Markets segmented by regional-labelling with quality control

Abstract

The protection of the regional origin of foods is a major part of the EU s quality policy in agriculture. According to Council Regulation No. 2081/1992, the promotion of products having certain characteristics could be of considerable benefit to the rural economy, in particular to less-favored or remote areas, by improving the incomes of farmers and by retaining the rural population in these areas (Commission of the EU 1992). When the guidelines for State aid for advertising of products were established in 2001 (Commission of the EU 2001), only the promotion of those agricultural products can be supported which are protected designations of origin (PDO) as outlined in Council Regulation No. 2081/92 (Art. 2, Council Regulation No. 2081/1992)1. This decision implies that regional-origin labelling has to be associated with a quality-control system that leads to a superior quality, if the program is to be subsidised by the government.