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How Do Different Countries use Multiple Labeling Standards

Permanent Link: http://ufdc.ufl.edu/UFE0041277/00001

Material Information

Title: How Do Different Countries use Multiple Labeling Standards Case Studies Comparing Wisconsin Real Cheese to Parmigiano-Reggiano and Indian River Citrus to Citrinos do Algarve
Physical Description: 1 online resource (57 p.)
Language: english
Creator: Patel, Payal
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2009

Subjects

Subjects / Keywords: certification, cheese, citrus, gi, pdo, pgi, protected, trademarks
Food and Resource Economics -- Dissertations, Academic -- UF
Genre: Food and Resource Economics thesis, M.S.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Protected Geographic Indicators (PGI) and Product Differentiation of Origination (PDO) are products that are linked to certain regions or countries that define them based on where they are produced, prepared and/or packaged before they are sold. However, the interpretation of what PGI/PDOs are is not synonymous around the world, leading to disputes over trade barriers between nations. The main difference in treatment of the labeling by the United States and the European Union is that the U.S. uses trademarks as a means of protecting property rights, where the EU uses PGI/PDOs to protect quality, and indirectly to support rural development and farmer incomes. PGI/PDO labeling in the EU informs consumers on product origin, which in turn describes their quality and production features. The U.S. trademark lacks the same regulations as a PGI/PDO in terms of production, processing and preparation of a product in a geographic area, not even considering the characteristics that are included in the product from that region. If the EU is able to accomplish its goal to use only PGI/PDOs, many existing product names that were protected by the trademark system could lose rights to names already used. The goal of this thesis is to identify the quality and safety control issues that go into the production of PGI/PDOs as well as trade regulations that are currently being discussed at the World Trade Organization s Doha multilateral trade agreements meetings. A comparison of how countries mark PGI/PDO products is made by comparing two case studies, cheese and citrus.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Payal Patel.
Thesis: Thesis (M.S.)--University of Florida, 2009.
Local: Adviser: House, Lisa O.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2009
System ID: UFE0041277:00001

Permanent Link: http://ufdc.ufl.edu/UFE0041277/00001

Material Information

Title: How Do Different Countries use Multiple Labeling Standards Case Studies Comparing Wisconsin Real Cheese to Parmigiano-Reggiano and Indian River Citrus to Citrinos do Algarve
Physical Description: 1 online resource (57 p.)
Language: english
Creator: Patel, Payal
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2009

Subjects

Subjects / Keywords: certification, cheese, citrus, gi, pdo, pgi, protected, trademarks
Food and Resource Economics -- Dissertations, Academic -- UF
Genre: Food and Resource Economics thesis, M.S.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Protected Geographic Indicators (PGI) and Product Differentiation of Origination (PDO) are products that are linked to certain regions or countries that define them based on where they are produced, prepared and/or packaged before they are sold. However, the interpretation of what PGI/PDOs are is not synonymous around the world, leading to disputes over trade barriers between nations. The main difference in treatment of the labeling by the United States and the European Union is that the U.S. uses trademarks as a means of protecting property rights, where the EU uses PGI/PDOs to protect quality, and indirectly to support rural development and farmer incomes. PGI/PDO labeling in the EU informs consumers on product origin, which in turn describes their quality and production features. The U.S. trademark lacks the same regulations as a PGI/PDO in terms of production, processing and preparation of a product in a geographic area, not even considering the characteristics that are included in the product from that region. If the EU is able to accomplish its goal to use only PGI/PDOs, many existing product names that were protected by the trademark system could lose rights to names already used. The goal of this thesis is to identify the quality and safety control issues that go into the production of PGI/PDOs as well as trade regulations that are currently being discussed at the World Trade Organization s Doha multilateral trade agreements meetings. A comparison of how countries mark PGI/PDO products is made by comparing two case studies, cheese and citrus.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Payal Patel.
Thesis: Thesis (M.S.)--University of Florida, 2009.
Local: Adviser: House, Lisa O.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2009
System ID: UFE0041277:00001


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1 HOW DO DIFFERENT COUNTRIES USE MULTIPLE LABELING STANDARDS: CASE STUDIES COMPARING WISCONSIN REAL CHEESE TO PARMIGIANO REGGIANO AND INDIAN RIVER CITRUS TO CITRINOS DO ALGARVE By PAYAL K PATEL A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE UNIVERSITY OF FLORIDA 2009

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2 2009 Payal K Patel

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3 T o both my m oms

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4 ACKNOWLEDGMENTS I would like to thank my parents, Kamlesh and Geeta Patel for supporting me through my mind changes and wild thoughts of how university should be. They truly have worked hard to help me through college, and for that I can never thank the m enough. I would also like ex tend my parents to include my aunt and uncle, Dr. Anil and Anjana Desai, the second set of parents who have been the calm through my many storms. I wish to thank Dr. Lisa House, my supervisory committee chair, and Dr. Thomas Spreen, my co chair, for giving me the topic idea of food labeling. Without them, I would not have been able to complete all that I have today. It is because of them and our trip abroad that the culmination of this thesis came to exist. I would also like to thank Diogo Souza Monteiro who pointed us in the right direction with the Citrinos do Algarve.

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5 TABLE OF CONTENTS page ACKNOWLEDGMENTS ................................ ................................ ................................ ...... 4 LIST OF TABLES ................................ ................................ ................................ ................ 6 LIST OF FIGURES ................................ ................................ ................................ .............. 7 ABSTRACT ................................ ................................ ................................ .......................... 8 CHAPTER 1 TRIPS AND LABELING REGULATIONS ................................ ................................ .. 10 TRIPs History and Goals ................................ ................................ ............................ 10 TRIPs in Use ................................ ................................ ................................ ............... 11 United States Certification Marks and Trademarks ................................ ................... 12 European Union PDO/PGI Labeling System ................................ ............................. 14 Disputes between the Two Labeling Systems ................................ ........................... 15 2 CASE STUDY 1: CHEESE ................................ ................................ ........................ 23 A Brief Overview of Cheese ................................ ................................ ....................... 23 Wisconsin Real Cheese ................................ ................................ ............................. 24 Parmigiano Reggiano ................................ ................................ ................................ 27 3 CASE STUDY 2: CITRUS ................................ ................................ ......................... 34 A Brief Overview of Citrus ................................ ................................ .......................... 34 Indian River Citrus ................................ ................................ ................................ ...... 35 Citrinos do Algarve ................................ ................................ ................................ ..... 39 4 DISCUSSION AND CONCLUSIONS ................................ ................................ ......... 44 Case Studies ................................ ................................ ................................ ............... 44 Negotiations in the WTO ................................ ................................ ............................ 48 APPENDIX A PARMIGIANO REGGIANO RULES AND REGULATION OF DAIRY COW FEED ................................ ................................ ................................ ........................... 51 B PARMIGIANO REGGIANO MARKING REGULATIONS ................................ .......... 53 LIST OF REFERENCES ................................ ................................ ................................ ... 54 BIOGRAPHICAL SKETCH ................................ ................................ ................................ 57

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6 LIST OF TABLES Table page 1 1 41 EU Products ................................ ................................ ................................ ...... 21 1 2 Comparison of the U.S. and EU Labeling ................................ ............................. 22

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7 LIST OF FIGURES Figure page 2 1 Wisconsin Cheese Production Varieties in 2008 ................................ .................. 32 2 2 Wisconsin Real Cheese Certification Mark ................................ ........................... 32 2 3 Parmigiano Reggiano label of cheese with a few defects ................................ .... 32 2 4 Parmigiano Reggiano label after 18 months of maturity ................................ ...... 32 2 5 Parmigiano Reggiano wax seal included after 18 months, 22 months, and 30 months of maturity ................................ ................................ ................................ .. 33 3 1 Indian River Citrus Certification Mark ................................ ................................ .... 43 3 2 Indian River Citru s District ................................ ................................ ..................... 43 3 3 Algarve Region in Portuga l ................................ ................................ .................... 43

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8 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Science HOW DO DIFFERENT COUNTRIES USE MULTIPLE LABELING STANDARDS: CASE STUDIES COMPARING WISCONSIN REAL CHEESE TO PARMIGIANO REGGIANO AND INDIAN RIVER CITRUS TO CITRINOS DO ALGARVE By Payal K Patel December 2009 Chair: Lisa House Major: Food and Resource Economics Protected Geographic Indicators (PGI) and Product Differentiation of Origination (PDO) are products that are linked to certain regions or countries that define them based on where they are produced, prepared and/or packaged before they are sold. However, the interpretation of what PGI/PDOs are is not synonymous around the world, leading to disputes over trade barriers between nations. The main difference in treatment of the labeling by the United States and the European Union is that the U.S. uses tradem arks as a means of protecting property rights, where the EU uses PGI/PDOs to protect quality, and indirectly to support rural development and farmer incomes. PGI/PDO labeling in the EU informs consumers on product origin, which in turn describes their qu ality and production features. The U.S. trademark lacks the same regulations as a PGI/PDO in terms of production, processing and preparation of a product in a geographic area, not even considering the characteristics that are included in the product from that region. If the EU is able to accomplish its goal to use only PGI/PDOs, many existing product names that were protected by the trademark system could lose rights to names already used.

