Do geographical indications preserve farming in rural areas? Evidence from a natural experiment in Japan

Geographical indications (GIs), or signs on products indicating a region of origin, are expected to secure higher incomes and retain the rural population in less favored or remote areas. In this study, we examine the effect of GIs on the maintenance of farming using a case study on Uonuma rice, with region-of-origin labeling, produced only in the Uonuma district of Niigata prefecture in Japan. Although Uonuma rice is not yet an official GI, it qualifies in principle for GI registration under its long-standing reputation for quality and GI-like protection by the producer's organization. We exploit a municipal merger in a district adjacent to Uonuma district as a natural experiment, in which a hitherto homogeneous region was split and one section became part of Uonuma district. Using detailed community-level panel data, we find that there is a positive effect on the number of farm households and the area of operated farmland in a rural community. Also, producing Uonuma rice led to older farmers continuing to farm due to higher rice prices. Meanwhile, we found no evidence that the adoption of Uonuma rice had a positive effect on the number of young farmers. This may make it difficult to maintain the rural community due to the aging of community members.