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

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

• Presented at the National Public Policy
  Conference
• Salt Lake City, Utah
• September 23, 2003
• DeeVon Bailey, Ph. D.
• Department of Economics and
• Cooperative Extension Service
• Utah State University
• Logan, Utah USA

2
Reasons for Traceability

• Potential exists to compromise the integrity of
  the system by invisible participants
• Injects 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/animal health

3
Traceability Food Safety

• BSE
• Problem originates with farm-level inputs
• Traditional systems geared to identify pathogens
  not BSE
• Collapse of consumer confidence in EU during
  1990s BSE crisis
• Led to the development of new food monitoring
  systems
• Traceability as a foundation
• Accountability at each level of the food
  marketing chain beginning a farm level
• Traceability can hasten identification of the
  source of problems and product recall
• Biosecurity

4
Traceability Food Quality

• Intrinsic vs. Extrinsic characteristics
• Intrinsic perceived by senses
• Grading
• Tastes
• Extrinsic extra sensory characteristics that
  are invisible but still valued by some
  consumers (credence characteristics)
• Animal welfare
• Environmental responsibility
• Social responsibility

5
The Hierarchy of Consumers Food Preferences.
Source Jean Kinsey, University of Minnesota
6
Traceability Animal Health

• Disease eradication
• Effectively trace disease and exposed animals
• Facilitate disease control
• Foreign animal disease outbreaks
• Bio-security

7
Public vs. Private Goods

• Traceability systems have been implemented for
  different reasons and at different speeds
• EU public health issue public good
  justification for regulatory requirement
• US market issue (willingness to pay) private
  good private marketing chain decision

8
Present US Livestock System Relative to TTA

• Traceability not yet mandatory
• Has been 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 was a wake-up call that
  provided support and accelerated the effort
  relative to animal ID.
• 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

9
Are U. S. Red-Meat Systems Lagging Competitors
and Customers in Terms of Traceability and
Assurance Systems? What are the Risks?

• 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
• Extrinsic quality assurances
• Should U. S. producers and handlers care?

10
Possible Risks Associated with Not Implementing
TTA Systems

• Animal Disease control
• Bio-security considerations
• Market preservation
• Consumers are becoming more concerned about the
  inputs and processes used to produce food
• Competitors may be able to successfully
  differentiate food products based on TTA
• Domestic and foreign consumers may be willing to
  pay for TTA and a market opportunity may be lost
  if U. S. systems arent developed

11
Are Consumers Willing to Pay for TTA?

• 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 cannot rely on WTP for
  traceability to be the driving force for its
  implementation
• Other public health considerations must be
  incentive for implementation in the US red-meat
  system
• Bio-security, food safety (BSE), animal disease,
  etc.

12
What Technology Can Do to Facilitate TTA?

• Technology isnt a tremendous bottleneck
• Technology providers
• Data gathering and recording
• ID system (ear tag, micro chip, etc.)
• 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?
• National Task Force
• Standards need to be developed at each level
• Must be a national database all technology
  providers can communicate with and from which
  state and federal regulators can draw information

13
Technological Capability of Traceability Systems
vs. Goals of National ID System
National ID system will provide information on
public goods, but the capabilities of the system
will allow for a much richer set of
information about meat products that will be
incorporated into marketing and
production strategies and tactics.