Geographical Indications in Latin America Value Chains: A "branding from below" strategy or a mechanism excluding the poorest?

Participation in Global Value Chains or International Value Chains dominated by industries and retailers from the developed world may allow the enterprises of developing countries access to the international market, but at the same time may give rise to difficulties for them. For lower income players, standing up to dominant players may involve developing strategies based on product certification driven, for instance, by growing consumer demand for organic products, Fair Trade products or products bearing a link with the culture and the history of the place of production. Geographical Indications (GIs) may thus represent an opportunity for developing countries to move into lucrative niche markets. Nevertheless, I argue that GI schemes embedded in Global or International Value Chains and implemented as a product differentiation strategy in developing countries may support the technical and economic development of some rural areas but at the same time they can contribute to the exclusion of farmers in more marginalised areas from the benefits of the initiative. There are two parts in the study. The first provides the theoretical framework on GIs and other certification schemes run in Latin American countries involved in Global Value Chains. The second part is a case study on cheese-dairy Value Chains in Nicaragua and a GI initiative for a Nicaraguan cheese, Queso Chontaleno (QC), embedded in an International Value Chain. The findings of the research constitute a warning to policy makers dealing with GIs in Latin American countries: when traditional Value Chains tend to be isolated and lacking independent governance mechanisms, GIs, like other types of certification, can become factors of increased marginalization, unless they are supported by adequate rural policies and legislation as well as a concerted transfer of knowledge. (C) 2013 Elsevier Ltd. All rights reserved.