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Final Report Summary - IPDEV (The impacts of the rules IPR rules on sustainable development)

This project responded to the need identified by the European Commission to assess the impact of IPR rules on economic growth (including investment), environmental protection (including biodiversity) and social goals (including rural development).

Overall the project created a number of conclusions. For example: agriculture in the European Union is faced with a rapidly changing political and economic environment. Food self-reliance is no longer an objective in an integrated and globalised world. Product-related agricultural subsidies, as a means of shielding agriculture from foreign competition, have been under heavy criticism from developing countries. New environmental requirements, such as the EU Water Framework Directive, raise the bar for the environmental performance of the European agricultural sector. Consumers become concerned with the quality of agricultural produce as the negative side-effects of industrialised agriculture - such as mad cow disease - become apparent. Wider demographic and social trends, such as the depopulation of remote rural areas and the dying off of small-scale agriculture, continue in many parts of Western Europe. All this reinforces a new perception by a wide array of stakeholders (consumers, farmers, non-governmental organisations (NGOs) and policy makers) on the different impacts of agricultural activities, with particular emphasis on the functions which go beyond the primary purpose of producing food products.

Attempts have been made to redefine agriculture in Europe, to give it a new self-understanding and a set of new objectives. It is commonly assumed that, with some local exceptions, agriculture in Europe will generally not be able to compete with North America and developing countries in the production of staple foods. One possible alternative is the production of biomass to be used as biofuel. However, it is unclear whether this would not be subject to the same competitive pressure as food products. The comparative advantage of Europe is therefore rather seen in specialised products, which adhere to particular standards (e.g. organic farming), or high-quality products that require and embody particular local knowledge. For the latter, production strategies ensured by geographical indications (GIs) is essential.

GIs may be applied for with different motivations in mind. The primary objective of establishing the GI will usually to achieve a price premium for the produce and thus ensure that traditional or unique local products remain competitive and economically viable. Hence, the primary motivation for establishing a GI, as results from findings of this work package, is based on economic considerations established on the premise of achieving product differentiation (competitiveness) based on goodwill or reputation constructed on unique / locally-woven characteristics and certified quality.

There is evidence from many cases that GI protection can help producers to reach their economic objectives, and that it contributes positively to regional economic development. Then again, the potential economic impacts of GIs must be nuanced according to the degree of consolidation achieved by the GI in relation to the total production of the local good and vis-à-vis competing economic activities. The commitment of economic actors involved in the supply chain towards the achievement of common goal (i.e. to produce and sell a strictly defined product) is essential for GI success, as mere institutionalisation of GIs is not sufficient. In this sense, attention should be brought to the fact it has been seen that actors, in different stages of the supply chain, depend on incentives which may increase proportionally to their capacity of 'capturing' the benefits generated by the GIs.

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