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

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

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

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  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) • Chairman’s Reserve (CR) • Tender Choice (TC) • E. A. Millers (EA) • Smiths (SM) • Albertsons (AL) • Macey’s (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 • Sainsbury’s (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 Sainsbury’s “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?

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