Building On Fair Trade. Think Ownership.

By Laurence A. Pagnoni, MPA

Something new is happening to dramatically impact poverty for millions of low-income people. The intangible value of products has outpaced their physical value. What this means for low-income farmers and producers across Africa, Asia, the Caribbean, and South America is that achieving intellectual property (IP) ownership from the inception of the idea all the way through to the retail sale is a source of millions of dollars of income that should stay in their wallet and not be given away to others.

IP and supply-chain ownership works for big brands such as Coca Cola, Apple, and Louis Vuitton whose IP is worth more than the sum of their physical products. That same model also works for low-income producers.

Reducing Poverty Big Time

For example, I have worked with Ethiopian Fine Coffee and the project returned $101 million to coffee exporters by enabling ownership and licensing of Ethiopian coffee brands. We worked together for 10 years to refine the method and opportunities. That project showed that when you combine the Intellectual Property Licensing + Supply-Chain ownership + Positioning, magic is created.

This formula works for fine teas, coffees, spices, oils, honey, and indigenous people’s brands. This is the case for the Maasai of Kenya and Tanzania. Their brand is worth $25 million per year. I’ve participated in training 500,000 Maasai, and they are gaining their own licensing strategies.

The truth is that most development efforts focus on the 3% of value going to poor producers (see chart), but our approach looks at the 97% potentially able to be ‘captured’ by low-income producers. To illustrate, the following pie charts show typical return for distinctive products: 3-5%.

As you can see from this diagram, the bulk of the income goes to the wholesaler and retailer and not to the farmer and exporter. We can do better for low income farmers and producers! IP business strategies can return up to 45% more income to the farmer/producers. It builds on a fair trade approach, but at its heart, it’s about ownership!

An effective IP strategy requires a legal infrastructure of course, but no-one wins unless the structure is representative of the group and coordinated with them. For the Maasai we created “MIPI” – the Maasai IP Initiative which had a legal constitution, membership understandings, rules of engagement, and an ultimate decision-making guidance.

What’s new about this method? Corporations around the world use it all the time. What’s news is that when IP business strategies are applied to distinctive products, low-income producers benefit and secure higher export income, too. There are 4-5 products per country, about 220 products overall, and 100 million producers in Sub-Saharan Africa alone who can benefit. The method is applicable to India and the Caribbean, too.

The good news is this approach works with products ALREADY there. It’s just a matter of learning to marry the products with the opportunity in retail markets and tools already working for millions.

I’m Meg Brindle, and I’d be happy to share this method and 10 related workbooks that describe how to do this. Contact me at  if you’d like to talk about it.

We welcome your comments about this post on the LAPA blog.

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