Intellectual Property: a $25 Billion Opportunity for Africa
What do Ethiopian fine coffee farmers, Uganda vanilla producers and women gatherers of Nilotica shea nuts have in common?
...They were all losing out on their hugely valuable products because of a lack of intellectual property tools. Ashoka Fellow Ron Layton is working to change that.
You might not realise it when sipping your fresh brew from Starbucks, but some of the world’s finest coffee was invented in Ethiopia more than 1,500 years ago.
Rural coffee farmers nurtured the crop after the Ethiopian discovery that the caffeine in the beans lifts spirits and creates a climate for chatting and socialising, which soon proved helpful in resolving disputes.
Today, three of Ethiopia’s most famous fine coffees are trademarked: Harar, Yirgacheffe and Sidamo. They are prime examples of how African small-scale producers have perfected their goods over decades or even centuries, in much the same way as widely recognised quality products like French champagne.
‘Champagnes’ of Africa
The fine coffee farmers of Ethiopia can be counted among the many producers of the ‘champagnes of Africa’. But although they are similar to champagne producers in the high regard that consumers hold for the retail product, they are totally different in terms of their income.
This has driven farmers to desperate measures. As the acclaimed documentary Black Gold highlighted back in 2006, the rock-bottom prices on the global market led some Ethiopian farmers to dig up their coffee trees and grow chat instead—a lucrative but illegal mild narcotic—in a desperate attempt to simply survive.
For social entrepreneur Ron Layton it was obvious that something in the system was going very wrong: “The international market failed to guarantee the continuity of a fine quality product through producer incentives. It failed to protect the world’s finest coffee. That is wrong. But something is really wrong when the producer of almost every fine quality African non-mineral export product receives little or no incentive for quality.”
The result, Layton says, is that we all lose out: producers of African distinctive products cannot make their businesses sustainable, and the consumer risks losing great quality products forever. From top-notch Ethiopian coffee to Uganda’s vanilla, which has the highest vanillin content in the world, the stakes are high.
Since he first became aware of the huge inequalities between producers of top quality products in developing nations 30 years ago, Layton has been working tirelessly on what he believes is the most obvious and powerful solution: Intellectual Property (IP). He set up Light Years IP: a non-profit assisting poor producers to gain ownership of their intellectual property and use it to increase export value.
In order to get the right price for their products, Layton believes farmers and suppliers should focus on the intangible value of their products; a process he calls IP Value Capture (IPVC): “I realised that producers who are extremely removed from global retail markets needed to focus on the non-physical value in retail prices. Intangible value mostly goes to the owners IP in retail products, usually brands”, he explains.
With this in mind, Layton started working with Ethiopia’s coffee growers and relevant government departments almost a decade ago. The numbers soon spoke for themselves: the country’s late Prime Minister was able to announce a gain of $200 million in export income between 2007 and 2010 alone.
Encouraged by the results, Light Years IP started a search for other products with the same potential. Its research report ‘Distinctive Values in African Exports’ showed fourteen opportunities, with an average annual income gain of $100 million per product.
Maasai and shea butter
Layton’s latest initiatives involve two world famous products and brands: “We help the Maasai people take control of their IP and we assist the Nilotica shea butter producers of South Sudan and northern Uganda. It is ‘business not as usual’, and it will enable them to yield large gains as IP owners from 2014 onwards.”
And the work doesn’t stop there: Light Years believes that there are at least 200 more opportunities for large groups of African producers, with potential gains of $25 billion per year.
Businesses that support producers using IPVC will find very different partners in the future, warns Layton: “Producers will be able to deliver increasing quality and reliability of supply. Like the champagne growers, they have products that consumers love and will pay for, so it is time they had the power to earn something more like a champagne income.”
Photo: William Warby / Flickr
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