Tequila and Cheese Offer Lessons for Rural Economies in Developing World

Specific products can help small economies compete in the global market.

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By Sarah Bowen, North Carolina State University

Tequila and cheese may sound like the makings of an awkward cocktail party, but new research shows that they have a lot to tell us about efforts to boost rural economies around the world.

Over the past 10-15 years, there has been a surge of interest from developing countries in creating protective measures known as geographical indications (GIs), which many countries view as tools that can help them compete in the global economy. GIs define a specific product according to its historical, cultural and geographic origin. The best known example is probably the sparkling wine known as Champagne, which can only technically be called Champagne if it is made from grapes grown in the Champagne region of France.

Countries put these GIs in place to prevent outsourcing, support traditional practices and encourage economic development in rural areas. The idea is that, by implementing GIs, the quality of the product – and the region’s monopoly on producing it – will be protected.

“However, the success of these GIs is highly variable,” says Dr. Sarah Bowen, an assistant professor of sociology at NC State and author of new research that examines two well-known GIs: tequila and Comte cheese. “I found that there are some key differences in how these GIs were designed that help explain why the tequila GI has largely failed to positively impact people in the tequila-producing region, while the Comte GI has been much more successful.”

The difference in the societal impact of the two GIs is fairly striking. The tequila GI mandates that the liquor be produced using only blue agave plants grown in an area encompassing the state of Jalisco and parts of four other Mexican states. But it has not been successful at improving the quality of life for farmers who produce the agave. In fact, the GI has created new social and environmental problems. Meanwhile, the Comte GI – which pertains to a hard, sharp cow’s milk cheese produced in eastern France – has been successful at bolstering small-scale farms, generating jobs and supporting healthy ecosystems in the region.

Bowen found that the way a GI defines a product’s quality plays a role in the overall success of the GI. “The Comte GI recognizes and protects the complexity of the entire production process – from the treatment of the cows to artisanal cheesemaking techniques,” Bowen says. “But, although the tequila GI focuses on specific technical parameters that the final product must meet, it provides no guidance on how the tequila is actually produced. Because that guidance is absent, tequila production is becoming increasingly industrialized – and the traditional character of tequila is endangered.”

A second key factor involves a region’s terroir, which is the collection of geographic and cultural characteristics that give a product its particular flavor. Specifically, Bowen found that GIs, which incorporate strong protections for terroir, give farmers a strategic advantage, because they are essentially the link between the terroir and the finished product. “For example, in Comte, the terroir consists largely of the pastures where the cows graze,” Bowen says. “By valuing that terroir, the GI promotes traditional agricultural methods and protects rural landscapes and biodiversity.”

However, Bowen notes, the tequila GI provides little protection for terroir – even though many people believe there is a link between terroir and taste – because tequila producers want to remain flexible in regard to where they buy their agave within the relatively large GI region. This situation gives farmers less bargaining power and drives down the price of agave, cutting out small, traditional farmers. It has also led to tequila producers purchasing lands in parts of the GI zone where agave has not traditionally been grown, so that they can plant their own crops. This has undermined the social foundation of the region, and created new environmental threats in the area.

“There are lessons to be learned from these two cases,” Bowen says. “As developing countries consider the creation of new GIs, they need to think about how to craft the GIs in order to reflect the needs of their specific environment and culture. The Comte case can serve as a model for how to develop a GI, but countries need to look closely at the specific conditions and challenges they face before creating their own GIs.”