrial agricultural techniques. Around the
world, generations of people have developed local knowledge around specific
modes of production within specific landscapes. As researchers for the UN Food
and Agriculture Organization note, “[t]oday, this link among a product, a place
and the inhabitants not only represents a heritage to be preserved, but also
has a market value in its own right, as consumers become increasingly
interested in quality linked to geographical origin, traditions and typicity.”[8]

While no direct link between GI protection and rural
development has been confirmed, many researchers suggest that properly managed
GIs, where traditional sustainable agricultural practices are valued, can be
used to promote biodiversity preservation and improve the welfare of rural
producers in emerging countries.[9]
This Article compares the management of two of the most well known GIs from
non-European countries—tequila from Mexico and coffee from Colombia—and
examines how the existence of GIs has affected the sustainability of local
economies and environments.

I. Mexican Tequila

Tequila has a rich history in Mexico and is often considered
Mexico’s national drink. The liquor is made by fermenting and distilling the
roasted heart of the agave tequilana (blue agave plant).[10]
The Mexican government established the GI for tequila in 1974, making it the
oldest legally-recognized GI outside of Europe.[11]

Agave is grown in heterogeneous regions in Mexico, with little focus on terroir. Photo credit to amantedar.

The Mexican government owns all Mexican GIs, including the
GI for tequila. The Tequila Regulatory Council (CRT, its Spanish acronym) is
the certification authority for tequila, and it manages the agave-tequila
supply chain. A private, non-profit organization, the CRT is tasked with
protecting the GI for tequila in Mexico and internationally, as well as
verifying and certifying compliance with the norm for tequila production.[12]
While the CRT is comprised of representatives from all parts of the tequila
supply chain—including agave producers, tequila distilleries, and bottlers and
distributors—the tequila companies retain a monopoly over decision making.
Agave producers, on the other hand, are disempowered because they lack
representatives on the CRT Board of Directors as well as on the other
management committees, which are staffed exclusively by tequila distillers and
bottlers/distributors.[13]

Over time, CRT management decisions have eroded the
importance of the specific terroir of the agave-producing region, which
has subsequently devalued the role of agave producers and traditional
agricultural practices.[14]
For example, the CRT enlarged the size of the GI region to incorporate regions
without a tradition of agave cultivation, and it authorized tequila bottlers to
source their tequila from anywhere across the heterogeneous region.
Furthermore, the norms governing the Tequila GI do not dictate appropriate
agricultural practices, incorporate traditional knowledge, or include measures
designed to protect the local environment.[15]

Similarly, the GI covers tequila that is not made purely
from blue agave. The GI protects two different types of tequila: “100 percent
agave,” which is made from the blue agave plant alone, and tequila mixto,
which is made from fifty-one percent blue agave alcohol and forty-nine percent
alcohol from other sugars (generally sugar cane).[16]
The higher-quality, more expensive “100 percent agave” is required by law to be
bottled within the GI region—an acknowledgement of the importance of the link
to terroir. However, that the GI also protects tequila mixto
illustrates the decreasing importance of the link between the product and the
place that characterizes the Mexican Tequila GI. Tequila mixto, which
comprises the majority of tequila exports, is often sold in bulk and bottled
outside of Mexico by transnational liquor companies.[17]
Consumers of tequila mixto cannot appreciate the unique qualities of the
agave plant grown in the GI region.

The demands of producing for an international market have
also contributed to the erosion of the terroir link. As aforementioned,
tequila companies today tend to source their agave from across an expansive and
biologically heterogeneous GI region.[18]
Compared to other GIs around the world, the GI region authorized to produce
tequila is unusually large—more than eleven million hectares.[19]
The GI region includes areas that have not historically produced agave, and
that are not particularly well suited for cultivating agave due to their soil
and climatic conditions. This includes the region of Tamaulipas (where agave
cultivation did not begin until the 1960s), which was likely added in part to
increase the size of the overall GI region and keep pace with international
demand for tequila.[20]

Figure 1: Area protected by GI for Tequila. Source: Bowen & Zapata.