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9 The goal of this thesis is to identify the quality and safety con trol issues that go into the production of PGI/PDOs as well as trade regulations that are currently being meetings. A comparison of how countries mark PGI/PDO products is made by comparing two case studies, cheese and citrus.

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10 CHAPTER 1 TRIPS AND LABELING R EGULATIONS TRIPs History and Goals Trade related aspects of intellectual property rights (TRIPs 2008) is the driving factor determining trade regulations regarding labeling for the U.S. and EU. TRIPs negotiation began in the 1986 1994 Uruguay Round negotiatio ns where a broad agreement was reached regarding trade and property rights. The goal of TRIPs s (TRIPs 2008) The three main components of the Agreement are to create minimum standards of protection, enforce intellectual property rights and settle disputes regarding trade and property rights among WTO members. Three Articles in the TRIPs Agreement pertain to Geographical Indications and its protection of which Article 22 defines GI or Geographical Indications by the following: Geographical indications are, for the purposes of the Agreement, indications which ide ntify a good as originating in the territory or a Member, or a region or locality in that territory, where a give quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin (TR IPs 2008) Article 23 discusses how wines and spirits are labeled and traded among countries. Each member shall provide the legal means for interested parties to prevent use of a geographical indication identifying wines [sprits] for wines [spirits] no t originating in the place indicated by the geographical indication in questions, even where the true origin of the goods is indicated or the geographical indication is used in translation or accompanied by (TRIPs 2008) the protection of geographical indications that existed in that Member immediately prior

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11 (TRIPs 2008) The goals of these articles are to prevent misleading use of labeling that might prevent the consumer from determining product origin as well as to reduce co mpetition regarding a misinterpretation as such (Babcock and Clemens 2004) As of November 2001 in the Doha round of trade agreements, TRIPs is undergoing many revisions, one of those including a higher level of geographic in dication and protection. TRIPs in Use To create labels under the TRIPs agreement, countries are required to have domestic laws and a method of enforcing those laws. There is no standard plan identified in TRIPs for countries to follow, instead, each natio n can create their own process to label as long as the regulations promulgated by TRIPs are followed. As a result, most countries have their own labeling procedures. The U.S. uses certification marks and trademarks to satisfy TRIPs, while the EU uses dis tinct PDO/PGI labels. Certification mark and trademark laws provide a legal means of protecting the name of a product, such as 100% Pure Kona Coffee from Hawaii or Vidalia Onions from Georgia, applying to any product, including but not limited to those pr oduced in certain regions (Babcock and Clemens 2004) The EU on the other hand, carries out its PDO/PGI laws to provide rural farmers an opportunity to sell their commodity in the market, thus increasing their income, an exa mple being Mirabelle de Lorraine, plums from the region of Lorraine, France. The result of having two different approaches has created a trade dispute over the labeling of these products. In this dispute, the U.S. holds the position that their existing system of certification mark/trademark laws protects these products. On the other side, the EU whose regulations are stricter as they take into account quality and

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12 safety controls, feels this is not adequate (Marette, Clemens and Babcock January 2007) As a concession to the current dispute, the EU has requested for TRIPs to protect 41 products (Table 1 1 ) that have product names associated with a generic name in the U.S. United States Certification Marks and Trademarks The U.S. holds the position that its certification mark and trademark laws are sufficient enough to allow mark is defined as: any word, name, symbol, device, or any combination, used or intended for u owner, to certify regional or other geographic origin, material, mode of or services, or that the work or labor on the goods or services was performed by members of a union or other organization (USPTO 2003) Therefore, certification mark laws in the U.S. protect the pr oduct based on its origin or region of production. There are cases in which a single certification mark encompasses various agricultural products that are promoted by a state department within the U.S. (Babcock and Clemens 2004) An example of this is Go Texan, a certification mark owned by the Texas Department of Agriculture, encompassing products that are produced with plants and animals from the state of Texas or products that are processed within the state. In addition to certification marks, there are trad emarks. The difference between the two is a fine line. A trademark is characterized as: any word, name, symbol, device, or any combination, used or intended for use in commerce to identify and distinguish the goods of one manufacturer or seller from good s manufacturer sold by others, and to indicate the source of goods. In short, a trademark is a brand name (USPTO 2003)

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13 Trademarks are not as common with the agricultural industry as certification marks are, but there are ot her cases with food products labeled as a trademark. A familiar trademark is the Cuties California Clementine, or commonly known as California Cuties. This is a brand name for Clementine oranges from farms in California owned by Sun Pacific producers. There is no exceptional value claimed by these oranges, just the marketing power of a catchy brand name that can draw consumers to their product (Sun Pacific 2006) Certification marks and trademarks are owned individually o r by a company. The Wisconsin Milk Marketing Board and the Indian River Citrus League own certification marks for Wisconsin Real Cheese and Indian River Fruit, respectively. The owner of the mark can disallow a producer to join up to a certain degree, ba (USPTO 2003) Producers must receive the approval of the trademark/certification mark owners before using the label designated on their product (Babcock and Clemens 2004) In the case of Wisconsin Cheddar, the Wisconsin Milk Marketing Board is the certification mark owner, and will only allow the mark to be used on cheese that is produced in the state of Wisconsin. The process of obtaining a trademark/certification mark involves applying for a label from the United States Patent and Trademark Office. When the label is approved, only the product that is obtained from a specific region can use that sign or label. As stated before, are they turned down, otherwise, they are allowed to use the certification mark. In the case of Go Texan, if a producer is in conformity with the Texas Department of policies regarding products produced or prepared in Texas, then they

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14 cannot be refused a right to use the label. In essence, it follows the example of a PDO/PGI, but the U.S. has created its own system to reduce costs and manpower because it is regulate d by the owner. Thus, the certification mark ( e.g. Go Texan) now describes the region of origin as well as the region of production and/or manufacturing. The certification mark/trademark system does conform to the TRIPs, a ruling by the me or better treatment of foreign nationals regarding intellectual (USPTO 2003) European Union PDO/PGI Labeling System In 1992, the EU created a PDO/PGI labeling program with the goal of preventing agricultural products from being imitated under the Regulation No. 2081/92 of the council of the European Commission (EC 2009) The regulation created two types o f Geographic Indications: Protection of Designations of Origin (PDO) and Protection of Geographical Indications (PGI). If c ertain production practices are taken into account and if the product is at least produced, processed and/or prepared in that regio n, it is known as a PDO. The product never leaves the area for any aspect of production or processing. PGI adds to the PDO labeling, including the same provision, but also indicating that there are other factors that make the product unique to that geogr aphic region, contributing to the quality and status of that product (Babcock and Clemens 2004) included factors such as climate, land, air, raw materials, etc. (Sanchez 2008) The PDO/PGI represents the reputation of a product which in turn determines the quality of a product (Loureiro and McCluskey 2000) For instance, a traceable name determines that a product is high quality because of the high standards that are used to create the product. If the reputation is bad, then the product is not worth buying.

