Spatial Dynamics in Agri-food Systems: Implications for Sustainability and Consumer Welfare

Abstract

Several studies have analyzed the conditions under which geographical indications (GIs), such as the European Protected Designations of Origin (PDOs) and Protected Geographical Indications (PGIs), can represent a profitable market opportunity for agri-food producers. The development of a common set of rules by a group of producers and the governance of the collective brand are key issues to jointly exploit market opportunities through GIs. This paper explores whether heterogeneous characteristics, resources and strategies of individual producers within a PDO Consortium influence their level of agreement on the future of the collective regulation and governance of GIs. We conduct an in-depth study on a representative sample of firms member of the “Prosciutto di Parma” PDO Consortium by integrating a multi-variate statistical analysis with a qualitative description of the vision that companies have for the future of their PDO. From the results of this study, we found confirmation that “Prosciutto di Parma” PDO Consortium members have highly heterogeneous characteristics which lead to significant segmentation in two major groups. The first segment includes a large number of Consortium members, mostly constituted by smaller firms, producing mainly PDO-labeled “Prosciutto di Parma”. The second is composed by a group of larger companies focusing on production of generic hams without the PDO-label. This difference clearly affects the level of agreement on the future regulation of "Prosciutto di Parma" as GI. The first segment advocates for the establishment of a “high-quality” PDO or for a PDO with stricter controls and standards, while the second would prefer that a PGI label was introduced, either in substitution to or parallel with the current PDO. Results, although explorative in nature, show that group heterogeneity influences the level of cooperation among the members of a producer group regulating and governing a PDO. Therefore, this study provides evidence that increasing group heterogeneity may represent a new challenge for the sustainability and profitability of GIs.

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