48COMPARATIVE ANALYSE OF FOODSTUFF GEOGRAPHICAL INDICATIONS IN THE WESTERN BALKANS
Vlado Kovacevic1, Dragan Brenjo2, Slobodan Cvetkovic 3, Ljiljana Rainovic 4 Corresponding author E-mail: [email protected]
A R T I C L E I N F O Review Article Received: 16 May 2021 Accepted: 12 February 2022 doi:10.5937/ekoPolj2201163K UDC 347.722:338.439(497-15) Keywords:
Foodstuff quality schemes, Geographical indications, Protected Designation of Origin, Protected Geographical Indication, Traditional Speciality Guaranteed;
JEL: G23, Q14
A B S T R A C T
The aim of this paper is to determine the current situation in the field of geographical indications schemes (GI), obstacles for futures development and to provide recommendations for GIs development in Serbia, Bosnia and Herzegovina and Montenegro. GIs quality schemes provide confirmation to consumers that foodstuff is a traditional product produced in a certain area and with certain attributes. Although the Western Balkan countries are reach in well-known traditional products and have excellent ago-ecological conditions for GIs production, this quality schemes are not developed. In this paper are applied comparative methodology, literature review and field research. Results are showing that path to improvement GIs is in the further legal framework harmonization with EU legal framework, providing flexibility for registration of the GIs foodstuff processing capacities, support to the producer's organization, shifting of the national GIs recognition to the EU, systematic support to the GIs etc.
© 2022 EA. All rights reserved.
1 Vlado Kovacevic, PhD, Senior Research Associate, Institute of Agricultural Economics, Volgina 15 Street, 11000 Belgrade, Serbia, phone number: +381 63 55 44 14, e-mail: [email protected], ORCID ID (https://orcid.org/0000-0002-2902-6496)
2 Dragan Brenjo, PhD, Head of the Food Certification and Labeling Department, Food Safety Agency B&H, Kneza Viseslava b.b., 88000 Mostar, Bosnia and Herzegovina, phone number: +387 65 589 593, e-mail: [email protected], ORCID ID (https://orcid.org/0000-0003-3080-861X)
3 Slobodan M. Cvetkovic, PhD, Research Assistant, Ministry of Environment Protection of the Republic of Serbia, Omladinskih brigada 1, Belgrade, Serbia, phone number: +381 60 377 35 87, e-mail: [email protected], ORCID ID (https://orcid.org/0000-0003-4417-4443)
4 Ljiljana Rainovic, PhD, Senior Research Associate, Institute of Agricultural Economics, Volgina 15 Street, 11000 Belgrade, Serbia, phone number: +31 63 27 32 37, e-mail: [email protected], ORCID ID (https://orcid.org/0000-0002-8209-9088)
Introduction
Consumers demand for traditional food has increasing trend in recent years. Instead of mas produced food consumers are demanding high quality foodstuff linked to the place of origin.
GIs are defined by the most authors as certification schemes which designate foodstuff with distinctive characteristics, reputation and geographical origin (Marie-Vivien, Bienabe, 2017; Albuquerque et al., 2018; Härtel, Zhong L. 2018).
In the era of globalisation GIs emerged as tool for certification of foodstuff with special quality and place of production (Belmin et al., 2018; Grujic-Vuckovski, Kovacevic, 2020).
Main motive for this research lies in GIs importance for underdeveloped rural are. A relevant number of studies indicate significant GIs role in the rural area developments (Barjolle, 2010; Popovic et al. 2018; Arfini et al. 2019; Parausic, Roljevic-Nikolic, 2020). GIs represent opportunity for small and economically weak rural households to produce added value certified foodstuff and to improve economic position. Standardization and certification of foodstuff is contributing to development of the food supply chains (Schmitt et al., 2017; Popovic, Parausic, 2016; Berard, Marchenay, 2006).
