The Indian government has made it its mission to ensure that at the local level of India there is financial, technical and entrepreneurial strength. To pursue this mission, the “One district, one product” program was set up, the aim of which was to provide the necessary support for agricultural products. The idea was to provide infrastructure, marketing and financial strength to unique products in each district for effective monetization.
In the wake of these initiatives, the Government of India has now announced the One Nation One Fertilizer Policy (ONOP), which is expected to come into effect from October 2, 2022. Among many other practical and logistical reasons identified, one The main objectives of this program are to standardize fertilizer brands in the country by removing the control of urea and, within this, crop nutrients such as urea, diammonium phosphate and muriate of potash should be sold under one BHARAT brand, regardless of details. from the manufacturer. This scheme only applies to fertilizers that fall under the subsidy mechanism. The BHARAT brand will also be accompanied by the logo of the grant program offered by the government. Farmers are currently sourcing fertilizer from vendors of their choice, regardless of the physical location of the vendor, which has led to an increase in the cost of freight as the government identifies urea as a commodity with little power differentiation between sellers’ products. When the products of all sellers have a similar brand, farmers will not have to resort to these cross-border purchases, which will lead to a substantial reduction in the transport subsidy. All bags of urea must have a barcode and a fertilizer company would only be eligible for a subsidy if the product is sold by scanning the barcode. This is to ensure efficient tracking of products across state borders and, therefore, to have a transparent procurement process.
The notification also addresses the issue of placement of the brand name, logo and details of the manufacturing company and clarifies that two-thirds of the bag will bear the BHARAT brand and the logo of the grant program and that one-third of space will be available for the company logo and other details to appear on a bag of fertilizer.
This announcement has not received much positive feedback from fertilizer manufacturers as they fear that their brands’ brand identity will be compromised in the process. The agricultural ecosystem in India is unique in that fertilizer companies invest heavily not only in manufacturing but also in specialized training of farmers, conducting surveys, etc. be ready to change after this new diet.
The primary purpose of trademarks is to serve as source markers and differentiators for their owners, and how the mark is used in commerce and its corresponding ingrainment in the minds of consumers solidifies its journey. This new regime therefore raises a unique question with its basis in trademark law on the composite goodwill that manufacturing companies will generate for their own marks when used with the BHARAT mark. Also, in case the quality of the product is sub-par, would such a negative reputation be attributed to the top brand BHARAT mentioned on the bag?
Co-branding has its pros and cons. Co-branding is an extremely effective tool when both brands benefit from each other’s brand equity and, in many cases, opens up the other brand to the former’s customer base. Although a win-win, resolving the issue of dilution remains of paramount importance through such a co-branding journey, which will be the litmus test for the success of this initiative. co-branding.
This article was first published on MONDAQ