Information Technology in the Food System

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14 Δεκ 2012 (πριν από 4 χρόνια και 9 μήνες)

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Information Technology

in the Food System:

Identity Preservation and
Traceback




Thomas L. Sporleder

[sporleder.1@osu.edu]



Prepared for
E
-
Commerce: Impacting the Way We Do
Business

Conference, Nashville, TN, October 1
-
2, 2001

Information Technology
and E
-
Commerce

Information technology (IT) is a
broad class of technologies that
facilitate information collection,
processing, and dissemination

E
-
Commerce is a subset of IT
designed especially for buying
and/or selling

The Dynamics

New agricultural and food supply
chain


Emergence of coordinated systems


Differentiation of products and
services


Rise of intangible social attributes



Specific Dynamics of
Global Food System

Genetic engineering
(biotechnology)

Food safety

Animal welfare

Genetic Engineering

Creates small
specialized niche
markets

Identity preservation
and traceback
necessary component
of these markets

Food Safety “Events”

Foot
-
and
-
mouth
disease (FMD)

Bovine
spongiform
encephalopathy
(BSE)

StarLink


[Cry9C
protein in Bt corn]

Foodborne Illness:

The Big Four

Listeria

Salmonella

Campylobacter

jejuni

E. Coli

Animal Welfare

Animal welfare is defined as
ensuring improved protection and
respect for the welfare of animals
across all species of meat animals

Areas under development: pen
size, slaughter conditions,
treatment during transport

Animal Welfare

Current concerns relative to meat
animals are similar to the
development of “dolphin
-
safe tuna”
some time ago

Federal regulations were
developed for dolphin
-
safe tuna

Specific Examples of
Information Requirements

What were the slaughter conditions
for this meat animal?

How much pen space did the layer
have that produced this egg?

Was this corn genetically
enhanced?

Is this soybean oil GM
-
free?

Problem for the Current
Food System

This information is NOT usually
collected or processed at various
points in the marketing channel

This information is NOT usually
passed along downstream as the
product moves toward the final
consumer

Dynamics Relative to IT

All these “events” lead to the same
requirement of the food system:
enhanced vertical information flow


How will this get done and who will
do it?

Complex problem with multiple
solutions

Consequences

of the Dynamics

Rapid consolidation
in the global food
system

Less commingling of
commodities but
more and higher cost
segregation and
vertical tracking


Consequences

of the Dynamics

Food system becomes more
globalized

Need for increased vertical
information flow and cooperation


Nomenclature by
Agricultural Commodity

Meat animals
: Traceback,
transparency, and assurance (TTA)

Food and Feed Grains
: Identity
preservation (IP)

TTA

Traceback

is the ability to know
specific information on various
characteristics of the product (i.e.
feeding protocols, genetic
background, production origin)


TTA

Transparency

is


The extent of coverage from
upstream industries to downstream
industries within the supply chain


How apparent the information is to
downstream industries

TTA

Assurance

is


Quality (is it palatable or nutritious?)


Food safety (is it safe to eat?)

Identity Preservation

The ability to know specific information on
various characteristics of the commodity
and value added product produced from
the commodity

For example: genetic modification,
production origin, production protocols
(e.g. organic or natural)


Alternatives for Who Might
Collect, Process, and
Disseminate Information

Private firms


Individual firms in
the supply chain


Third party firms

Government


Firm Strategy Problem

Signaling issue: how to
accomplish?


Build trust


Bi
-
directional


Firm


Consumer


Society


Firm

Evaluating Alternative
Signaling Mechanisms

How can firms decide among the
alternatives?


Question of Trust


Question of Efficiency


Question of Risk Sharing


Question of Manageability

Four Broad

Managerial Alternatives

Third Party



Government


Unilateral


Multilateral


Private

Firm Name and Location


System Coverage


Other Features


Name


Headquarters


Traceback


Transparency


Assurance


Currently
Operating in the
U.S.