GIs foodstuff implementation in Western Balkan legging significantly behind EU (Jankovic et al., 2018). According to Barjolle et al. 2010 one reason is low consumption of GIs products in Western Balkans countries due to the barriers such as high price and uncertainty with respect to the true GIs product characteristics. Founding significant importance of GIs Fabris & Pejovic 2012 recommended new policy in Montenegro such as orientation on traditional production as a tool for improving farmers profitability.
Importance of GIs for stakeholders is presented at the scheme 1.
Figure 1. Importance of GIs for different stakeholders
Profit SERTIFICMKIN HOUSES
Profitability
Source: Authors'
Due to the fact that all Western Balkans countries are in European Union (EU) approximation process, EU' common acquis in the area of the GIS is analysed. Traditional foodstuff are important part of European culture and heritage (Milosevic et al, 2012; Giraud et al., 2013).
In the EU three main foodstuff quality schemes are established: Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG).
Protected Designations of Origin (PDO) are names used to designate a product with special characteristics, which are also originating from a certain territory. For PDO the raw material production as well as processing should be produced in the designated geographical area (SWG, 2020).
PGI are label referring to foodstuff processed under certain production specification with distinct characteristic, but differenced from PDO as raw material is not mandated to be produced in designated territory (SWG, 2020).
TSG label refers to the traditional receipt product (EU Commission, 2021)
Other EU' quality schemes include: Mountain product and product from my farm. Mountain product referred to the high-quality product produced in mountain regions with difficult natural conditions, while Mark from my farm referee to the high-quality products produced locally for local consumption (EU Commission, 2021).
GIs foodstuff regulation in EU is based on the type of products: agricultural and foodstuffs, wines and spirits.
EU' GIs legal framework including:
• Regulation (EU) No 1151/2012 on the quality schemes for agricultural products and foodstuffs;
• Regulation (EC) No 1308/2013 on the protection of geographical indications for wine;
• Regulation (EC) No 251/2014 on the protection of geographical indications for aromatised wine;
• Regulation (EC) No 787/2019 on the protection of geographical indications for spirit drinks.
There are significant number of registered GIs products within EU (Figure 2). In total, on the 18th January 2021 there was 3753 designated products.
Figure 2. Products enrolled in the EU' Geographical indications register on the January 18th 2020
Li
1 1507
■ Wirte M rood
w spirit drinks J Aromatised wine
Source: DOOR database Structure of the EU' recognized foodstuff is presented at the Figure 3.
Figure 3. Foodstuff products enrolled in the EU' Geographical indications register by the GIs type on the January 15th 2020
Source: DOOR database
GIs in selected countries of the Western Balkans
All three selected Western Balkans countries - Serbia, BIH and Montenegro have established GIs certification schemes.
Western Balkan countries have a long-standing tradition and numerous high quality famous traditional products. The promotion of traditional foodstuff is promising vehicle for increasing regional agricultural sector competitiveness (Giraud et. al,2013; SWG, 2020).
As the structure of the agricultural sector has a great influence on the GIs, the basic indicators of agricultural production in all three countries are analysed.
Agriculture is important sector in Serbian economy, with its share in 2019 in Gross Value Added (GVA) of 11.7% and employing 19.1% of total workforce. Agricultural sector has constant positive foreign trade balance (MAFWM, 2020). Farm size in Serbia is small in average 5.4 ha (SORS, 2013). As other Western Balkan countries Serbia is reach in traditional products which can be driving force for improving livelihood in rural areas (Stojkovic et al., 2011).
Agriculture, forestry and fishery is one of the most important sectors in BIH accounting of 8% of national GDP with usage of 1.781.000 ha of utilized agricultural land. This sector employing 18% of workforce, with. BIH has limited conditions for agricultural production as 66% of the territory is considered mountainous or hilly, with small farms' land parcels (SWG, 2020). As all other Western Balkan countries BIH is reach in traditional food produced at the farms. Samardzic et al. 2013 found that BIH has significant number of GIs products and potential social and economic benefits of the GIs foodstuff production. Importance of GIs for rural development in BIH is researched and proved on Visocka ham (Ganic et al., 2019).
