Linking people, places and products in tea business
The Sri Lanka Tea Board recently launched, the new logo of Sri
Lanka's Ozone friendly Ceylon Tea together with Ceylon Tea name as well
as agro-climatic regional names and logos as certification marks under
geographical indicators to protect and add value to premium Ceylon Tea
on a global scale, a process that was initiated in 2008.
It may therefore be useful to look at some of the certification
processes that are relevant to the tea industry, although some
plantations are already in this game.
Similar to any corporate policy and implementation procedure,
certification systems may vary significantly. Some may require that the
entire production process be monitored while others might only focus on
a specific stage of production. A few examples are discussed here.
Consumers are increasingly concerned about their health, the country
of origin and the quality of the products they consume. At the same
time, producers are equally concerned about protecting and adding value
to their products.
There are also important technical regulations and import
requirements of the United States of America, the European Union, Japan
and other countries from the Asia-Pacific region. They are compulsory
for exporters or producers who want to sell their products into these
The seven tea growing regions viz Nuwara Eliya, Dimbula, Uva,
Udapussellawa, Kandy, Ruhuna and Sabaragamuwa are expected to be
used as the certification marks under the Geographical
Voluntary standards are not compulsory. Growers, exporters and other
companies can decide whether or not to comply with them, and accept the
economic consequences of their actions.
There are three ways of verifying that a standard is met. In the
first case, a company may decide to adopt the standard and appoint some
of its employees to verify that all its departments comply with it. This
is called first-party verification.
In the second case, a company may demand that its suppliers meet the
standard and control itself that they do so. This is second-party
verification. Finally, a company may require that its suppliers meet the
standard and request an independent organization that is not involved in
the business relationship to control the compliance of the suppliers.
This is third-party verification, also called certification. Therefore,
by definition, the certification activity should always be done by an
independent third party. Ideally, the organization that has set the
standard should not carry out the certification operations itself.
Rather, it should authorize ("designate") competent independent
certification bodies to do this work after checking their capabilities.
A certificate is a written guarantee by an independent certification
agency that the production process or the product complies with certain
standards. These standards can focus on environmental issues (such as
soil conservation, water protection, pesticide use, or waste
management), or social issues (such as producer income, workers' rights,
occupational health and safety) or on other aspects of production like
Certification brings opportunities to producers such as market
access, protection of local resources, improvement of workers' health
and living conditions of rural communities. It may also ensure consumer
Certification is used to demonstrate that a product has been produced
in a certain way or has certain characteristics complying with a
standard. It is mainly used when the producer and the consumer are not
in direct contact, for instance in the international market where the
consumer cannot easily verify that the product was produced in the
manner described by the producer.
Certification can help differentiate the product from other products,
which can be helpful to promote the product in the market. Certification
can also help improve market access, and in some cases, result in higher
In large import markets such as Japan, the United States of America
and the European Union, there is a booming market for products certified
against certain private standards. Products certified as organic, or
fair-trade, for example, tend to fetch higher prices than equivalent
These countries import significant quantities of organic products
from Asian countries, for example organic tea from the People's Republic
of China and India, organic coffee from Timor Leste, organic and
fair-trade bananas from the Philippines and organic vegetables from the
People's Republic of China and Thailand. However, Asian exporters should
not overlook the regional market. Indeed, with the development of large
cities, the emergence of an urban middle-class and the growth of
supermarkets in Asian countries, national markets for quality products
are growing strongly..
Intrinsic food and beverage quality
In recent years a number of voluntary private certification
programmes have arisen to highlight specific characteristics of foods
and beverages that are not directly related to their physical, chemical
or biological properties. Instead, these programmes focus on cultural or
geographical features. Linking People, Places and Products.
A Geographical Indication (GI) is a name or sign issued by the WTO
and used on certain products which corresponds to a specific
geographical location or origin, for example a town, region, or country.
The use of a GI may act as a certification that the product possesses
certain qualities or enjoys a certain reputation due to its geographical
Therefore, origin-based products show specific quality attributes
linked to the geographical places where they are produced and, over
time, build a reputation by a Geographical Indication that identifies
These differentiated products have the opportunity to meet a specific
and remunerating demand and the potential to be part of a sustainable
quality virtuous circle based on their promotion and preservation of
This potential lies within their specific quality, which is a result
of a unique combination of natural resources (climatic conditions, soil
characteristics, local plant varieties, breeds, etc.) and local skills,
historical, cultural practices as well as traditional knowledge in
producing and processing the products. They reflect a unique combination
of local natural resources and cultural ones (traditions, know-how and
skills, some of which are transmitted through generations) in a given
territory, linking the product, the people and the place.
Seal of Quality
A geographical indication (GI) is a private voluntary standard that
has been registered by a producers' group eg Sri Lanka Tea Board or a
local government authority through the national administration in charge
of intellectual property. GIs are a seal of quality which helps to
promote know-how, tradition, diversity and quality for raw produce and
processed foods. GIs differentiate the product signalling distinctive
specific quality characteristics that are essentially attributable to
its origin, as the product comes from a determined geographic area.
