Traceability, Assurance and BioSecurity in the Food System: Livestock Sector Issues

1
Traceability, Assurance and Bio-Security in the
Food System Livestock Sector Issues

• Presented at Farm Foundation Traceability and
  Quality Assurance Panel Meeting
• Kansas City, Missouri
• November 19, 2003
• DeeVon Bailey, Ph. D.
• Department of Economics and
• Cooperative Extension Service
• Utah State University
• Logan, Utah USA

2
Reasons for Traceability Inject Accountability
at Each Level of the Marketing Chain

• Lumber protection of old-growth forests
• Diamonds reduce trade in conflict diamonds
• Food food safety/food quality

3
The Hierarchy of Consumers Food Preferences.
Source Jean Kinsey, University of Minnesota
4
US Livestock System Relative to TTA

• Traceability not mandatory
• Viewed as a private (market) good rather than as
  a public health issue (public good)
• Willingness to pay has been a central question in
  the past
• Canadian BSE crisis has been a wake-up call
• National Animal Identification Task Force
• 48-hour traceback goal
• Target for animal identification in US is 2006
• Country-of-Origin labeling
• Processors and retailers demanding third-party
  certification of origin

5
U. S. Red-Meat System Lagging Competitors and
Customers in Terms of Traceability and Assurance
Systems?

• Liddell and Bailey (2001)
• Yes, U. S. pork marketing system in terms of
  traceability, transparency, and assurance (TTA)
• Weakness was in assurance programs
• Food safety programs beginning at the farm level
• Credence quality assurances (other than food
  safety, taste, grade, etc. but which are still
  valued by some consumers)

6
Areas of Concern about TA Identified by the Panel
During January Meeting

• How TA contributes to the value and cost of food
  products
• Responsibilities of the public and private
  sectors regarding the implementation of TA food
  systems
• How TA affects the risks and potential liability
  faced by participants in the food marketing
  chain.
• Technical issues and emerging technologies that
  facilitate or are barriers to TA
• How TA might affect the structure of the US food
  industry

7
Public vs. Private Goods

• Traceability systems have been implemented for
  different reasons and at different speeds
• EU public health issue public good
  regulatory requirement
• US market issue (willingness to pay) private
  good private marketing chain decision
• Determining the role of the public and private
  sectors depends on the different public goods
  (public role) and private goods (private role)
  that can be generated with TA
• Also depends on the credibility of each sector

8
Possible Public Goods

• Animal disease control and eradication
• Bio-security issues

9
Private Goods What Are Consumers Willing to Pay
for?

• Results from Dickinson and Bailey for auction
  experiments held in the US, Canada, Japan, and
  the UK
• Traceability valued to some extent by itself but
  more valued as a means of verifying other
  characteristics such as added food safety
• However, traceability is not merely an extra cost
  of production it can add value from a marketing
  perspective, but likely can rely on WTP for
  traceability to be the driving force for its
  implementation
• Market appears to be quite general and not driven
  by demographics

10
What Technology Can Do

• Data gathering and recording
• ID system (ear tag, micro chip, etc.)
• Requires standards for premises and animal ID
• Data entry and uploading
• Electronic or manual
• Data basing
• Data compilation and reporting
• But, what data should be gathered and who should
  have access to the data and when?

11
Technological Capability of Traceability Systems
12
Who is Credible?

• Whom do consumers trust to make different
  certifications?
• Study conducted in the U. S. and the US

13
US and UK Certifying Agencies and Brand Names
Used in the Study

• US
• Certifying Agencies
• US Inspection (USDA)
• USDA Process Verified (PV)
• Certified Angus Beef (CAB)
• Organic (OB)
• Natural Beef (NB)
• Brand Names
• Farmland (FL)
• Chairmans Reserve (CR)
• Tender Choice (TC)
• E. A. Millers (EA)
• Smiths (SM)
• Albertsons (AL)
• Maceys (MA)

• UK
• Certifying Agencies
• British Farm Standard (FS)
• Freedom Foods/RSPCA (FF)
• British Meat (BM)
• Fair Trade Federation (FT)
• Soil Association Organic Standard (SA)
• Brand Names
• Sainsburys (SB)
• Tesco (TS)
• ASDA (AD)
• Somerfield (SF)
• Safeway (SW)

14
Certifying Agencies/Groups Considered in the US
and the UK as the Most or Least Trusted to
Complete Certifications

• US
• Federal government inspection
• State government inspection
• Private companies
• Producers
• Food retailers
• Special interest groups

• UK
• National government inspection
• Local authorities
• Private companies
• Producers
• Food retailers
• Special interest groups

15
Some Observations for the US

• CAB seen as a quality indicator
• USDA seen as a safety indicator
• Brand names seen as signaling both safety and
  quality
• CAB had higher quality scores with initiated
  groups than uninitiated. Store brands rated
  lower than manufacturer brands

16
Observations Relating to the UK

• Certifying Agencies seen as signaling quality,
  safety, and environmental responsibility
• A strong environmental component exists in the
  Sainsburys score (Sainsbury had the highest
  rating)

17
US Relative Frequencies for Most Trusted Agencies
to Conduct Specific Certifications
18
US Relative Frequencies for Least Trusted
Agencies to Conduct Specific Certifications
19
UK Relative Frequencies for Most Trusted Agencies
to Conduct Specific Certifications
20
UK Relative Frequencies for Least Trusted
Agencies to Conduct Specific Certifications
21
Conclusions

• US participants perceived manufacturer brand
  names as superior to store brands in terms of
  quality and food safety attributes.
• UK consumers indicated that food retailers
  provide the highest levels of quality and food
  safety for beef products of the groups considered
  in the study.
• Private sector in both the US and UK appears to
  be preferred over government to make
  certifications for animal welfare, social
  responsibility, and environmental responsibility.

22
Focus of this Meeting

• Role of public and private sectors?
• Role of technology what it can and cannot do
• Designing an efficient and credible system
• Credible to consumers
• What should be communicated to policy makers
  about the issue of traceability and quality
  assurance?