In addition, many tequila companies have
consolidated in the face of international supply and demand challenges, further
diminishing the role of local producers. Because blue agave takes six to ten
years to mature after being planted, agave cultivation is typically
characterized by “boom and bust” cycles.[21]
This long maturation cycle has historically complicated supply and demand
patterns, and has resulted in a volatile tequila market.[22]
To ensure stability of agave supply after a massive shortage in 2000, much has
been done to consolidate agave production into the hands of the four largest
tequila companies.[23]
These multinational tequila companies have expanded their control within the
supply chain by creating their own plantations and growing their own agave,
making it more difficult for small, independent agave farmers to sell their
agave to distillers.[24]

At the same time, bottlers and distributors have gained more
power within the supply chain. For example, policies now allow for the
value-adding process to take place at the bottling and distribution level
rather than at the production level.[25]
And when international liquor companies “brand” tequila, they emphasize
bottlers’ names, as opposed to the region where the tequila was produced.[26]

From a sustainability perspective, the dominant role of the
tequila companies along with the weakening value of place-based production is
problematic. Because of the eroding connection between tequila and the
particular climate and production processes of agave-producing regions, tequila
is following the modern trend of commercial agriculture, which decreases the
likelihood that the GI can be used to promote sustainable farming practices
that preserve the environment.

In particular, as control over agave production has shifted
from the agave farmers to tequila companies, traditional agave cultivation
techniques have been replaced by greater mechanization and chemically intensive
production systems. The trend within the tequila industry is to value the
advice of trained technical engineers, who recommend the use of chemical herbicides
and pesticides over the expertise of experienced but uneducated agave farmers.[27]
Traditional methods of intercropping agave with corn or beans have essentially
disappeared because large tequila companies prohibit intercropping under
contract.[28]
The practice of leaving land fallow for several years between cultivation
cycles, which used to be common practice, has been replaced by planting crops
every season to maximize immediate production.[29]
These short fallow periods between cycles negatively affect soil fertility,
ultimately requiring more chemical inputs and harming both the environment as
well as the productivity of the land.[30]

Moreover, due to the concentration of power in transnational
tequila companies, independent agave farmers essentially have two options for
selling their agave: establish advance purchase contracts with the distilleries
or use an intermediary to sell their agave to the distilleries.[31]
While advance purchase contracts guarantee the agave farmer that his crop will
be purchased in full, these contracts with distilleries come with strings
attached. Specifically, farmers are obliged to produce the agave according to
the tequila companies’ specifications—typically with heavy use of chemical
pesticides fertilizers and without the traditional practices of intercropping
or leaving land fallow to improve soil fertility.[32]
Agave farmers who do not establish advance purchase contracts are left on their
own to cultivate agave, and they are often forced to sell their agave through
intermediaries, known as “coyotes,” who buy agave at very low prices and
then resell it to tequila companies.[33]
Neither of these processes values the traditional knowledge and artisanal
cultivation practices of the agave farmers.

Finally, traditional agave producers have largely been
excluded from the rapid growth and success of the tequila industry. According
to a recent study, agave producer incomes vary widely, fluctuating with the
boom and bust cycles.[34]
For farmers without advance purchase contracts, it is difficult to plan or
assure a stable income. Even for farmers with advance purchase contracts,
because there is no guaranteed minimum price (only the guarantee to buy what is
produced) farmers cannot be assured of a stable income because they cannot
predict what the price of agave will be six to ten years after it is planted.
While there have been some efforts by agave farmers to organize and
collectively demand higher prices for their produce, the large, diverse nature
of the GI region and the superior bargaining position of the major
international liquor companies has limited such efforts.[35]

In conclusion, the Tequila GI has not been successful in
promoting rural economic development or in maintaining sustainable agriculture
practices due to the consolidation of power amongst a handful of international
liquor companies. These bottlers and distributors do not value traditional
agricultural practices that emphasize specific links to terroir. Rather,
they prefer chemical-intensive industrial agriculture that can be associated
with their “brand,” as opposed to a particular region of origin.[36]
Despite the growth of the tequila industry, the management of the GI has not
allowed for socioeconomic benefits to trickle down to the local agave
producers. On the contrary, sustainable agricultural practices that were once
commonplace among agave producers are continually eroded as the large tequila
companies have gained increasing control of the tequila supply chain.[37]

II. Café de Colombia

Colombia is the world’s third largest exporter of coffee,
producing approximately twelve percent of the world market share.[38]
The Café de Colombia GI was established in 2005 as part of a strategy to
promote Colombian coffee abroad. It certifies that the coffee is grown in a
limited production area of Colombia, from Arabica beans, at an altitude of 400
to 2500 meters above sea level.[39]
Out of the more than seven million hectares of Colombia’s coffee production
areas, only 869,000 hectares are included in the GI area.[40]
This GI area is limited to the districts of the Central Coffee Belt that have
traditionally produced the highest quality coffee beans.