Generally these characteristics are already recognized to some extent
by consumers at local, national or even international level. GIs confer
legal protection of the geographically related product name and prevent
the unauthorized use of the geographical indication on labels of
products from other regions. It is thus seen as an appropriate marketing
tool for regional and international trade of characteristic local
products. Examples of already existing Asian GIs include Binh Thuan
Dragon Fruit and Phu Quoc Fish Sauce from Viet Nam, Doi Tung Coffee from
Thailand, and Longjing Tea from China. Many Asian countries have
agricultural and food products which could benefit from GI protection
and promotion as for example Darjeeling Tea from India or Bali Coffee
To register a new GI, producers must define a code of practice for
the production and transformation processes, which they commit to comply
with. This is meant to characterize the unique specificity of the
product which will allow local producers to associate their product with
the geographical name.
Finally, a third party must inspect and certify the quality of the
production and transformation processes on behalf of the government,
which is the final guarantor of the quality of the product.
Once registered, producers and manufacturers who are located in the
geographic area and who meet the code of practice can use the GI label
created by the originator of the product and protected by the
The quality, reputation and characteristics of Darjeeling tea are
essentially attributable to its geographical origin, it possesses a
flavour and quality which sets it apart from other teas, giving it the
stature of a fine vintage wine.
As a result it has won the patronage and recognition of discerning
consumers worldwide for more than a century. Any member of the trade or
public in ordering or purchasing Darjeeling tea will expect the tea to
be the tea cultivated, grown and produced in the defined region of the
District of Darjeeling and to have the special characteristics
associated with such tea.
Sri Lanka Tea Board (SLTB) ceremonially launched the new logo for
Ozone-Friendly Ceylon Tea together and Agro-climatic regional names and
logos as Certification Marks under Geographical Indication, to protect
and add value to premium Ceylon Tea.
SLTB has taken action to protect 'Ceylon Tea and seven major regional
tea growing area names as Certification Marks under Geographical
Indications of the Trade Related Aspects of Intellectual Property Rights
(TRIPS) with World Trade Organization (WTO) backing. It is believed that
this exercise will greatly enhance the value of Ceylon Tea and other
specialty teas produced in the seven agro-climatic tea growing regions.
Organic agriculture is a production method which manages the
plantation and its environment as a single system. It utilizes both
traditional and scientific knowledge to enhance the health of the
agro-ecosystem in which the plantation operates. Organic farms rely on
the use of local natural resources and the management of the ecosystem
rather than external agricultural inputs such as mineral fertilizers and
agrochemicals. Organic agriculture therefore rejects synthetic chemicals
and genetically modified inputs. It promotes sustainable traditional
farming practices that maintain soil fertility.
There are specific requirements for most organically certified crops
as well as livestock, fish farming, bee keeping, forestry and the
harvesting of wild products.
Organic standards require that there is a conversion period (or time
that a farm has to use organic production methods before it can be
certified, usually 2 to 3 years).
How to get certified?
Standards for organic farming have mainly been developed by private
certification bodies but a number of Asian countries also have national
organic standards and regulations (e.g. Japan, the People's Republic of
China, Malaysia, the Republic of Korea, Thailand). In addition, there
are private initiatives that promote organic farming (e.g. the Green
Net/Earth Net Foundation in Thailand). The European Union, the United
States of America and Japan all have national regulations on the
labelling of organic products and if producers want to export their
products to these countries, they must meet these regulations..
Organic agriculture may represent an interesting opportunity for many
producers in Asia especially for those who presently do not use a lot of
agrochemical products. For example, the People's Republic of China
exports organic tea worldwide and organic vegetables to Japan, India
exports organic tea, the Philippines exports organic bananas and mangoes
and Timor Leste exports organic coffee. Once the plantation is
certified, selling organic products might improve the quality of life
and income of producers. Producers shift to organic agriculture for a
variety of reasons. Some feel that the use of agrochemicals is bad for
their health and the environment, while other producers are attracted by
the generally higher prices and the rapidly growing market for many
organic products in recent years.
Fair-trade is based on the fair remuneration of producers. Buyers
that commit to fair-trade must pay a minimum price to producers as well
as a premium called fair-trade premium. This premium should enable
producers to support themselves and to invest in community development.
In return, producers that commit to fair-trade must comply with labour
rights, environmental and social requirements.
Standard setting and certification are under the control of the
Fairtrade Labelling Organizations International (FLO). This organization
is the worldwide umbrella organization of 20 national non-governmental
organizations in Europe, America, Asia and Oceania. Other institutions
unrelated to FLO are also setting up fair-trade standards.
Various Asian producer groups benefit from exports of fair-trade
products. For example, the Philippines exports fair-trade bananas and
sugar to Japan, Thailand exports fair-trade rice, Indonesia fair-trade
coffee, India and Sri Lanka fair-trade vanilla, etc.
To obtain certification, producer associations must function in a
democratic manner. There are also rules on how the fair-trade premium
has to be spent and requirements for the protection of the environment.
A producer association or a plantation can benefit from fair-trade
certification since certified products normally receive higher and more
stable prices. The price paid to producers is determined by production
costs. It takes into consideration any additional costs that might arise
from meeting the fair-trade requirements, such as providing living wages
for workers. In general, the fair trade premium is meant to provide some
resources to the community to improve the living conditions of its
A key constraint in the fair trade system is that a group of
producers can only get certified if FLO finds that there is a market for
their fair-trade-labelled products. In order to enter the fair-trade
system, a necessary first step is to ask FLO and other fair-trade
importers for information regarding market opportunities for their
products. Another constraint is that when a producer association or a
plantation has been certified there is no guarantee that the whole
production will be sold and marketed as "fair-trade".
In conclusion, despite the few weak components in tea business in the
country, the tea trade is still highly profitable due to smart
marketing, fierce competition, and product innovation, at least for the
successful market players.