Agriculture contribute with 10% of the Montenegro' GDP, employing around 6% of the work force. Small farms are prevailing, with average farm size of 4.4 ha (SWG, 2020). Even 96.1% of used agricultural land are meadows and pastures (MONSTAT, 2012). There is significant number of perspective GIs products in Montenegro, dominated with small farms producing and processing large number of traditional products at the farms. FAO-EBRD, 2018 in Montenegro found 22 products with high potential for being registered as GIs. Saric et al. 2007 found significant marketing potential for GIs milk products and recommended Pljevaljski, Njeguski and Lisnati cheese and Skorup as a most promising candidate for GIs protection.
The GIs is important for agricultural development in the selected countries, largely due to the small farm sizes and fragmented land parcels. For small farms, the path to improved competitiveness cannot be sought through high yields of standard quality foodstuff that require large areas and significant investments. The way to improve the competitiveness of the Western Balkans agricultural sectors has to be found throughout production of the high quality - added value products such as GIs (SWG, 2020). Cesaro et al. 2017 and Huysmans, Swinnen 2019, indeed found evidence in the EU that in lover productivity areas are with more GIs designated.
Despite the excellent production conditions and numerous traditional products, there is none of the GIs products from this region designated in EU (Kovacevic et al., 2021)
Although there is a possibility of registering GIs products from non-EU countries, no product from the countries of Western Balkan is registered in the EU. According to analyses in this paper, registration of products in the EU would have a significant importance for regional producers due to:
• The "visibility of the GIs product" would be increased, as numerous national labels would be replaced by EU labels (Figure 1), which are unique and recognizable nationally and throughout the EU;
• The costs of product registration, as well as certification and recertification for producers would not change in relation to the costs in national GIs schemes, while the effect would be significantly increased;
• Registration in the EU after national registration would be an excellent check and significant experience for national institutions responsible for geographical indications schemes;
• Product protection at the EU level provides full worldwide product protection (Hazel, 2017).
This research contributes to the literature as a first survey on testing a legal framework and level of business environment development related to of GI protection in selected Western Balkan countries. Based on the comparative analyse gaps in implementation of GIs are recognized and recommendation for GIs schemes development are derived.
Materials and methods
Extensive literate review is conducted. Interviews with the relevant experts and stakeholders in the GIs system was performed. Method of comparative analyses was implemented.
EU Commission DOOR Database is used as a source of information on designated GIs in EU. National statistical offices and national ministries of agriculture data were used.
The paper presents two research hypotheses:
Hypothesis 1: All analysed Western Balkans countries have a harmonized legal framework governing geographical indications of quality with the EU.
Hypothesis 2: All analysed Western Balkans countries have established preconditions in terms of the general business environment for the development of a system of geographical indications. Under the general preconditions are considered: flexible conditions for registration of small traditional processing capacities, system of producer organizations, visibility (recognizability by consumers of geographical indications) and systematic long-term support measures to the GIs.
Results
Western Balkans countries are all with GIs schemes implemented.
Similar backgrounds and challenges in GIs in Former Yugoslavia's countries, making comparative analyses in foodstuff quality schemes valuable as a lesson learned tool for futures GIs development.
Hereunder, all important factors for the functioning of foodstuff GIs schemes in Serbia, BIH and Montenegro are analysed.
Table 1. Comparation analyse between Serbia, BIH and Montenegro GIs legal and
institutional framework
Element Serbia BIH Montenegro
Competent authority Ministry of Agriculture, Forestry and Water Management of the Republic of Serbia (MAFWM) and Intellectual Property Office of the Republic of Serbia (IPO) Food safety agency BIH Ministry of Agriculture and Rural Development of the Republic of Montenegro
The Rulebook on
Legal framework Law on Indications of Geographical Origin (O.G 18/2010) quality systems for food products (Official Gazette of BiH, no. 90/18) Law on quality schemes of agricultural and foodstuffs (OG 01-347/2)
Registration and controlling procedures - MAFWM as supervising authority - Accredited certification bodies - Food Safety Agency as supervising authority - Accredited - Ministry of Agriculture and Rural Development of the Republic of Montenegro - Accredited certification bodies
certification bodies
- PDO
- PDO - PGI - PDO - PGI - TSG - Higher quality mark - Mark mountain product - The mark from my farm.