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15 Therefore, those producers with good reputations should create a PDO/PGI label t o represent their quality and demand a premium on it. If the reputation of a product is bad, then there is no worth in creating a PDO/PGI label, due to the fact that no premium could be generated on the product to offset the cost associated in creating t he label. Certification marks and trademarks do not use this theory, but instead strive to create an image that is marketable which will in turn become popular and recognizable with consumers. PDO/PGIs are owned regionally, by a group of producers that together make decisions regarding their products including the basic regulations from the European Commission. As a result, Babcock and Clemens (2004) believe that this ensures the cluding to the this scenario. Parmigiano Reggiano cheese has the Consorzio del Formaggio Parmigiano Reggiano that ensures its quality and safety control. These consorti ums are the third party inspectors of the products as per Regulation 2081/92 (EC 2009) The inspection includes a verification of origin, quality, hygiene, and may even includ e taste checks (Babcock an d Clemens 2004) Disputes between the Two Labeling Systems The main difference in treatment of the labeling by the two countries is that the U.S. uses certification marks and trademarks as a means of protecting property rights, where the EU uses PDO/P GIs to protect quality, and indirectly to support rural The differences between the EU and U.S. labeling may be a result of society and culture. According to Hofstede (1980, 1983) the U.S. is an individualistic country while the countries of southern Europe (Italy, France, Spain

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16 and Portugal) are independent c ollectivist countries. People who live in an individualistic country look out for their self interest, in some cases, including their im mediate family 1983). The theory has been imbedded in American culture since the birth of the nation leading to the individualist society. As a result, it can be theorized that the result of the certification mark la beling is a result of self interest, in this case, the self interest of producers to either join or not join a board depending on individual services and profitability. On the other hand, southern European countries are a largely independent collectivist society. A collectivist society is one that is integrated fully with individuals being tied together through family and community. It is beneficial to an individual to look after the entire group as the groups best interest is the best interest for the individual. Italy, France, Spain and Portugal are found in the middle of the scale between individualistic and collectivist cultures with Spain and Portugal being more collectivist due to their Islamic influences during the eighth century. It may be due to this independent collectivist society that the PDO/PGI labeling system is so successful in the EU. Here, working in together is lucrative, and this is accomplished successfully due to the loyalty that is ingrained in the European worker or company (Con sortium). Loyalty is a major characteristic that is required to be profitable in the EU, largely as a result of the theory that being loyal requires loyalty in return. This encourages, in the case of Parmigiano Reggiano, for the dairies to continue over generations to work with a single supplier, in addition, to allow the regulatory Consortium to make decision s regarding the

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17 product. This supply chain, in theory, allows for a guarantee of income all along the chain, thus ensuring profitability and long e xistence of a company (Consortium). These society and cultural differences between the EU and U.S. theorized by Hofstede (1983) may be a part of the cause of the two very distinctive labeling systems and the reason that the two powerhouses have not yet be en able to reach an agreement on single labeling system. Thus, w hen the EU exports to the U.S., they often must create a trademark due to the fact that the certification marks (marks depicting origin of production) have been used. The trademark is only a symbol, an icon, a brand. The (O'Connor and Company 2007) It is becoming apparent that consumers within the EU are asking for more information regarding orig in of products. Thus, the system of the PDO/PGI labeling works in the EU whereas a smaller amount of consumers in the U.S. ask for the specifics of a products origin (Marette, Clemens and Babcock January 2007) A recent study suggested that European consumers tend to prefer products that are from a recognizable region (Scarpa, Philippidis and Spalatro 2005) A similar study conducted by Roosen et al. in the EU (2003) confirmed the fact that consum ers place more importance on origin that brand names or private labels. In 1999, the U.S. filed a complaint in the WTO against the EU regulations regarding the conflict between trademarks and PDO/PGIs (Marette, Clemens and Babcock January 2007) PDO/PGI labeling in the EU informs consumers on product origin, which in turn describes their quality and production features. The U.S. trademark lacks the same regulations as a PDO/PGI in terms of production, processing and

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18 preparat ion of a product in a geographic area, not even considering the characteristics that are included in the product from that region. If the EU is able to accomplish its goal to use only PDO/PGIs, many existing product names that were protected by the tradem ark system could lose rights to names already used (champagne, feta). This is particularly true in the cheese and wine sector (Marette, Clemens and Babcock January 2007) A negotiation on the subject of PDO/PGIs is ongoing an d the EU has presented protection already provided for wines and spirits to inclu (Babcock and Clemens 2004) A single U.S. certification mark o r trademark can encompass multiple agricultural products; therefore, if the U.S. were to switch to a GI system, then the producers would have to adapt to a new marketing chain that allows more differentiation among products. Trade negotiations will continue within TRIPs as more countries become involved in requesting their own systems and methods be approved forms of labeling. Countries, such as those within the EU, may have to begin accepting trademarks from other countries. Countries, such as the U.S., may have to accept PDO/PGIs that infringe on current trademarks within their country. Therefore, this thesis looks to further delve into these differences and relationships between the two forms of labeling. To do so, two d ifferent case studies were chosen: Cheese and Citrus.

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19 Cheese is a product that is consumed all over the world, especially being favored in the U.S. and the EU. Parmigiano Reggiano is a famous PDO product in the EU with tradition and strict regulations leading the way to become an exclusive label for the cheese produced in the EU. It is only fitting to do a case study on it as it is an ideal example of PDO labeling. To compare to the Parmigiano Reggiano PDO, Wisconsin Real Cheese was chosen as it produ ces many types of cheeses and is widely found within the U.S. In addition, Wisconsin Real Cheese has passed many monuments regarding cheese making within the U.S. making it a good converse to Parmigiano Reggiano. Citrus is especially favored in Florida, w here this paper originates from. Citrus fruit is most commonly defined based on the location it is produced in, thus Indian River Fruit being a well known name of citrus fruits in the U.S., mostly along the east coast of Florida The certification mark o f the Indian River Citrus succeeds due to the fact of its flavors created by the characteristics of the Indian River region which runs along the east coast of Florida. In addition, growers in the region have come together to form the Indian River Citrus L eague to market their citrus under one label to create a market for their oranges. Citrinos do Algarve is a PGI product from the southernmost coastal region of Portugal. Though they are not a great market power within the EU, the Citrinos do Algarve is a great example of a new PGI, just beginning to create a department with new rules and regulations. They have much to work on, such as coming together to share ideas regarding the increase of production output or increase in market demand of their citrus. These two cases show success in both the PDO/PGI

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20 labeling and the certification mark labeling systems, thus making them ideal for comparison.

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21 Table 1 1. 41 EU Products The 41 EU products and origins proposed as Geographical Indications to be protect ed under the TRIPs Agreement of the World Trade Organization Wines and Spirits Other Products Beaujolais Wine, France Comt Cheese, France Bordeaux Wine, France Feta Cheese, Greece Bourgogne Wine, France Fontina Cheese, Italy Chablis Wine, France Gorgonzola Cheese, Italy Champagne Wine, France Grana Padano Cheese, Italy Chianti Wine, Italy Jijona y Turrn de Alicante Nougat, Spain Cognac Wine, France Manchego Cheese, Spain Grappa di Barolo, del Piemonte, di Lombardia, del Mortadella Bologna M eat sausage, Italy Mozzarella di Bufala Campana Cheese, Italy Wine brandy, Italy) Parmigiano Reggiano Cheese, Italy Graves Wine, Italy Pecorino Romano Cheese, Italy Liebfrau(en)milch Wine, Germany Prosciutto di Parma Dry cured ham, Italy Malaga Wine, Spain Prosciutto di San Daniele Dry cured ham, Italy Marsala Wine, Italy Prosciutto Toscano Dry cured ham, Italy Madeira Wine, Portugal Queijo So Jorge Cheese, Portugal Mdoc Wine, France Reblochon Cheese, France Moselle Wine, Germany Roquefort Cheese, France Ouzo Wine, Greece Porto Wine, Portugal Rhin Wine, Germany Rioja Wine, Spain Saint Emilion Wine, France Sauternes Wine, France Jerez, Xerez Wine, Spain Source : European Commission 1994.

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22 Table 1 2 Comparison of the U.S. and EU Labeling Certification Mark Trademark PDO PGI Definition To certify regional or other geographic origin, quality, or other characteristics of goods or services To identify and distinguish the goods of one manufacturer or seller from goods manufacturer sold by others Products that are produced, processed and prepared in a certain region Products that are produced, processed, and prepared in a certain region including characterist ics that are derived from that particular region such as climate, land, air, raw materials, etc. Example Go Texans (Texas) Cuties California Clementine Bordeaux wine (France) Kentish Ale (United Kingdom)

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23 CHAPTER 2 CASE STUDY 1: CHEES E A Brief Overview of Cheese Cheese dates back more than 4,000 years; however, the exact time and original methods of production are not known. Many legends follow the first creation of cheese, but the consensus is that cheese making was brought to Europe by Asian traveler s; in fact, cheese was recorded to have been made during the Roman Empire. After the fall of the Roman Empire, cheese lost its popularity, instead becoming an art created by the monks in monasteries across Europe. It was not until the 800s AD that cheese was re introduced to history with Gorgonzola from the Po plain in Italy, and Roquefort from the Conques monastery in France. During the 1600s, when pilgrims crossed the Atlantic Ocean to the New World, cheese and the cheese making process was introduced to the U.S. created locally in the beginning with the first production plant not being created (Sanchez 2008) market with y ear round production, and over 6 00 varieties of cheeses (USDEC 2008) The U.S. consumer accounts for an average of 31.5 pounds of cheese consumed per year, of which 13 pounds are American cheeses (Cheddar, Colby, Monterey Jack and stirred curd) and 13.7 pounds are Italian cheeses (Mozzarella, Parmesan, Provolone, Ricotta, Romano and others) (US DA ERS 2008) Wisconsin Real Cheese makes more the 600 types and varieties of cheese, being one of the largest cheese producers in the U.S. accounting for approximately 25.3% of the U.S. market in 2007 (Wisconsin Milk Marketin g Board 2009)

