Intellectual property rights could be Africa’s next big development opportunity

The European Union has added the iconic African rooibos (red bush) tea to its register of products with a protected designation of origin, like champagne, prosciutto di Parma, and feta. It is the first African product to receive such status in the EU.

This kind of recognition of intellectual property could be Africa’s next big development opportunity by repositioning key export products to bring countries a much fairer share of what consumers outside Africa eventually pay for these goods. And it is just the latest example in a quiet trend.

By Steve Evans – Flickr: Ethiopian Coffee Ceremony 011, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=20298011

Light Years IP is a non-profit organization that helps developing country producers gain ownership of their intellectual property and then use it to increase their export income. They work with producers, exporters, and governments to identify ‘intangibles in their exports and then use intellectual property tools like patents, trademarks and licences to protect it.

Each of the 48 sub-Saharan countries has five to six product opportunities with the potential to bring in $100 million a year, it says. That would represent $20-25 billion per year for about 100 million proucers and their families.

It knows whereof it speaks, having helped Ethiopia dramatically raise gains for coffee farmers by registering three heritage brands, helped women in South Sudan and Uganda get 25 times more income for their shea butter harvest, and helped the Maasai protect their culture.

Before Ethiopia branded its coffees more than a decade ago, the five big European coffee importers effectively set the prices as they had much more negotiating power than the Ethiopian exporters. So Ethopia earned only 5-10% of the millions that consumers paid for their fine coffees annually, and a million Ethiopian farmers produced only half their coffee potential because the prices were so low. 

While a North American coffee drinker might pay $5.00 or more for a cappuccino, many Ethiopian coffee growers earned less than a dollar a day. Some farmers abandoned coffee for narcotic plants, which were more profitable.

In 2004, the government set out to change that picture, through the Ethiopian Coffee Trademarking and Licensing Initiative. “Rather than focusing on short term gain, this way we can enlist the big companies to do what we don’t have the skills or financial means for – that is, building recognition of our brands in international markets and so increasing long term demand for them,” said Getachew Mengistie, former Director General of the Ethiopian Intellectual Property Office (EIPO).

One way to exercise intellectual property rights is by registering the product’s geographic origin, as with rooibos, but that didn’t suit Ethiopia’s circumstances. Specialty coffee is grown on four million small plots of land by 600,000 independent farmers, and while Sidamo and Harrar are named after specific regions, those coffee types also are grown elsewhere.

Registering trademarks to protect the coffee’s commercial origin seemed a better choice because it would let the government license and use the trademarked names exclusively, and it could generate more income because the coffees could be grown in many parts of Ethiopia.

The EIPO began applying to register Harrar/Harar, Sidamo and Yirgacheffe as trademarks in key markets including the US, the European Union, Canada, and Japan. In 2006, the US Patent and Trademark Office (USPTO) approved registration of Yirgacheffe. But objections to the other two coffees came from Starbucks, which had earlier applied to register a Sidamo brand, and  the National Coffee Association (NCA), representing US coffee roasters, which objected to Harrar and then Sidamo, claiming the names had become too generic a description of coffee. The USPTO rejected those applications. 

Starbucks, which didn’t drop its attempt to register ‘Shirkina Sun-dried Sidamo” until 2006, offered to help the EIPO set up a national system of certification marks so farmers could market their coffee as “robust” geographical indications, claiming this would be more effective. The EIPO appealed the PTO’s decision, and publicity about the Starbucks’ objection, and a campaign by Oxfam, greatly increased public awareness of the Ethiopian brands.

In August, 2006, EIPO won its case for Harar and in 2008, for Sidamo. Starbucks signed the licensing agreement in 2007. As of August 2009, the three coffee names were registered in 29 countries and more than 90 companies had signed the licensing agreement.

By Ninaras – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=65499361

Ethiopian coffee growers soon began to see positive results from the initiative – increased income and improved living standards. Yirgacheffe farmers doubled their income in 2007 from the previous year and expect to reach US $6-8 per kilogram. Overall, Ethiopia’s total coffee exports were expected to reach the level of US $1.2-1.6 billion as opposed to US $400 million prior to the Initiative,

Once Ethiopia trademarked its coffees globally, it could license distributors. And once 25 coffee comparies had signed licensing agreements, “the negotiating power balance changed in Ethiopia’s favour and the export price was increased to 275% of the previous price, resulting in over $100 million increase in export income, net of commodity price changes,” said Light Year IP.

The new status of rooibos tea will “signal its unique quality to consumers, not only in Europe but all over the world”, Western Cape Minister of Agriculture Ivan Meyer said. The South African Rooibos Council estimated that the total rooibos sales in 2020 equalled 6 billion cups of tea – close to one cup per human on Earth. In 2019, the biggest export markets were Germany (28%), Japan (22%), the Netherlands (9%) and the UK (8%).

The designation will give rooibos producers and farmers a market advantage, because only infusions produced in the local area north of Cape Town and according to specific rules can be labelled “rooibos”, and employment could grow further.The rooibos industry, which employs more than 8,000 farm labourers and many others in processing, packaging and retailing, is already the biggest employer of people from rural South Africa

Sources:

Light Years IP.

The Coffee War: Ethiopia and the Starbucks Story. WIPO, Sep 3, 2010

Rooibos tea: EU protection is good news for South African agriculture. The Conversation, Jun 28, 2021

Ethiopia Trademarking and Licensing Initiative: Supporting a better deal for coffee producers through Aid for Trade. Overseas Development Institute, 2006-7.