GI law and basmati

Basmati rice is considered inherently superior due to its aroma and long grain characteristics. Native only to the sub-continent for hundreds of years, the term “basmati” itself has become a brand name of sorts amongst rice varieties, thus commanding a premium price.

India and Pakistan are the only two countries growing basmati rice. Though Pakistan’s rice is accepted as basmati globally, it is not registered legally internationally. That would require involvement of several institutions including the Ministry of Commerce and the Law Ministry, before being taken to the parliament. The cumbersome process has had little push since basmati sales were not affected; allow the law to languish for nearly two decades.

However, sources in the rice sector indicate that Geographical Indication (GI) law will be enacted for basmati rice this year. To understand why this is important for Pakistan’s basmati exports, India’s history of GI law needs to be taken into context.

In December 1999, the Indian parliament passed Geographical Indications of Goods (Registration and Protection) Act. This act is used to identify agricultural, natural, or manufactured goods that have a special quality or reputation specific to a definite geographical territory. GI tagging is an intellectual property right (IPR) which confers legal protection and prevents unauthorized use by others. Internationally, the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS) is dedicated to geographical indications.

In 2010, GI status was granted to basmati rice grown in seven states including Punjab, Harayana, and part of Uttar Pradesh among others while Madhya Pradesh was excluded from the list. Indian media sources indicate that apex bodies Agricultural & Processed Food Products Export Development Authority (APEDA) and the Indian Council of Agricultural Research (ICAR) blocked MP’s inclusion due the state neither having a history nor the specific agro-climatic for growing basmati.

Madhya Pradesh has been fighting to be conferred GI status for basmati rice ever since then. Its case was rejected by the GI registry last year so MP has challenged the order in the Madras High Court. It appears that the primary contention against MP’s inclusion is that basmati rice will lose its premium tag that could lead to a decline in its prices. Since MP’s basmati rice is not accepted so by Indian authorities, the rice finds it hard to command the price its counterparts do in domestic and international markets.

While states fight amongst themselves, Pakistan’s lack of protection by GI law has not been taken to task by India. Consider this scenario: India tomorrow files a case under WTO claiming that they alone export basmati rice. Pakistan does not have GI tagging to back its claim and thus the price per unit charged by exporters would be adversely affected.

In terms of value and quantity, the most popular variety of basmati earns more than thrice the most popular variety of non-basmati rice. REAP data indicates that Super Basmati was on average $1,168 per ton whereas IRRI-6 Rice was $352 per ton in FY15. Since basmati rice is not protected legally, if India was to file a case against Pakistan, the country could lose this advantage of premium pricing. Markets like EU would no longer be willing to pay a higher rate for rice not accepted as basmati.

While promoting Pakistan’s basmati rice under GI law is not pressing at the moment, it is best to not be caught sleeping. In India, some specific states tried for and were accepted as basmati cultivating belts. The case is different in Pakistan where the GI law under consideration will be applicable to the country wherever requirements are met.

This is especially growing in importance since movements in EU, one of the biggest basmati rice consuming markets, indicate that Pakistan’s opportunity to export will increase. When EU decreased the fungicide Tricylazole levels acceptable limit, India’s exports were badly hit. Sources indicate that EU’s acceptable Aflatoxin levels are to be revised which may hamper India’s basmati exports further.