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24 produced, followed by Cheddar, and Parmesan being grouped into the Other Italian group accounting for 13.7% of their total production (Figure 2 1). Italy produces Parmigiano Reg giano, more specifically in the provinces of Parma, Reggio Emilia, Modena, as well as parts of Mantua and Bologna. It is one of the highest turnovers of a PDO/PGI product in the EU with approximately 1.4 billion Euros in 2002 (Folk eson 2005) Parmigiano Reggiano is classified as a PDO due to the (Babcock and Clemens 2004) Since there are multiple forms of a similar type of cheese created in the area, the reputation of geographical region (the Po plains) does not contribute to its success resulting in a PDO instead of a PGI. Wisconsin Real C heese known for its cheddar cheese. The Wisconsin Milk Marketing Board owns the certification mark which allows only cheese produced, prepared and packaged within the state of W isconsin to carry the Wisconsin Real Cheese logo and name. The land in the state of Wisconsin is ideal for many agricultural crops, but it is the dairy industry that has flourished in the region. In 1872, to prevent deterioration of the quality of the ch 1921, Wisconsin became the first state in the U.S. to give a grade to its cheese for quality (Wisconsin Milk Marketing Board 2009) Today there ar e approximately 15,000 dairy farms in Wisconsin, from which 90% of this milk that is produced into cheese at 115 plants.

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25 Wisconsin Real Cheese, as stated before, is a certification mark (Figure 2 2). As a result, any cheese can have this label as long a s it is produced, prepared and packaged within the state of Wisconsin. This certification mark includes more than 50 different types of cheeses that are made in the state. Wisconsin Cheddar has the distinction of being the first graded cheese in the U.S. and now has a grade of USDA Grade AA. USDA Grade AA cheese has the highest quality, with a uniformity of flavor, texture and color among different packages. Grade A has a slight variation of flavor and cheeses are cheeses that do not have a grade but are nonetheless inspected by the USDA. This includes an inspection of the plant and equipment following USDA sanitary regulations (USDA AMS 1971) To produce Wisconsin Real Cheese, there are no regulations related to the feed for the dairy cattle. The only regulations are state ordinances for healthy and adulteration free milk as well as regulations required by the USDA to make the processing facili ty sanitary. However, Wisconsin Real Cheese does require licensed cheese makers to oversee the production of the cheese using the certification mark. Usually there are higher authorities on cheese, such as the Master cheese maker who specializes in a si ngle type of cheese produced in Wisconsin. A Master cheese maker is a Wisconsin licensed cheese maker with ten years of prior experience, as well as five years in a specialized type of cheese. Courses must be completed in a three year training program re garding cheese technology, artisanship, grading and quality assurance. In addition, four of the following five electives must be completed as well: (1) dairy chemistry, (2) business and marketing, (3) process cheese and whey utilization, (4) water and wa ste management and (5) milk pasteurization and process

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26 control. An apprenticeship is completed with cheese samples submitted regularly to ensure quality and consistency of their cheeses (Wisconsin Milk Marketing Board 2009) Master cheese makers ensure the consistency of the cheese resulting in a higher quality, separating Wisconsin Real Cheese from other cheeses in the U.S. The process to make Wisconsin Real Cheese begins with milk from cows that are raised in the state of W isconsin. The milk is pasteurized to create the uniformity of a Grade AA cheese. Calf rennet, the same enzyme added to Parmigiano Reggiano, is added to the milk to create the cheese curds. The curds are then separated from the liquid and cooked at slowe cheese being made, the curds are handled differently, sometimes including the addition of salt. The cheese is then pressed by a weight for three to 12 hours and cured in a temperature controlled room. This process varies based on the type of cheese that is made (Wisconsin Milk Marketing Board 2009) As demand for cheese increases world wise, Wisconsin Real Cheese is more than ready to meet the demand. Production practices have been created with the forecast of growth in mind, thus resulting in products that are made of quality produced efficiently. The real test will come if the which 12 are cheeses. If the regulation is passed, then Wisconsin Real Cheese may (gorgonzola, feta, fontina, and parmesan) under different names, thus, lea ding to a re learning of Wisconsin Real Cheese varieties (Wisconsin Food Products and Services Resources 2008)

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27 Parmigiano Reggiano Parmigiano increase rural development. The success of Parmig iano Reggiano is due to the fact that the manufacturers of the milk and cheese have come to an understanding regarding the specific production regulations which they are all required to follow. The beginning of Parmigiano Reggiano is traced to 900 years a go when monks near the Po River used milk to produce cheese after a long maturation (Consorzio del Formaggio Parmigiano Reggiano 2008) Today there are approximately 450 small dairies and 9,000 milk producers that follow the standards from previous centuries: no additives and slow maturation. It is said that the cheese derives its distinct flavor from the soil that surrounds the Po plain. The premier organization for the regulations regarding Parmigiano Reggiano production is the Consorzio del Formaggio Parmigiano Reggiano. Created in 1901, they have been working to ensure the quality of the milk and cheese does not dip below Designat ion of Origin, the facilitation of trade and consumption by promoting every (Consorzio del Formaggio Parmigiano Reggiano 2008) The unique fe ature referred to is the pin dot writing introduced in 1964 that identifies a cheese wheel of being a Parmigiano Reggiano PDO. Strict standards are maintained for production of Parmigiano Reggiano, including special feeding regulations for cattle and rules for marking the cheese. There are 11 regulations that must be followed for dairy cows, with all except one regarding the feed

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28 for the cows (Appendix A). For the production of the cheese, there are production standards, marking standards, and standards f or grated Parmigiano Reggiano cheeses. Milk from the dairy cows must be delivered within two hours of milking. Milk from the evening is left to settle overnight, resulting in the separation of milk from the fat. The fat is turned into butter and the s kim milk is added to the full fat cheese from the morning milking. To this mixture, calf rennet and fermented whey is added and cooked over a fire. After cooking, the cheese is ready to be cut and placed in the distinctive wheels that are seen in the mat uration rooms. The wheel is labeled with a progressive number, the production month and year, as well as the pin dot inscriptions that surround the circumference of the wheel. A few days later, the wheel is immersed in a salt solution that starts the mat uration process. There are special rooms for the maturation of the cheese; the temperature of the room must not be less than 16 o C. The wheels are set in rows on wood tables where the outside of the cheese will naturally harden. After the 12 month minimu m of maturation, a quality check is conducted on every single wheel to determine if the cheese is PDO label material or not. The inspection by a member of the Consortium includes a check for the labeling. If the wheel is not labeled correctly, the pin do cannot be classified as a PDO since it does not have the correct characteristics to follow the PDO regulation. There are eight areas of inspection that is covered when determining the quality of a single wheel of cheese: (1) age which is the year of production that must be labeled on the wheel; (2) degree of ageing by the aroma and consistency of the cheese; (3) organoleptic characteristics that create the distinct aroma

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29 and flavor of the Parmigiano Reggiano chees e; (4) internal structure of the center of the cheese, if the cheese is cut, then it splits open as is characteristic; (5) the color of the on the time of maturation; ( 6mm thick; and (8) the weight of an average of 33 to 40 kgs. As a result, there are grades of Parmigiano Reggiano. First grade is basically a perfect wheel that passes all eight inspection points. The second grade wheel has some holes, slits and splits horizontally, but does not have any aroma or flavor defects. Third grade wheels are downgraded, having many defects, or are rejected since there are too many defects leading too inferior quality. It is only after all of these inspection points are passed that the cheese can be labeled as Parmigiano Reggiano. Additionally, there are 16 regulations regarding the use of the Parmigiano Reggiano mark on the cheese (Appendix B). The mark is fire brande d onto the wheel with a label that fits the requirements of a PDO label. All extra marks are removed, such as the pin wheel dots. The Parmigiano Reggiano that is matured for a 12 months and has a few defects, second category, is known as mezzano where pa rallel lines are carved into the wheels so that consumers are able to distinguish its age (Figure 2 3). determines its maturity (Figure 2 4). There are three levels of matu (Figure 2 5 ) The red stamp h as an 18 month or more maturation with a milky flavor and an aroma of herbs, flowers, and fruits. Ideally, this cheese is served as a snack. The silver stamp, or a maturity of 22 or more months, has a fresh fruit with citrus and nuts flavor that is