Primary
Commodity
Coverage


SO.VIBA


France


Producer


Producer,
processor,
distributor





No


Pork, beef


Genetic
Solutions


Australia


Producer


Processor,
distributor





No


Beef


IdentiGEN


Ireland


Producer


Processor,
distributor





Licensing
agreement w/
Silliker
Laboratories


Beef


AgInfoLink
Global, Inc


British Virgin
Islands


Producer


Processor,
distributor





Yes


Beef initially


eMerge
Interactive


Florida


Conception
to harvest


Processor,
distributor





Yes


Beef, pork


Identity
Preserved


South Dakota


Producer





Farm


Yes


Crops


MediGenomix


Germany


Producer


Processor,
distributor





No


Beef


Encos


New Zealand


Producer


Processor,
distributor





No


Crops and
livestock


Four Broad

Managerial Alternatives

Branding


Intermediation


Direct (certification)


Vertical


Co
-
branding


Reputation


Warranties


Advertising


Four Broad

Managerial Alternatives

Insurance and/or Bonding


“Passive” firm strategy


Assures in a legal sense; minimizes
financial culpability, especially
regarding food safety


Does nothing relative to TTA or IP


Four Broad

Managerial Alternatives

Supply Chain Coordination


Vertical Integration


Strategic Alliance


Contracting



TTA Example: The

Swine
-
Pork Subsector

Where in the system and
how can information be
collected?

Who will collect it?

How will it be processed?

How will it be
disseminated?

Market Hog
Producer
Slaughter and
Processing To
Boxed Pork
Processing
FAFH
Retail
Final
Consumer
Schematic of Swine
-
Pork
Marketing Channel

Market Hog
Producer
Slaughter and
Processing To
Boxed Pork
Processing
FAFH
Retail
DNA Tracking
Lot Tracking
Final
Consumer
TTA: What Information?

Market Hog
Producer
Slaughter and
Processing To
Boxed Pork
Processing
FAFH
Retail
DNA Tracking
Lot Tracking
Final
Consumer
Data
Intercept
DNA
Lot
Info
Pig
Champ
TTA: Where and

What Information?

TTA in the Global

Food System

Comparative
analysis by
country indicates
some countries
are more
advanced than
the United States

Distributor
Processor
Producer
Traceback
Transparency
Assurance- Food Safety
Assurance- Quality
TTA in Swine, U.S.
Distributor
Processor
Producer
Traceability
Transparency
Assurance-Food Safety
Assurance-Quality
TTA in Swine, U.K.
Distributor
Processor
Producer
Assurance-Quality
Taceback
Transparency
Assurance- Food Safety
TTA in Swine, Canada
Distributor
Processor
Producer
Traceability
Transparency
Assurance-Food Safety
Assurance-Quality
TTA in Swine, Japan
Distributor
Processor
Producer
Traceability
Transparency
Assurance-Food Safety
Assurance-Quality
TTA in Swine, Denmark
Distributor
Processor
Producer
Traceability
Transparency
Assurance-Food Sefety
Assurance-Quality
TTA in Swine, ANZ
Conclusions and Implications
for the Global Food System

Conclusions

IP And TTA are core IT and E
-
Commerce
issues

E
-
Commerce trend is consistent with the
information need if IP and TTA

Firm strategy relative to IP and TTA is as
a tactical question as well as a policy
question

Obsolescence of U.S. Government Role

Conclusions

Obsolescence of USDA Government
Role


Slow


Best at setting minimums for standards


Current pattern is relative to
commodities, not food products

FDA more modern but centered on
safety

Conclusions

U.S. government compartmentalized
and consequently specialized


USDA


FDA


EPA

Makes it difficult to take aggregate
supply chain approach for regulation
and standards setting

Conclusions

Broad
-
Based Third Party Limited in
the Long
-
Term


High transaction costs


Conducive to commoditization of
Attributes, not specialized attributes


Inconsistent with rent seeking and
innovation


Key Implications

Food production and processing will
generate more information

TTA and IP will be more expensive than
the current system

Consumers “right
-
to
-
know” will
dramatically influence IT and E
-
Commerce in the global food system

Agribusiness

and


Farm Income Enhancement

Programs