GIs in place - PGI - TSG
No of GIs
products registered 46 4 7
Level of harmonization with EU* Fully harmonized Partially harmonized Fully harmonized
Producer
organisations and producers' Legal regulation not in place Legal regulation not in place Legal regulation not in place
groups
Element Serbia BIH Montenegro
Flexibility for the GIs processing capacities In place No In place
GIs products labelling Self-adhesive labels Printed on the product package Printed on the product package
Visibility of the GIs products specifications Poor Well Well
Source: Authors' survey based on the SWG, 2020
Discussions
Hereunder each GIs important development preconditions are analysed in more details, followed with recommendations.
Competent authority Serbia has two institutions involved in managing GIs scheme. IPO is receiving application and transferring to the MAFWM for opinion. It is unique procedure not in accordance with EU rules. Montenegro and BIH have single institutions in charge of GIs in accordance with EU requirements. Recommendation is for Serbia to change licensing procedure and rely on MAFWM as a sole institution in charge.
Legal framework in all three countries is regulated by the separate legal framework governing GIs.
Registration and controlling procedures are in BIH and Montenegro in compliance with EU requirements, only group of producers involved in the product production are eligible to submit GIs registration application. In Serbia any entity may apply for GIs registration (chamber of commerce, local municipalities, cooperatives, etc.). Serbian procedure is not aligned with EU where only producers of the potential GIs products may apply throughout producers' organizations. Recommendation for Serbia is to accept BIH and Montenegro practice.
GIs in place analyse shows difference among countries. While Serbia has regulated two quality marks - PDO and PGI, BIH has three - PDO, PGI and TSG, while Montenegro has applied besides PDO, PGI and TSG, optional quality marks - Higher quality mark, Mark Mountain product and The mark from my farm. It could be recommended for Serbia to include mandatory TSG mark and for Serbia and BIH to consider application of optional quality marks as Montenegro (Kovacevic et al., 2021).
Number of GIs products registered, Montenegro has seven GIs products registered, two PGI and five PDO. BIH has in total four GI products, one PDO and three PGI. Forty-six GI products are registered in Serbia of which PDO - 36, PGI -10. There is evidently small number of GIs users in Serbia, only eleven of registered products are with registered users. This is a consequence of the practice to registered GIs throughout donators support by the entities not involved in the production.
Level of harmonization with EU, Montenegro is positive example of a country which legal framework is fully harmonized with Regulation No 1151/2012. This funding corresponds with Mirecki, 2012 who found full Montenegro compliance with EU acquis. BIH has three minor subjects not aligned with Regulation No 1151/2012: 1) agricultural products are not included in quality standards; 2) non-mandatory quality marks are not included in the legal framework; 3) GIs product name has to be registered in the Latin alphabet. This founding corresponding with Samardzic et al. 2013 who found need for BIHs additional legal harmonization with EU and highlighted additional confusion caused by the GIs protection under another scheme (Lisbon agreement) and EU. Serbian legal framework is not aligned with Regulation No 1151/2012. Main incompliances are: (1) Application for GIs designation can be submitted with entities not involved in the production; (2) Two institutions are involved in the GIs registration instead of the sole MAFWM authority; (3) The format and the content of the application is not in accordance with Regulation No 1151/2012; (4) product specification is not in compliance with the Regulation No 1151/2012; (5) Summary document on product is not defined; (6) Objections procedure at the product registration is missing; (7) TSG and optional quality marks are absent. Recommendations are for Serbia and BIH to follow Montenegro example and harmonize legal framework with Regulation No 1151/2012.
Producer organisations (PO) and Producers groups (PG) are essential for GIs. According to the Regulation No 1151/2012 more than 50% of potential GIS product producers have to be involved in producer's organisation in order to apply for EU recognition. PO and PG are defined by the Regulation (EU) No 1151/2012. All three countries are obliged to adopt this regulation and to establish PO and PG. It is recommended to adopt CMO regulation in all three countries and to support PO and PG.