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30 most often served in salads. The last s tamp is the gold stamp imprinted on the cheese wheels that has been matured over 30 months. T his cheese has very strong flavors and aromas and is said to have a higher nutritional element. Since the production of the cheese is highly labor intensive, there are higher levels of employment in the region thus indicating that the PDO does in fact prot ect small farmers and increases rural development (Roest and Menghi 2000) Dairy farmers are considered the most important part of the supply chain due the dairy cows eating the natural grass available in the Po plain. As a result of the intense need for milk, 80% of the milk is directed towards production of the cheese and a majority of the land is dedicated to dairy cattle. The raw milk is delivered twice a day to dairies located throughout the region; therefore, there is no break in production. According to Folkeson (2005) as a result of Parmigiano Reggiano becoming more commercialized, the ageing companies, or the companies that mature the cheese, are becoming similar to a monopoly in the industry. This comes about as dairies heavily rely upon the ageing companies to buy their cheese for maturity; however, the ageing companies are in a spot that allows them to buy cheese at their own time and from different dairies. This goes against the PDO/PGIs goals to keep the supply chain equally balanced. Roest and Menghi (2000) argue against this monopolistic power, and assert that in fact the PDO/PGI goals are being carried out. Since 85% of the dairies are small co operatives, there is a long term trust between the dairies and ageing companies that leads to loyalty and compet itive prices. In addition, this loyalty is a security for dairy

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31 (Roest and Menghi 2000) As a result of increased demand worldwide of Parmigiano Reggiano cheese, the regulations of dairy cows may change. Milk yields will have to increase which can only be done by increasing the amount of dairy cows in the region. To do so, feed regulation s will have to change to accommodate the ratio of the amount of forage per cow. It will in turn increase the amount of forage bought, leading to an increase in costs, which is an outcome that will have to be taken into consideration by the Consortium.

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32 Figure 2 1. Wisconsin Cheese Production Varieties in 2008 (Source: USDA) Figure 2 2. Wisconsin Real Cheese Certification Mark (Source: Wisconsin Milk Marketing Board) Figure 2 3. Parmigiano Reggiano label of cheese with a few defects (Source: Consorzio del Formaggio Parmigiano Reggiano) Figure 2 4. Parmigiano Reggiano label after 18 months of maturity (Source: Consorzio del Formaggio Parmigiano Reggiano)

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33 Figure 2 5. Parmigiano Reggiano wax seal included after 18 months, 22 months, and 30 months of maturity (Source: Consorzio del Formaggio Parmigiano Reggiano)

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34 CHAPTER 3 CASE STUDY 2: CITRU S A Brief Overview of Citrus In India, prior to 800 B.C., the Yahir Vedas described the citron and lemon. In China, mandarins w ere in reference to Emperor Yu, the god of irrigation, a god who lived before 700 B.C. Citrus has a long history in the orient, thriving in its tropical climates and providing a luxurious fruit to only those who were worthy. Confucius was the first perso n to verify two types of citrus; it took Han Yen Chih to describe 27 varieties and mandarins in his monograph of Ch Lu in 1 179 A.D. Jews began to use oranges in the Tabernacle event, thus leading to the spread of the citrus to the west. This was the fir st successful transplant of a fruit, from east to west. At this time, the west only had access to citrons or sour orange s After the Crusades, and the Turks blockade on the Mediterranean, the Portuguese began to transplant sweet citrus from India to Port ugal via the African continent. By the 1600s, citrus was a well established fruit in Europe, one hundred years after the integration of citrus to the U.S. (Scora 1975) Today, the U.S. provides approximately 30% of the world citrus, following Brazil who produces more than 50% of the worlds citrus (FAO 2006) The U.S. citrus industry is split between juice production (accounting for approximately 22% of prod uction) and fruit sent to the fresh market Florida, the number one citrus producing state in the U.S. approximately 87% of the citrus is processed into orange or grapefruit juice (FDOC 2008) The production of citrus and ci trus juices from Florida results in a $9.3 billion industry, followed by other citrus producing states of California, Arizona and Texas (FDOC 2008)

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35 The U.S. exports approximately 34 2 thousand metric tons of oranges, with a corresponding value of $271,151,000. The EU, on the other hand export s approximately 305 thousdand metric tons. It is somewhat similar to the U.S., however, most of the EUs citrus is traded within its countries (USDA FAS 2009) Within the EU, Portugal does not rank as a major citrus producer as its crops are currently sold primarily in local markets Europe is a leader in labeling regional distinctive products with a PGI label. An example of this is the Citrinos do Algar ve or citrus from the Algarve region of Portugal. It is said that the coastal region, soil and sun accounts for the unique qualities of the Citrinos do Algarve. The citrus produced here only accounts for two percent of the total Portuguese PDO/PGI fruits (Folkeson 2005) Out of this two percent of citrus, 93% of it is sold fresh to local markets and the other seven percent processed into juice. Citrinos do Algarve is a good case that demonstrates the new beginnings of a PGI label. Indian River Citrus Citrus in Florida dates back to the mid 1500s when the first citrus trees were brought from the Old World and planted in St. Augustine, along the east coast of Florida. This sandy terrain and sub tropical climate provided the citrus perfect conditions to thrive during their harvest season, beginning in October and continuing thru June (FDOC 2008) There are five production areas within Florida: Northern, Central, Western, Southern, and most notably, the Indian River District which runs along the eastern coast of Florida. Indian River Fruit is known mainly for its grapefruit; however, a substantial amount of land is used for the growing of oranges. The Indian River District is the region fa 1) on its oranges and grapefruits. The certification mark is owned by Indian River Citrus League

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36 but the League does not regulate the production of citrus. Instead, they have registered their certific ation mark with the Florida Department of Agriculture who in turn regulates the citrus including growing and shipping practices. Producers that violate the shipping and growing regulations are fined and their license to use the certification mark may be t aken away (Bournique, personal communication, 2009). Citrus in this region is traced back to 1807 when Captain Douglas Dummitt planted orange trees at his home, on the north end of Merritt Island. Due to the prosperity of his citrus trees, the popula rity of growing citrus in the region increased and by the turn of the century the region was established as Indian River Fruit, transported by boat to northern Florida and parts of southern Georgia. During the 1920s, the Indian River title was being used by citrus producers not from the region. Citrus growers in the northern part of Florida, for instance, began using the Indian River name to market their citrus to obtain the higher prices that Indian River Fruit was receiving. As a counteract, the grower s in the Indian River region joined to create an action in 1930, leading to the was created the following year. Originally, the league was comprised mainly of one man, Will Fee, the activist who went to the Federal Trade Commission in 1930. There was disorder among the growers as no laws were created to standardize Indian River Citr us and the marketing, but by 1948, the League had re organized, creating By Laws to protect growers and their citrus. Today, the league has over 1,000 growers on 150,000 acres of land of which one third is grapefruit and the remaining two thirds are orang es (Indian River Citrus League 2008)

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37 The Indian River region of Florida extends 200 miles north to south from Daytona Beach in the north to West Palm Beach in the south (Figure 3 2). This region is made up of six counties, of which only one is wholly immersed in this strip of land, comprising 21 packing houses and three processing plants. The production of citrus here is the citrus from freeze damage unlike other regions of Florida (Indian River Citrus League 2008) There are three characteristics of the district that leads to this protection: (1) proximity to Gulf Stream resulting in the region juttin g out of the Florida coast as compared to the rest of the coast, (2) cold front is buffered by rivers, swamps, and lakes from central Florida, and (3) the flat region allows for the flooding of the groves when there is a freeze reported. Flooding is a pro cess when the grower floods the groves up until the tree trunks of the trees, resulting in an increase of temperatures of the tree by two to four degrees Fahrenheit. Flat land is required for the flooding process which is abundant in this region. The la nd of the Indian River region also provides nutrients and minerals which is created and supported by the limestone soil and the salt water from the Atlantic Ocean. The soil is a mixture of sand, clay and silt which assists in the flooding process, as well as creating a natural fertilizer for the trees (Obreza and Collins 2002) Roots of the trees reach the limestone which is rich in essential nutrients and minerals, especially calcium (Indian River Cit rus League 2008) The salinity in the air due to the nearness of the Atlantic Ocean also contributes to the distinctive taste of the citrus. However, a constant discussion among growers is how to regulate of the levels of salinity in the

