Producer Perceptions, Economic Value and Incentives for Promotion of Potential Geographical Indications in Kenya

Abstract

Product differentiation can be a means to contribute to economic growth and development through increasing rural incomes and thereby enabling agricultural producers to contribute towards sustainable environmental management. Use of Geographical Indications is one such differentiation option that can benefit agricultural producers in the marketing of products whose given quality, reputation or other characteristics are exclusively or essentially attributable to its geographical origin. Geographical Indications (GI) mainly distinguishes products that differ due to characteristics and attributes inseparably linked to the geographical region of production, unlike other trademarks and standards. Kenya, as a member of the World Trade Organisation and a signatory to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, is able to benefit from GI protection and marketing, as several agricultural and forestry products have unique place-based qualities in the country. However, considering most agricultural products exist in a ready market and within consumer preferences, understanding producers’ willingness to adopt changes that would be required to enhance such protection is important. The producers’ willingness to protect the products with GI as well as their perceptions are a result of the experiences with the production, markets as well as existing value chain actors and institutions. The objective of this study was therefore to estimate producer perceptions, economic values and institutional incentives that would influence promotion of unique agricultural products as potential geographical indications in Kenya. Specifically, the objectives were to: (i) identify and characterise origin products with potential to be registered as GI in Kenya; (ii) determine producer awareness and perceptions of territorial qualities in their origin products (products vi perceived to have added value that is due to its place of origin); (iii) estimate producer economic values of the origin products as potential geographical indications; and (iv) describe policy and institutional incentives influencing evolvement and development of potential GIs in the country. Potential GI products were identified through interviews with key informants and focus group discussions. The developed criteria provided a basis to score and rank the identified products based on perceptions of their uniqueness. The four highest ranked products were then used in the study to answer the second, third and fourth objectives. Theoretically, the study is grounded on the random utility maximisation theory, the institutional theory and the theory of planned behaviour. The study on producer preferences was based on choice experiments, a non-market valuation technique. Factor analysis summarised producer perceptions for each product to determine the underlying patterns in their attitudes. The products and respective sample sizes were Baringo (Goats [n=135]), Kirinyaga (Tea [n=134]), Murang’a coffee [n=135]) and Makueni (apple mango [n=137]). The research design included qualitative, quantitative and case study approaches. Data collection involved use of literature review, key informant interviews, focus group discussions, semi-structured questionnaires to elicit producer perceptions (likert scale questions) and preferences for registering their respective products as GIs as well as other socio-economic and institutional data. SPSS, NGENE, MS Excel and NLOGIT were used in data entry and/or analysis. Generally, the respective producers are aware of the territorial-based uniqueness of their products. Reduction of producer perceptions using factor analysis produced factors that were product specific. The highest variation in the factor analysis was from institutional-related vii factors for each of the products. These were the role of private and public sector in coffee production; price information and market access in tea production; and role of policies and rules in mango production. In goat production, the role of the environment and its sustainability accounted for the highest variation. The choice experiments revealed that tea and coffee producers’ willingness to pay was KES 900 and KES 600 respectively for minimum guaranteed returns associated with GI protection. Mango producers’ willingness to pay was KES 399 for GI protection in order to access price information at the beginning of the season, while the WTP for goat producers was KES 350 to have coordinated channel of selling their products with attribution to the region. The total willingness to pay (Total WTP) for GI protection was positive for each of the four agri-food products analysed. Institutional factors and actors in the current value chains are important for success of GI protection. There are both incentives and disincentives for GI protection within the existing organisation and institutional structures. In Baringo (goats), collective action, which involves both state and community actors, is in place to regulate actions in the industry. However, producers mainly prefer to trade individually, and are hence not able to benefit from the collective action. Coffee and tea, both export products, are characterised with value chains that go beyond the national borders. Whereas this would make it easier to regulate due to the government’s efforts towards regulating these scheduled crops, the role and influence of external actors complicates the value chain process more. Therefore, the role of institutions and actors viii should attract the highest consideration and efforts, in order to successfully register agri-food products in Kenya with geographical indications. The study concludes that whereas producers are willing to pay for GI protection of agri-food products, the current policy and institutional environment serve as a disincentive to successful implementation of the concept in Kenya. The assessment highlights the importance of having an effectively enforced sui generis GI law, with the potential to enhance social inclusion, economic benefits and environmental sustainability in the production regions. This would reduce the potential problems of moral hazard and free-riding that may arise from the GI registration. The prescriptive GI law is also necessary to provide guidelines on producers who may not be willing to participate in the protection, but are still involved in production of similar product within the production region. Keywords: Characterisation; Geographical indications; institutional incentives; policy incentives; producer awareness; producer preferences; producer perceptions, origin products; territorial attributes