Flexibility for the registration of small foodstuff traditional processing capacities.
GIs foodstuff is usually processing at the farm or at the small processing capacities. For the successful functioning of GIs schemes, it is crucial to enable registration of the processing capacities according to the flexible conditions. Saric et al., 2007. found in Montenegro poor hygiene in traditional milk production and processing (processing is mainly from raw milk) as obstacle for development of the GIs foodstuff market. Same results and importance of the hygiene roles derogation for traditional products is found on the example of Hercegovina ham production (Brenjo et al., 2011). The main reasons for the need for flexible conditions in the registration and processing capacities are: (1) products are most often processed according to the traditional methods, so usually cannot be registered according to the standard hygienic requirements; (2) as a rule, those are small processing capacities that cannot bear the high costs of production and processing according to the standard requirements for processing capacities; (3) most often processing capacities are in the remote area lacking basic infrastructure for high hygiene standards. Certain deregulations for small traditional processing facilities are allowed by the EU (SWG, 2020). Serbia is the only one of the three analysed countries that has introduced derogation on plant products for small processing capacities. Montenegro has in place derogation for registration of small processing capacities for
animal products, while BIH has no flexible regulation for small processors in place. Serbia enrolled Rulebook on production and trade of small quantities of food of plant origin, area to implement said derogation, as well as exclusion, adjustment or deviation from food hygiene requirements ("Official Gazette of RS", No. 13/20 of 14 February 2020). It enabled small farms to register processing under simplified procedure. The obstacle is found in the Central Register of Facilities kept in the MAFWM, not allowing farmers as a natural person to be enrolled in the Registry. The inability to regulate administrative processing permits is a particularly major obstacle for GIs processors who, if they do not have registered processing capacity, cannot certify GIs processed products. Of interest is Montenegro experience allowing small animal product processors to register processing capacities under flexible conditions. Montenegro found solution to support small processing dairies. Framers enrolled in Traditional dairy processors registry are receiving subsidies per litre of milk. For BIH and Montenegro it is recommended to enrol regulation on flexible conditions for traditional foodstuff plant processors. For Serbia and BIH it is recommended to follow Montenegro experience and introduce subsidies per litre of milk for farmers enrolled in the traditional foodstuff milk processors registry5.
GIs products labelling is differing in Serbia compared to BIH and Montenegro. Serbia has unique labelling with self-adhesive mark printed by the National Bank of Serbia (Figure 4).
Figure 4. Self-adhesive PGI label - R. Serbia
№1
Source: Official Gazette of RS, no. 92/12 and 19/13
BIH and Montenegro have printed GIs labels at the products package. The solution with a self-adhesive label in Serbia did not prove to be optimal. First, the price of the stamp increases the production costs for GIs product. Second it is not convenient to put a stamp on some type of package. Recommendation can be given for Serbia to follow BIH and Montenegro practice and to shift to the printed GIs labels.
According to Alibabic et al., 2012 labelling of foodstuff in BIH are in line with the basic legal requirements in most cases. This research examined by of 208 consumers
5 Currently Serbia has subsidies per litter of milk only available for producers who selling milk to the dairies. By this model traditional producers processing milk by their own are destimulated and lived with no subsidies.
towards the information available at the GIs products label. Study found that label is often not visible or understandable. Consumers in 43% review the label, and 62% of consumers pay attention mainly to the shelf life, while16% pay attention to the nutritional information and 27% on the health-related issues. Similar results are found by Milosevic et al., 2012 using questionnaire for 3085 respondents where main factors sensory apple, sensory appeal, purchase price and health issues.