The Federation of Coffee Growers benefits local cafeteros in Colombia. Photo credit to Arne Bevaart.

The Café de Colombia GI is owned and managed by the
Federation of Coffee Growers (FNC, the Spanish acronym), a non-profit,
non-political cooperative that has taken the lead in branding Colombian coffee
on the international stage. The FNC was founded in 1927 by a group of Colombian
coffee growers (cafeteros), and today it is owned and managed entirely
by cafeteros.[41]
Currently representing more than 563,000 cafetero families, the FNC is
one of the largest collectives of coffee growers in the world.[42]

According to the FNC, GIs are an important instrument for
promoting product differentiation, as they protect against unfair competition
to Colombian coffee growers and marketers and provide a legally binding
guarantee of origin for consumers.[43]
It is difficult, however, to measure the success of the Café de Colombia GI in
promoting sustainability directly, since many of the FNC programs pre-dated the
GI. Nevertheless, it is evident that the FNC has managed the Café de Colombia
GI in a manner that increases consumer awareness of Colombian coffee abroad and
enables the GI product to command a higher price based on its reputation for
quality.[44]

The FNC has established the National Coffee Fund, whereby
each coffee producer contributes from two to six cents per pound of coffee
exported, which is to fund a variety of initiatives that promote producer
wellbeing.[45]
One of the most important functions of the National Coffee Fund has been to
deliver farmers a price guarantee for purchase of their beans. For instance,
the FNC guarantees cafeteros that they will buy the coffee that the
farmers produce even when the global market price is down.[46]
In those cases, the FNC stores the surplus coffee in the warehouses of its
quality control arm, Almacafé, until coffee prices rise again.[47]
This system provides a buffer against the volatility of the world coffee market
and ensures cafeteros a return on their production.[48]
While farmers are not required to sell their coffee to the FNC—and often choose
not to when world coffee prices exceed the minimum FNC offering price—the
creation of a price floor ensures protection for coffee farmers when world
coffee prices fall.

Because of the strength of the FNC and its ability to
represent virtually all of the coffee growers in the GI region, higher prices
for Colombian coffee on the world market lead to greater incomes for coffee
producers. While producer incomes fluctuate with the market, the strength of
the FNC in representing the interests of coffee growers nationally and
internationally has given producers a valuable role in the coffee supply chain.[49]

In addition, the FNC has used the National Coffee Fund to
improve the lives of rural coffee farmers by investing in infrastructure,
health, and education in rural coffee growing regions.[50]
The FNC has established more than 6000 schools, 180 hospitals, and 200 health
clinics in coffee growing areas, and has improved the availability of clean
drinking water, utilities, and basic sanitation.[51]
The FNC has also established sixty-eight “connectivity centers:” facilities
that provide Internet access to rural producers and educate them in the use of
information and communication technologies.[52]

The FNC has also developed a number of programs to promote
environmental sustainability in cafetero communities. Through the FNC’s
Biodiversity and Coffee Growing project, in collaboration with the World Bank
and the Global Environmental Fund, more than 27,000 hectares of coffee have
been certified as sustainable and environmentally friendly, more than 450
hectares have been reserved as biodiversity conservation corridors, and 11,500 cafeteros
have been trained in sustainability practices.[53]
A similar collaboration between FNC and the United Nations Development Program
has certified another 10,000 hectares as biodiversity-friendly and provided
training to more than 5000 producers in certification and verification
processes, as well as biodiversity conservation and environmental services.[54]
These projects also aim to increase grower incomes by compensating cafeteros
for environmental services and for the sale of certified products.[55]
Other projects have supported forest conservation, water conservation, soil
erosion prevention through methods like cross-sloping, and climate change
mitigation and adaptation measures, including research on
climate-change-resistant crops.[56]

In conclusion, the work of the FNC, including its promotion
of the Café de Colombia GI, has fostered rural economic development and
sustainable agriculture practices. Even though FNC funding and support—as
opposed to GI creation—is responsible for many of the environmental and
economic benefits in coffee growing regions, the FNC serves as an
organizational model of GI management, given its ability to empower local
producers and enable environmental and cultural preservation. The FNC has
promoted these objectives with GIs, adding value to exports by demanding a
strong link to terroir and recognizing the importance of traditional
knowledge of the cafeteros.