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38 plant as well as within the fruit, as too much salt can decrease the production yields or produce an inferior crop (Boman and Stover 2002) Citrus is harvested when it is ripe and ripeness is generally determined by the time on the tree as well as a taste test. Color is dependent upon the temperatures of the day and night. Oranges have their namesake orange tint when the days are warm, and nights are cool, as in the tropical climate of Florida. A greenish tinge remains if the days and nights are warm (FDOC 2008) Currently there is discussion on hand picking versus machine picked citrus, but traditionally citrus is picked by hand. A concern about the long term impact of mechanical harvesting on the trees has kept widespread adoption of this process from being implemented rapidly. Crews work together to hand pick the citrus put into picking bags made of canvas. These bags are emptied into field containers assigned to each crew member. When this container is filled, the citrus is then transferred to a trailer and is then moved to a packing house for labeling or a processing plant to be juiced (Schueller, et al. 1999) The Indian River Citrus label allows growers in that regio n to ask for a premium on their citrus. Fresh citrus is sold directly to the market, mostly along the eastern coast of the U.S. Oranges slated for juice, approximately 95% of the orange yield, are either sent to an Indian River processing plants or sold to individual companies for processing (Indian River Citrus League 2008) If an orange is sold to a company for juice, then they are unable to use the Indian River certification mark or to ask for a premium due to the fact th at oranges from all over the U.S. are mixed together to create one standard product. However, the orange juice that comes directly from Indian River processing plants, does obtain a price premium as the citrus is from the famous Indian River District

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39 plus the added cost of processing the orange and the Indian River certification mark that consumers look for. Before the 2004 hurricanes that hit the east coast of Florida, Indian River red seedless grapefruit was receiving a price per bushel carton of $7.20 over central the Indian River label did allow for a price premium over other Florida labels. In fact, the 2003/2004 season had a price premium of $8.24 to $7.36 of Indian River red seedless grapefruit to Florida SunRidge red seedless grapefruit respectively (Citrus Administrati ve Committee 2009). However, due to the four major hurricanes that hit the coast consecutively before harvest, most of the grapefruit groves lost its fruit to the rain, wind and flooding. It was believed that due to the size and weight of grapefruit it w as more susceptible to the hurricanes than oranges and at the end of the hurricane hurricanes (Albrigo et al. 2005). As a result of external factors such as the hurricanes, a d ecrease in publicity and a decrease in demand, Indian River red grapefruit and Florida SunRidge are currently at a level price of $10.49 per bushel carton during the 2007/2008 season (Citrus Administrative Committee 2009). Regarding grapefruit, there may be no price premium forecasts because of the unpopularity of the fruit resulting the low consumer demand of the fruit. Citrinos do Algarve Citrus was introduced to Portugal in the 1600s; however, it was not until the 1960s that production in the Algarve region flourished. Today approximately 70% of the Algarve land (Figure 3 3) is used to produce citrus: oranges, lemon and tangerines (DRAP Algarve 2009) Citrus from this region does not have a significant impact on

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40 world supply. This is mainly due to the fact that the Algarve does not have a high level of production as well as the inflated prices of the citrus from this region. Instead, the citrus is sold fresh to the domestic market and the surplus is exported to Spain and Angola, the largest importers (EuroMedCitrusNet 2007) Fresh fruit is sold directly to the markets and only seven percent of the fruit is sold to be processed into juice. Ten major production agencies make up the Algarve region; however, a de synchronization exists among them. All growers follow the EC regulations that states quality norms, the minimum characteristics of the orange as well as packaging regulations. Beyond that, productions agencies have free reign over t he fruit. Citrus in the Algarve region was considered different from the rest of Europe due to the location along the southern coast of Portugal. The area is also the point in the continental Europe that was believed to receive the most sun. The climat e here is similar to that of Florida, warm days and cool nights, thus resulting is a nicely colored orange. The land in this area is ideal in nutrients and minerals for tree growth, allowing for a sweet variety of oranges. This is what led to the initiat ion of the PGI labeling. However the Algarve region has a noticed a few problems that are hindering yeilds Water supply is the main problem. Irrigation techniques are being researched and put into place; however, the lack of communication between growers h as slowed this process of sharing information. Another major problem is the depletion of nutrients in the soil leading to erosion. With this issue, the quality of the fruit is inferior and the cost of production increases to create a better fruit (EuroMedCitrusNet 2007) A side issue is tourism in the Algarve region. This co astal area of Portugal has become very popular in the recent decade for its beaches and climate, in essence, a booming region.

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41 Development, in turn, has increased, destroying the natural balance of the coasts ecology, and in some cases, pushing out many a gricultural produces in the area (Eurostat 2004) Nevertheless, citrus growers have been attempting to increase production by use of technology and marketing. To attempt to find a solution to these problems, drip irrigation te chniques are in use along with the use of a soluble fertilizer to restore the nutrients in the soil. This particular soluble fertilizer has caught the interest of the growers, urging them to look into organic production techniques to capture a specialized market of consumers. In spite of the increase in production practices, the PGI Citrinos do Algarve is not a common request for oranges in markets other than Portugal. Moreover, it is only due to them to buy a local product since they are assured for their safety and the authenticity of the product (DRAP Algarve 2009) In reality, only major growers are certified with PGI labeling due to cos ts, the rest instead choosing to follow only the basic EC regulations and not using the Citrinos do Algarve label. This leads to a decrease market power for the producers using the PGI label, in turn increasing their costs of production In order to bec ome a household name, the Direccao regional de Agricultural e Pescas do Algarve (regional Agriculture and Fisheries of the Algarve) has suggested that the growers need to combine their production agencies and use that power to create recognition for the na must communicate with each other to increase the use of technology to boost production levels to supply a bigger market and only together can they create an

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42 effective marketing strategy that is bene ficial to all growers in the region. The current divide among the growers has separated the origin of the fruit to different producers making the citrus uncompetitive in the market place.

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43 Figure 3 1 Indian River Citrus Certification Mark (Source: I ndian River Citrus League) Figure 3 2 Indian River Citrus District (Source: Gold Harvest Fruit Sales, Inc.) Figure 3 3. Algarve Region in Portugal (Source: Lonely Planet)

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44 CHAPTER 5 DISCUSSION AND CONCLUSIONS Case Studies As we see from the two case studies, there is a vast difference in production practices that lead to labels and label information. With cheese, the Parmigiano Reggiano label informs consumers know that this product is of a certain quality as well as uphol ding a tradition that is centuries old. The citrus labels are associated geographically, providing a product that is unique due to the region it is grown. In both case studies; however, the certification mark and PGI/PDO labels strive to provide consumer s a proof of authenticity for the product ensuring quality and safety. The c ertification mark of the Wisconsin Real Cheese pertains only to location, like a geographic indicator, only displaying the country, or in this case, state it is from. They do not specialize in any single cheese, but instead, strive to provide consumers a variety of cheeses and cheese products. In fact, their goal is likely to increase the amount of cheese types they produce, to create a larger market. As long as the milk is from Wisconsin cows, the cheese created and packaged in the state, the producer can use the certification mark. As a result, the mark or lab el of the Wisconsin Real Cheese does not instigate a single taste, flavor or aroma, but in its place, an assault of multiple varieties covering various mixes. Parmigiano Reggiano, on the other hand, specialized in one product and one product only: its na mesake, Parmigiano Reggiano cheese. Its belief is that with a concentration on one product can they then excel in their products; quality is the number one factor for the producers from the region. With their PDO label, producers must follow certain regu lations and procedures such as the 11 regulations (Appendix A)

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45 for feed and the 16 regulations (Appendix B) for marking the product, or labeling. It is through these practices that producers believe creates the exclusive qualities of genuine Parmigiano Re ggiano cheese. Another factor that makes Parmigiano Reggiano stand out from Wisconsin Real Cheese is the factor of time. Parmigiano Reggiano producers invest much time in a single wheel of cheese. If the cheese does not pass consortium evaluations at th e end of the maturation period (12, 18, 22, or 30 months) then the producer not only loses the cost of the producing the cheese, but also loses more than a year of their time which could have been used to start quality cheese. It is for this reason the Pa rmigiano Reggiano cheese can ask for a pre mium price on their product. R egulations, processing, storage and evaluation all costs the producer while holding off on a breaking even, or making a profit immediately. These four costs obviously distinguish the PDO Parmigiano Reggiano from the certification mark of the Wisconsin Real Cheese. One way costs can be neutralized is by requiring fees to join the Consortium or Board. Parmigiano Reggiano requires a fe e to join the Consortium. The amount of the generated by the fees and other services offered by the Consortium are in turn invested back into the Consortium making it a non profit organization, a sor t of cooperative. Wisconsin Real Cheese a l so requires a fee to join the Wisconsin Milk Marketing Board. In both cases, by joining the Consortium or the Board, dairies are paying for the regulatory and marketing services offered by them. The dairies prod uce and prepare the product; the marketing is done by the Consortium and the Board. By selling

