3 replies to this topic

[Simon]

Traceability in the U.S. Food Supply: Economic Theory and Industry Studies
Elise Golan, Barry Krissoff, Fred Kuchler, Linda Calvin, Kenneth Nelson, and Gregory Price, Economic Research Service, U.S. Department of Agriculture, Agricultural Economic Report No. 830.

Abstract
This investigation into the traceability baseline in the United States finds that private-sector food firms have developed a substantial capacity to trace. Traceability systems are a tool to help firms manage the flow of inputs and products to improve efficiency, prod-uct differentiation, food safety, and product quality. Firms balance the private costs and benefits of traceability to determine the efficient level of traceability. In cases of market failure, where the private sector supply of traceability is not socially optimal, the private sector has developed a number of mechanisms to correct the problem, including con-tracting, third-party safety/quality audits, and industry-maintained standards. The best-targeted government policies for strengthening firms' incentives to invest in traceability are aimed at ensuring that unsafe or falsely advertised foods are quickly removed from the system, while allowing firms the flexibility to determine the manner. Possible policy tools include timed recall standards, increased penalties for distribution of unsafe foods, and increased foodborne-illness surveillance.

Full 56 page report (pdf 242kb) : Traceability in the U.S. Food Supply: Economic Theory and Industry Studies

Alternatively read the report by chapter here:
http://www.ers.usda....cations/aer830/

Regards,
Simon

[Simon]

The text below is extracted from the report conclusions:

'Our analysis suggests that government mandated and managed traceability is usually not the best-targeted policy response to potential market failures involving traceability. Even in those cases where traceability is necessary for the development of differentiated markets, mandatory traceability systems often miss the mark. Systems that include attributes that are not of value to consumers generate costs without any corresponding benefits. Only systems that focus on attributes of value to consumers actually facilitate market development. In addition, the widespread voluntary adoption of trace-ability may complicate the application of mandatory systems. Mandatory systems that prescribe one trace-ability template and fail to allow for variation across systems are likely to impose costs that are not justified by efficiency gains.
One area where the government may be able to increase the supply of a valuable public good is by augmenting tracking systems for contaminated food once it has been bought and consumed. By strengthening foodborne ill-ness surveillance systems to speed the detection of food-borne illness outbreaks and the identification of the source of illness, the government could increase the capability of the whole food supply chain to efficiently and quickly respond to food safety problems. In addition, because they increase the likelihood that unsafe produc-ers are identified, surveillance systems may provide pro-ducers with increased incentive to invest in safety sys-tems, including traceability systems. In fact, any policy that increases the cost and probability of getting caught selling unsafe food provides producers with incentives to increase their traceback capabilities. These types of poli-cies will encourage the development of more efficient systems for the swift removal of unsafe foods and for investment in safer food systems—which is the ultimate objective of food safety policy.'

So there will be no mandatory tracking requirement for US food producers. It's interesting to see the US and Europe have studied similar industry dynamics and have come to diametrically opposing conclusions on the need to regulate traceability. Maybe the US is looking further ahead to ISO 22519 (ISO Traceability Standard).

The US has made its decision - do you think it's correct?

Regards,
Simon

[Charles Chew]

Hi Simon,

In a country that views its bio-terrorism act with such gusto, I must say I was immensely surprised by the analysis.

Nevertheless, despite the analysis, the food producing sector is not void of the responsibility of having an effective traceability system. Rather the onus to have such a system is more market / facility owner driven than legislative.

The analysis is conflicting to say the least especially when FDA plays such a major role in the national food bourne survellance program which effectively as a primary stakeholder hold substantive influence in product recall / withdrawal.

I am very sure the emergence of ISO 22519 in parallel with ISO 22000 will have meaningful worldwide impact on the food sector without exceptions.

Still blurr!

Charles Chew

[Simon]

Nevertheless, despite the analysis, the food producing sector is not void of the responsibility of having an effective traceability system. Rather the onus to have such a system is more market / facility owner driven than legislative.

<{POST_SNAPBACK}>

Maybe market / supplier pressure and dialogue is the most pragmatic way to develop traceability systems in the food industry. Like the report says it's not as though the US food industry have not addressed traceability issues under their own steam. However, the introduction of a mandatory traceability regulation such (178/2002) makes it specific and I feel the pragmatic route must present a risk in the short term. Just my opinion.

Regards,
Simon