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“Assessment of Potential Origin-Linked Quality Food Products and Their Demand in Ukraine”

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International Charitable Foundation “Heifer Project International” UKRAINE FINAL REPORT Project TCP/UKR/320 – SEU- LoA/10/004 “Assessment of Potential Origin-Linked Quality Food Products and Their Demand in Ukraine” Report Prepared by Yuriy Bakun (Heifer-Ukraine), Viktor Teres (Heifer-Ukraine), Oksana Osadcha (Heifer-Ukraine); with the support of the marketing expert Roman Korinets, and volunteers Perrine Loeuilleux, Irina Kasian KYIV – August 20th, 2010 1 International Charitable Foundation “Heifer Project International” Contents SUMMARY..........................................................................................................................................3 INTRODUCTION ...............................................................................................................................3 2. General and Sector-specific Analysis of Agricultural Food Production in Ukraine ...................5 2.1. Agriculture and export opportunities ........................................................................................5 2.1. National policy and development of rural areas in relation to traditional products ..................9 2.3 Legislation on geographical references in Ukraine..................................................................11 2.3.1 Procedure...........................................................................................................................14 2.3.2. Protection..........................................................................................................................17 2.3.3. Official control and certification authorities ....................................................................18 2.3.4. Specifications of the product............................................................................................19 2.3.5. Geographical limits of the origin......................................................................................20 2.4. Existing systems of food quality control, changes and opportunities .....................................21 2.4.1 Public structure of control .................................................................................................21 2.4.2 Overview of the system of food safety regulation ............................................................22 2.4.3 Certification: changes and opportunities...........................................................................23 3. Evaluation of the market potential ...............................................................................................25 3.1. Methodology of the study........................................................................................................25 Method and geography...............................................................................................................25 3.2. Administration of the project ..................................................................................................30 3.3. RESULTS: Overview of consumer survey .............................................................................30 List of Products Developed Based on Consumer Survey...........................................................31 3.4. OVERVIEW OF PRODUCER SURVEY ..............................................................................33 3.5. Selection of food products with potential for GI certification (based on results of Consumer Survey and producer Survey).........................................................................................................34 Table 11. Products Selected according to Developed Criteria...................................................36 3.6. Profile Cards............................................................................................................................39 Conclusions and Recommendations.................................................................................................39 APPENDIXES...................................................................................................................................42 APPENDIX 1. REFERENCES ......................................................................................................42 Appendix 2. LIST OF ABBREVIATIONS ...................................................................................43 APPENDIX 3. Database of Partners and Stakeholders Who Contributed to the Assessment of Potential Production of Products with Geographical Indication....................................................44 APPENDIX 4. Map indicating areas the study ..............................................................................49 APPENDIX 5. Analysis of Answers to Key Questions of Consumer Survey...............................49 Regional Overview of Consumer Survey...................................................................................65 APPENDIX 6. Analysis of Answers to Key Questions of Producer Survey.................................73 APPENDIX 7. List of Profile Cards ..............................................................................................90 FAO disclaimer: The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned. The views expressed in this information product are those of the author(s) and do not necessarily reflect the views of FAO. 2 International Charitable Foundation “Heifer Project International” SUMMARY The Project TCP/UKR/320 – SEU- LoA/10/004 “Assessment of Potential Origin-Linked Quality food Products and Their Demand in Ukraine” has had the following objectives: • the assessment of the potential GI products in Ukraine and their supply chains; • the assessment of the potential demand of Ukrainian consumers for domestic GI products and Ukrainian GI products' potential on export markets; and • the elaboration of recommendations and proposals for follow-up action to enable the Ministry for Agrarian Policies to implement policies in support of the realization of the GI potential in Ukraine. The project was implemented by the International Charitable Foundation “Heifer Project International” (Heifer-Ukraine under the financial and conceptual support of FAO TCP). Its main outputs were: • Identification of partners and stakeholders in development of regional quality food products (including producers, their associations NGOs etc.); completion of a database; and establishment of contacts; , • Conduction of a survey for potential assessment of demand for origin-linked traditional food products in 10 regions of Ukraine (about 100o respondents in all regions) • Establishment of a selection criteria for origin-linked quality food products and GI products, • List of origin-linked quality food products; • Completion of the profile card of a short list of potential products suitable to acquire GI label. • Preparation of the final report based on the analysis of secondary information and surveys’ results. This also includes the identification of current institutional framework related to quality products / types of products / types of markets (local, national, export-neighboring Europe) / requirements; list of selected products; profile card and a short list of potential products, which can acquire GI status and that can be used for further pilot projects. The survey also showed high need in the information campaign to inform both consumers and producers on traditional geographically-linked quality products, GI certification, history of products. INTRODUCTION One of the primary objectives of creating systems for promoting and certifying regional quality food products and protecting their designations is supporting diversity of agricultural food. Indeed, this system aims at economic development of rural areas by promoting an increase in income of smallholders (key producers), and by improving employment opportunities for local population. In addition to this, this system also meets the expectations of the consumers who increasingly pay attention to the quality of food and to its distinctive geographical origin (Development and promotion of traditional products in Vinnytsia oblast. 2010). In Ukraine Law no. 752 “On protection of the rights to indicate the goods origin” was adopted on 16.06.1999. It sets out the legal basis for protecting the rights for indicating the goods’ origin in Ukraine. The Law provides the legal protection for qualified references of the goods’ origin. The Law was developed and approved as a part of the preparation of Ukraine to join the World Trade Organisation and it fully complies with the provisions of the TRIPS Treaty (Trade-related Aspects of Intellectual Property Rights) regulating the world trade of the goods protected by intellectual property law. 3 International Charitable Foundation “Heifer Project International” According to the State Department for Intellectual Property of Ukraine (2010), the qualified references of the goods origin currently registered in Ukraine include only mineral waters (see table below). Table 1. The qualified
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