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46 products in this fashion, there is a guarantee of a buyer for their product, thus insuring a constant flow of income. The second case compares a certification mark, Indian River Citrus, and a PGI, Citrinos do Algarve. Both are notable from their geographic locations. The certification mark here, for the Indian River Citrus, is similar to the Wisconsin Real Cheese mark, the only difference being Wisconsin Real Cheese is from the state of Wisconsin, while Indian River Citrus is from a region within the state of Florida. The PGI labeling does the same as the certification mark, identifying a product by region, as in the case of Citrinos do Algarve. This product is from the southernmost region of Portugal, identified by the unique characteristics of the coastal region. The citrus from Indian River, the easternmost part of the state of Florida, is marked by the Indian River Citrus League. They have created an as sociation where growers come together to discuss new technologies and techniques, season expectancies, and any problems or diseases threatening the plants. The main goal of the Indian River Citrus League is to create a combined marketing power for the gro wers of the region. The region has long claimed that the characteristics of the soil and climate, maintained by the geographic location, have created a fruit unique to the rest of the market. As a result, growers market competitively by using the Indian River Citrus certification mark. This mark has now become a household name in the U.S., even contributing a significant percentage to the entire citrus output from Florida. Citrinos do Algarve has recently become a PGI, the Algarve oranges not becoming p opular until the 1960s. The Direccao Regional de Agricultural e Pescas do Algarve, or Regional Agriculture and Fisheries of the Algarve, is the main regulating

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47 agency; however, the joining of growers is optional, thus only a handful of growers have joined the agency. Only if the grower is a part of the agency, can they use the PGI label Citrinos do Algarve. The label indicate s that the citrus has been produced in compliance with EC regulations, as well as including new techniques and fertilization that has now started to be used by growers in the region. Those who are not using the PGI label, usually just follow the EC regulations, and may or may not use some of the same techniques as other growers from the area. The growers from the agency may have co rroborated to increase output; however, they do not have enough market power to be competitive in the EU. This marketing issue is what distinguishes Indian River Citrus from Citrinos do Algarve. The latter is sold mainly in Portugal, not even being a hou sehold name. In order to become a competitive product, the growers from the Algarve region must work together to market their product within Portugal and the rest of the EU. best st answered case by case. In the case of cheese, it is obvious that the Parmigiano Reggiano PDO label is a better option because it protects a quality product with the assumption that all consumers are knowledgeable for the regulations of the production a nd labeling, thus ensuring its authenticity. The time spent on one specialty has allowed them to create a price premium on their product as well as creating a demand so high, that sometimes it is hard to keep up. The Wisconsin Real Cheese certification m ark, can identify a cheese, but not by type, only generically. A type of cheese may become popular, such as Wisconsin Cheddar; however, it can be easily substituted for

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48 another brand. It is from this information that we realized the PDO has better benefi ts than a certification mark. The Citrus case, on the other hand, has opposite results. The Indian River Citrus certification mark has worked hard to create a name for itself, leading to an increase in market power. By working together, growers now hav e a guarantee of sales, providing the fruit is of export quality. The Citrinos do Algarve, a PGI, should learn from the Indian River Citrus League to market their product in a manner that will increase their output as well as the demand for their product. So the assumption made here is that the certification mark worked better than the PGI. But we must also take into account the fact that these companies are created voluntarily, and, if for some reason, that Wisconsin Real Cheese decides to specialize, t hen the certification mark might work as well as in the case of Parmigiano Reggiano cheese. And, if the Citrinos do Algarve combine their efforts in marketing, they then could be as successful as the Indian River Citrus. This observation leads straight b ack to the fact that it must be a case by case decision. Any one label is not perfect and any one label can be manipulated to encompass any amount of regulations and rules to determine the image the consortium wish es to convey. Therefore, a decision to d ecide which form of labeling is better can only be made when costs are determined, as well consumer knowledge on the products they currently and in the future will buy. Negotiations in the WTO If the WTO accepts the EUs three proposals ister of GIs unprotected

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49 that have been generically used for many years. The main problem with the list of 41 products the EU wants to protect would be the loss of brand recognition that a trademark creates, a form of brand recognition that is prevalent for U.S. consumers. The list of 41 EU products could be interpreted differently under different Articles. If the WTO agrees to this list, under Article 22, it would be reasonable t o title a states origin. In other words, the label must not be misleading as to where it is produced to protect the origin of the original produ ct. However, Addor and Gr aziol i (2002) sell inferior products that are not derived from the appropriate origin, thus preventing premiums to be created for a higher quality product. If Article 24 exce ptions are put into place, then the acceptance of this list could allow that Parmesan could be deemed as a it is a PDO in Europe as Parmigiano Reggiano, it would prevent other imitations to use the Parmesan name within the EU (Marette, Clemens and Babcock January 2007) The exceptions in Article 24 are determined by national courts that may differentiate labeling in different countries. For example, Chablis is from the French region Burgundy; however, in the U.S., vintners producing wine with grapes from the Chablis region can use Chablis in the label to market within the U.S. In addition to these two articles, Article 23 is currently under debate that would allow for an expansion of wine and spirits to include food and agricultural products. This would result in a higher level of protection for all items, including the items in the GI list.

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50 On the other hand, Babcock and Clemens (2004) suggest that should the U.S. and the EU work together to create a joint international labeling program, then many agricultural based companies will want to label their products based on geographic location and origin. This would support rural producers b y allowing them to promote their products internationally, thus reducing the amount of risk of being pushed out of the market. As we have seen from all four producers in the case studies, working together creates a strong force in the market which in turn increases financial prosperity of the product; therefore, the creation of a geographical origin label would only benefit the producers. In the EU, the addition of geographic location has created price premiums for products and this premium may offset the increased cost for labeling. Trade negotiations will continue within TRIPS as more countries become involved in requesting their own systems and methods be approved forms of labeling. Instead of bilateral trade agreements, countries of the WTO seem to be moving on the multilateral trade agreements to make labeling easier for producers. We may see the countries of the EU accepting trademarks from other countries. Countries, such as the U.S., may have to accept PDO/PGIs that infringe on current trademar ks within their country. In either case the EU and the U.S. need to work together to set an example for the rest of the world by educating their consumers on the content and meaning of pancies.

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51 APPENDIX A PARMIGIANO REGGIANO RULES AND R EGULATION OF DAIRY C OW FEED Article Article Summary 1: Field of Application Feeding programs for cows that produce milk for the production of Parmigiano Reggiano cheese 2: General Principles in Feed Rationing Based on use of local forage; 50% of forage must be hay; forage to pellet ration must not be below 1; cows cannot be fed with feed that will change the aroma or flavor of milk 3: Origin of Forage 35% from forage produced on farm 75% from forage produced in region of PDO 4: Permitted Forage fresh forage obtained from natural meadows, mixed permanent meadows and lucern and clover crops crops of ryegrass, rye, oat, barley, wheat, maize, aftermath sorghum, It alian millet, cocksfoot, fescue, timothy, French honeysuckle, sainfoin, provided singularly or mixed together crops of pea, vetch and field bean combined with at least one of the forage essences specified in the previous point hay obtained by drying the a bove specified forage in fields or by forced ventilation (air drying) freshly cut forage obtained from the whole milk wax ripened or wax ripened corn plant, supplied immediately after harvesting and up to a maximum quantity of 15 kg/head/day cereal straw, exception of rice straw dehydrated forage obtained at temperatures exceeding 100C up to a maximum amount of 2 kg/head/day 5: Forbidden Forage and By products any type of silage forage heated by fermentation, treated with additives, moldy or contaminated forage rape, cole seed, mustard, fenugreek, fruit tree leaves and other leaves, wild garlic and coriander maize and sorghum rapiers, maize bracts, straw from soy, rice, as well as lucern and seed clover vegetables in general, including fresh and preserved rejects, waste and by products fresh and preserved fruit, as well as all fresh by products derived from fruit processing sugar and forage beets, including leaves and collets spent hops, distiller, marc, grape stalks and other by products deriving from the processing of beer, wine and sugar industries, distilleries, excluding molasses when used as a binder for pellets and dried beet pulp all slaughtering by products, including the rumen content all by products from the dairy industry 6: Pellets The following can be used: et pulp bean, up to a maximum of 3%