Visibility of the GI' products specifications are the milestone for GIs development, as it provides consumers with an insight into production practices, characteristics and specifics of GIs products. Survey included 4,828 respondents increase in consumer awareness related to GIs products is recognized as a priority activity within the EU (Verbeke et al., 2012). The EU Commission publishes the GIs Product Specifications at the DOOR website. BIH is announcing GIs products specifications at the Food Safety Agency web page, while Montenegro has a clear and visible announcement at the web-site of the Ministry of Agriculture and Rural Development of the Republic of Montenegro. Serbia has poorest GIs product specification visibility. All GIs products specifications are hard to find published at the IPO web-site. Main goal in visibility increasement of the Western Balkans countries should be directed to the EU' GIs products designation. EU regulation is allowing third countries to gain EU GIs products recognition6. With EU' designation, products packaging is marked with EU GIs which makes it more appealing and recognizable to the customers. Western Balkans foodstuff are famous worldwide and vaster emigration in the EU from the Region widen export the market for regional GIs products. Procedure for EU GIs approval is that firstly products have to be registered nationally and then national authority is forwarding application to the EU Commission. This finding is in line with the results of the SWG, 2020.
The Hypothesis 1 "All selected Western Balkan countries have a harmonized legal framework governing geographical indications of quality with the EU" is partially confirmed, as only Montenegro has a fully harmonized legal and institutional framework with the EU, while BIH' legal and institutional framework is highly aligned with the EU. Serbia has inconsistent legal framework with the EU.
The Hypothesis 2: „All selected Western Balkans countries of have established preconditions in terms of the general business environment for the development of a system of geographical indications". The Hypothesis 2 has not been confirmed because of the lack of the flexibility in registration of traditional processing capacities, not established PO and PG and lack of long-term systemic support.
Conclusions
GIs is promising quality scheme for Western Balkans agricultural sectors. Small and economical week farms' path to gaining competitiveness is in the production of added value products such as GIs. Despite the excellent production conditions, rich tradition
6 GIs products recognition is firstly requiring national legal settings to be harmonized with EU Acquis.
in traditional products there is none of the GIs products recognized in EU and GIs has no significant role in the foodstuff production in the Western Balkans countries.
Given that all three countries have a similar background and had different approaches in creating GIs systems, it is of great importance to analyse the results achieved in order to extract lessons learned and give recommendations for improving the GIs system. The following elements that crucially affect foodstuff GIs were analysed.
Competent authority should be one institution as in Montenegro and BIH, while Serbia needs to shift authority to MAFWM as a sole managing institution.
Registration and controlling procedures are in BIH and Montenegro in compliance with EU requirements, only producer's organization involved in the product production are eligible to submit application. Montenegro is positive example having legal framework fully harmonizes with Regulation No 1151/2012. BIH has three subjects not aligned with Regulation No 1151/2012, while Serbia has most inconsistencies.
Serbia has only two GIs marks PDO and PGI while BIH has all three and Montenegro has full range of the GIs marks.
BIH is in the initial stage of the registration of the GIs products. Serbia has largest number of the products, but very small number of GIs authorised users.
Producer organisations (PO) and Producers groups (PG) are essential for GIs. None of the three countries has enacted CMO regulation as a base for PO and PG establishment.
Processing of GIs takes place on the farms themselves and in small processing capacities according to traditional methods, which usually cannot be approved according to standard hygiene procedures. None of the three countries has found a satisfactory solution for registering small processing facilities. The best results and an example to the other countries can be Montenegro, which has introduced subsidies per litre of milk for processors entered in the register of small milk processors.
Referring to GIs products labelling, BIH and Montenegro have printed labels at the GIS products packaging's while Serbia has unique system of self-adhesive labels printed in National Bank proved to be inefficient in practice.
BIH and Montenegro have good visibility of the GIs producer specifications, while Serbia has to improve visibility.
Ultimate goal should be to register GIs products within the EU. In order to achieve this, first condition is to have full national legal and institutional compliance with EU. Only Montenegro has fully harmonized GIs with EU Acquis.
Scientific research of GIs as important rural development tool has to be intensified using lessons learned within the Western Balkan in order to implement most suitable GIs system.
Acknowledgements
Paper is based on the Research within the Project: SWG, Food Quality Policy: Schemes
of Geographical Indications and Traditional Specialities in South East Europe.
Conflict of interests
The authors declare no conflict of interest.
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