III. Comparing GI Management Strategies: Tequila vs. Café de Colombia

While both tequila and Colombian coffee have been successful
on the international market, Columbian coffee production has resulted in far
greater economic and social benefits to rural producers. This Article suggests
that these differences are attributable to GI management and marketing.

In the first place, the size of a GI region appears to have
an indirect effect on local cultivation techniques. In the case of tequila, the
Mexican government has expanded the size of the GI region to include areas
without a tradition of agave cultivation. Enlarging the GI zone in this manner
devalues traditional methods and practices of agave farmers, since farmers in
these expanded areas do not possess this traditional knowledge, nor do they
have the reputation for quality that was earned by traditional the agave
producers.[57]
Furthermore, this expansion of the GI area undermines the importance of terroir,
since the expanded production zone has a different climate, one that is not
optimal for agave production. When the specific link to terroir is
undervalued, the need to protect and maintain the agave growing region itself
is perceived as less important. As the case of the Tequila GI
demonstrates, underappreciation for the unique characteristics of the soil can
result in a lack of protection for sustainable traditional practices, thereby
giving way to industrial agricultural practices that favor increased
mechanization and heavy chemical inputs.[58]

The Café de Colombia GI has been more successful in benefiting local farmers than the Mexican Tequila GI. Photo credit to Neil Palmer (CIAT International Center for Tropical Agriculture).

Conversely, the Café de Colombia GI has limited the size of
the coffee GI region to the product’s highest quality agricultural zones,
thereby recognizing the value of traditional farmer knowledge and the
significance of terroir. Indeed, the Tequila GI region is more than 11
million hectares, whereas the Café de Colombia GI is only 800,000 hectares.
While limiting the GI zone excludes farmers outside of the region from the
potential economic benefits of GIs, over-expanding the GI zone could lead to
devaluation of the traditional cultivation techniques and the land itself, as
has happened in the tequila case.

In addition, the specifics of GI management play a major
role in determining sustainability outcomes of local GI regions. The Tequila GI
has been managed in a way that devalues traditional and sustainable agave
production techniques. While agave producers are represented by the CRT, they
do not hold decision-making power, and are thus excluded from the management of
the Tequila GI. On the other hand, the Café de Colombia GI, which is owned and
managed by the coffee growers themselves, has been able to solidify the
origin-quality link for their product.[59]
These coffee growers are more closely tied to the GI regions and therefore understand
the importance of terroir and of environmentally sustainable practices.

Different GI policies have also affected quality controls on
GI products. For example, certified Café de Colombia requires that 100 percent
of the coffee beans come from the coffee producing GI region, whereas only
fifty-one percent of tequila mixto agave is required to come from the GI
region. These overly lax regulations for blue agave liquor undermine the role
of the agave producer in supply chain management decisions since blue agave
becomes part of a generic product, as opposed to a unique origin-based good.

A comparison between these two case studies suggests that
the goals of rural economic development and sustainable agriculture are best
accomplished when the GI is managed by local producers. These producers make
management decisions in ways that value the links between terroir,
environmental conservation, and traditional farmer knowledge, because they
understand that their livelihood depends on maintaining the unique characteristics
of their product which position it in more profitable market segments. While
the tequila industry has been immensely successful at expanding into markets
abroad, it is the multinational bottlers and distributors who have reaped the
profits, not the local agave producers. This suggests that it is the collective
nature of the FNC, with its core mission of improving the wellbeing of rural cafeteros,
which makes the GI Café de Colombia a model for sustainability.

Contrasting the Tequila GI and the Café de Colombia GI
provides a useful lesson for producer communities that seek to use GIs to
promote sustainable economic development and environmental protection. Keeping
the GI region small and limiting it to areas with a history of production and a
reputation for quality encourages respect for the place-based uniqueness and
the value of terroir. Similarly, by limiting the size of the GI region,
the GI can be used to emphasize quality over quantity and focus on developing
norms and standards that promote sustainable production. This Article therefore
suggests that producer-managed GIs can be a successful tool to promote rural
economic development and environmental sustainability.

Copyright 2012 Jennifer Barnette. All rights reserved.

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