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52 7: Use of Pellets Must comply with daily amounts specified in annex; must have tags regarding the raw material ingredients; must be used in dry form 8: Forbidden Raw Material s and Products feed of animal origin (fish flour, meat, blood, plasma, feathers, by products of the slaughtering industry, as well as any dried by products from milk and egg processing) cotton seeds, vetch (including scourings), fenugreek, lupine, rye, col e seeds and grape seeds by products of rice processing: chaff, tailings, thin chaff, flour middling, buds and green grain extraction flours, cake and expeller of peanut, rye and cole seeds, seeds of tomatoes, sunflower with less than 30% protein, babassu, common mallow, Niger seed, baobab, cardoon Mary thistle, coconut, tobacco, poppy, palmisto, olives, almonds and walnuts manioc, potato and derivatives dehydrated feed obtained from vegetables and fruit and by products from their processing; molasses in liq uid form, wet yeasts and all by products from the sugar industry, with the exception of molasses used as a binders for pellets and dry beet pulp, of breweries (spent hops, including dried) and baking industries fermentation soils urea and derivatives, ammo nium salts, beet protein concentrate (BPC), still slops and distillers of any type and origin fats and soaps of animal or vegetable origin. Lipids of vegetable origin can be used only as support and protection of micronutrients, up to a maximum of 100 g/he ad/day. additives belonging to the group of antibiotics anti oxidants 9: Silage Fed Cattle Only heifers 6 months pregnant, bred in stalls, separated from dairy cows can eat maize silage; manure cannot be used in fields of dairy cows; can be reintroduced to dairy cows 3 months after silage feed has ended; milk can be used for Parmigiano Reggiano 6 months after feed has ended 10: Unifeed Ration Preparation of homogenous mix of dry forage and simple pellets; mix must be conducted on the farm; no fresh fora ge; if mix is humidified, must be mixed twice a day and used immediately 11: New Products and Technologies New products are tested by the Consortium and only then can they be used Source: Consorzio del Formaggio Parmigiano Reggiano

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53 APPENDIX B PA RMIGIANO REGGIANO MARKING REG ULATIONS Article Regulation 1: Marks Mark of origin and grade of mark; code to identity the wheel with pin dot writing of Parmigiano Reggiano around the wheel 2: Tasks of Parmigiano Reggiano Consortium Identification number of the dairy; marking on the wheel must be approved by the Consortium 3: Obligation of Dairies Must submit application 4 months prior to production; liable for improper use of labeling; must keep a journal daily on the production of the cheese 4: Defi nition of Production Lots and Quality Inspection 1 st lot: cheese produced January to April 2 nd lot: cheese produced May to August 3 rd lot: cheese produced September to December Quality inspection carried out by two Consortium members within the region of origin 5: Quality Inspection 1 st lot inspected starting December 1 of same year 2 nd lot inspected starting April 1 of following year 3 rd lot inspected starting September 1 of following year 6: Cheese Classification Based on external appearance, texture and aroma; Consortium must cut one wheel 7: Application of Ink Stamp At quality inspection, three categories are used to classify cheeses: first category, indicating the wheels classified as "first grade", "zero" and "one" Parmigiano Reggiano che ese second category, indicating the wheels classified as "medium grade" Parmigiano Reggiano cheese third category, indicating the wheels classified as "downgraded" and "reject" 8: Application of Hot Iron Marks On first and second category wheels, mark wi Reggiano has mark applied all around wheel 9: Invalidation of Marks of Origin Remove marks on wheels of third category and those wheels with structural defects; these wheels are sold by processing companies under a different name 10: Drawing up of Inspection Reports Record all operations of quality inspection, hot iron labeling, marking of categories, and invalidation of marks of origin 11: Claims Appeal Must be sen t by dairies within four days of inspection 12: Request for Rectification of the Marks of Origin Wheels that develop rind defect can be marked as third category by permission of Consortium 13: Request for Invalidation of the Marks of Origin For those w heels that cannot continue maturation, the progressive number must be invalidated by Consortium 14: Assignment of Wheels before the 12 th Month of Maturation All documents and notices shall carry the following statement: et for consumption under the Parmigiano Reggiano protected designation before having reached the 12 th Marks Starts after the 18 th month of maturation; wheel must be first category 16: Costs Dairies pay for all costs of labeling Source: Consorzio del Formaggio Parmigiano Reggiano

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54 LIST OF REFERENCES A Roadmap for Better Protection for Geographical Indications in the WTO/TRIPs The Journal of World Intellectual Property 5(6): 865 898. Albrigo, L.G., R. S. Buker, J.K. Burns, W.S. Castle, S. Futch, C.W. McCoy, R.P Muraro, M.E. Rogers, J.P. Syvertsen and L.W. Timmer. 2005. Hurricanes in 2004 on the Florida Citrus Industry: Experiences and Lessons Proc. Fla. State Hort. Soc 118: 66 74. Protecting Value MATRIC Briefing Paper 04 MBP 7, Iowa State University. Boman, B.J., and E.W. Stover. 2002. and Bio logical Engineering Department, University of Florida. Bournique, Doug. November 3, 2009. Director of Indian River Citrus League, Personal Communication. Citrus Administrative Committee. 2009 Utilization of Florida Citrus Fruit Reports Accessed May 2009 from http://www.citrusadministrativecommittee.org/bulletins/reports.html Consorzio del Formaggio Parmigiano Reggiano. 2008. Parmigiano Reggiano. Accessed December 2008 from http://www.par migiano reggiano.it/default.aspx Sociologia Ruralis 40(4): 439 451. Direccao Regional de Agricultural e Pescas do Algarve. 2009. A Citricultura Algarvia Accessed Septemeber 2009 from http://translate.google.com/translate?hl=en&sl=pt&tl=en&u=http%3A%2F%2Fww w.drapalg.min agricultura.pt%2F European Commission. 2009. EU Product Qauility Policy Accessed December 2008 from http:// ec.europa.eu/agriculture/quality/ Paper presented at Deliverable 8: First Project Workshop and Proc eedings, Cukurova University, Turkey, November. Eurostat. 2004. Portrait of the Regions Accessed December 2008 from http://circa.europa.eu/irc/dsis/regportraits/info/data/pt15_eco.htm

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55 Florida Department of Citrus. 2008. All About Citrus. Accessed July 2009 from http://floridajuice.com/page.php Folkeson, Carina. 2005. School of Economics and Management, Lunds University. Hofstede, G. 1980. onal Differences in Work Realted Values Newberry Park CA: SAGE Publications. ----Journal of International Business Studies 14: 75 89. Indian River Citrus League. 2008. History of the Indian River Citrus League Accessed July 2009 from http://www.ircitrusleague.org/history.html Loueiro, M.L. and J.J. McCluskey. 2000. Geographical Identifica Agribusiness : An International Journal 16 (3): 302 320. 07 MWP 10, Iowa State University. Citrus Production in Insight C onsulting. Country Images an d Preferences Hetergeneity for Mediterranenean Food Products: A discrete choice Agribusiness: An International Journal 21 (3) : 329 349. Schueller, J.K., J.D. Whitney, T.A. Wheaton, Cost Automatic Yield Mapping in Hand Computer and Electronics in Agriculture 23 (2): 145 153. Bulletin of the Torrey Botanical Club 102(6): 369 375. Sun Pacific. 2006. Cuties California Clementine Accessed October 2009 from http://www.sunpacific.com/cuties.html

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56 U.S. Dairy Export Council. Accessed December 2008 from http://www.usdec.org/files/Deli/PDFs/0_US_Cheese_Meat_Poultry.pdf U.S. Department of Agriculture Accessed December 2008 from http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELDEV3002488 U.S. Departme nt of Agriculture, ERS. 2008. Amber Waves various issues. Accessed August 2009. U.S. Department of Agriclture, FAS. Accessed September 2009 from h ttp://www.fas.usda.gov/htp/2009_Citrus.pdf U.S. Patent and Trademark Office. 2003. Accessed December 2008 from http://www.uspt o.gov/trademarks/index.jsp ----Accessed December 2008 from http://www.uspto.gov/ip/index.jsp. United Nations, Food and Agriculture Organization. 2006. Citrus Fruit. Accessed Septemeber 2009 fr om http://www.fao.org/ES/ESC/en/15/238/index.html. Accessed December 2008 from http://www.savorwisconsin.com/products_srch/default.asp Wisconsin Milk Marketing Board. 2009. Accessed December 2008 from http://www.eatwisconsincheese.com ----ccessed December 2008 from http://www.wisdairy.com/OtherDairyProductInfo/DairyStatistics.aspx World Trade Organizaiton. 2008. Accessed December 2008 from http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELDEV3002488

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57 BIOGRAPHICAL SKETCH Payal Kamlesh Patel was born and raised in the Carolinas where she lived until ninth grade After moving to Florida, she completed high school at F.W. Springstead High School in 2003 with a Bright Futures scholarship. University of Florida was her number one choice of colleges, and after some debate, chose the field of Food and Resource Economics, specializing in Agribusiness. After completing degree in 2008 she went on with the combined degree program to graduate with a master of science in Food and Resource Economics in 2009.