The Evolution of Traceability Systems

Traceability systems emerged in the mid-1930s in Europe as a way to prove authentic origin of high-value food, such as French champagne. In recent years, such systems have also been called for by increased consumer demand and by public sector action to improve food safety assurance. Capitalizing on the attention to this issue, food marketing strategies have arisen to use traceability systems to support branding. Such strategies can be seen in recent labeling trends, such as organic, fair trade, or low carbon production. As suppliers, buyers, consumers, and governments all respond to the incentives to create food traceability systems, global standards and new technologies are being developed to support efficient and consistent traceability.

3.1 Role of Governmental Regulations

To support international agreements on food trade, such as WTO requirements, national governments are introducing regulations that primarily address the following issues:

• Record-keeping and documentation requirements related to food products
• Labeling, including origin labeling
• Requirements related to product removal, recall, and notification

To fulfill these governmental regulations, it is generally not necessary for companies to implement a thorough traceability system. However, some governmental regulations are stricter than WTO minimum requirements. The European Union (EU) has been the first to put minimum traceability standards into law, as it has under EU Regulation EC 178/2002 Article 18. In addition, for some products, such as seafood, EU regulations require products to come from authorized processors that are in compliance with a variety of EU food safety and traceability regulations as well as international food safety systems such as HACCP. The strict requirements are forcing companies to choose between meeting the strict standards of top export markets and changing to less lucrative foreign or domestic markets.

3.2 Role of Buyers' Requirements

Despite the strict requirements of some governments, the strictest traceability standards are still those imposed by buyers, i.e., trading companies, wholesalers, and retailers. Buyers set their requirements based on what they perceive as demanded by the market, as well as by law. The buyers will demand information or documentation they feel is necessary to minimize the risk of a problem within the food chain. In highly competitive markets, a single food safety incident can ruin the brand name and even the business, and therefore buyers in extremely competitive markets, such as Japan, tend to have extremely strict requirements for their suppliers.

Once buyers have outlined their traceability documentation requirements to the suppliers, there are generally two methods used by buyers to confirm that suppliers have fulfilled the requirements. In the first method, the requirements are privately agreed upon between the individual buyer and seller. In this case, staff from the buyer's company or an auditor hired by the buyer will confirm that the documentation fulfills the agreed upon requirements. In the second method, the buyer requires the supplier to become certified as compliant with an open standard. In this case, suppliers are certified by and then subject to audit by the appropriate certification body. Open standards with traceability requirements include the British Retail Consortium Global Standard, International Food Standard, Safe Quality Food 2000 Code, GlobalGAP General Regulations, and ISO 22000:2005.

In general, the traceability requirements of these certifications are (i) product identification; (ii) recordkeeping for one-step-back, one-step-forward, and internal traceability; and (iii) periodic internal checks of the supplier's business to ensure traceability between the raw material received by the supplier and the finished product. It is important to note that these standards do not specify the exact data that must be collected or the method by which the data is supplied to buyers.

3.3 Certification Systems

In addition to the open standards, there are many other types certification systems such as organic, fair trade, or carbon certification, which are based on ethical or sustainability concerns and require documentation of inputs or production methods. In general, there are three types of certification: first-party, second-party, and third-party certification (Setboonsarng 2008). Each of these types of certification uses different auditing systems.

First-party certification is self-claimed or community-based certification. An individual farmer or group of farmers in a local community will sell a product that they guarantee is, for example, a pesticide-free tomato or free-range poultry. This method relies on consumers having a trusting and usually face-to-face relationship with the farmers or sellers.

Second-party certification is a system in which an intermediary that has a close relationship with the farmers provides consumers with information about the product. Some supermarkets use this system for the organic produce they sell. Second-party certification can be considered to be similar to product branding; the effectiveness of this type of certification relies mainly on the reputation of the trading agent.

Third-party certification entails an impartial third party auditing the production process or product movement to ensure that conditions set out under the standards have been adhered to. With a third-party reviewer, global and international standards can be introduced that will be consistent across borders and throughout complex trading relationships. This type of certification system, however, is generally far more costly than first- or second-party systems.

3.4 Uses of Information and Communications Technology

To lower information costs associated with traceability systems, the use of ICT is being explored. The key processes that ICT can support are: (i) identification of food products, (ii) data input, (iii) data transfer, and (iv) verification. Identification of food products requires product labeling to be easily identified at each stage in the supply and processing process. Data input requires documentation on processes the products undergo as they move through the supply chain, including locations, dates, times, and temperatures. Data transfer requires information sharing among the various food business operators, as well as consumers, auditors, and government inspectors. Finally, verification should be done to affirm that claims of products are true, by comparing raw material input volume with processed product output volume or by scientific testing such as DNA or chemical analysis.

The technologies can range in sophistication from simple software on a personal computer, data sharing through mobile phone technology, or an Internet-based data input website, to complex sensors using global positioning system (GPS) technology. Table 1 [ PDF 41.5KB | 1 page ] compares some of the traditional methods of traceability documentation with some new methods utilizing ICT to both collect and input data, as well as to share or output data.

Because traceability requirements can impose a significant burden on the players in the supply chain, the hope is that ICT can make data input more efficient and reliable, thereby lowering the cost of verifying compliance with traceability standards. In addition, the greater ease of data output and data sharing will improve the transparency and reliability of information. These technologies will also allow consumers more access to information about the origin and processing of the products they buy. This greater efficiency and reliability of information, coupled with quicker access to the data through electronic databases and tracking systems, can allow problems in the supply chain to be identified and solved more quickly.

While investing in ICT is expected to ultimately reduce the time and resources associated with paper-based record keeping, there are often high initial investment costs involved in moving from paper-based to electronic record-keeping. Therefore, finding the most appropriate technologies and learning from experience is critical for food business operators and public sector officials in developing countries. Looking at experienced markets such as Japan, which have been experimenting with ICT in traceability systems, may help the producers, suppliers, and governments in developing countries “leapfrog” directly to adoption of the most effective technologies.

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1. Prof. J. George
   (posted 10 June 2009 / 06:30:36 PM)
   
   A good study indeed to keep one updated with the new developments in the area of food safety. The authors have in a short and concise WP givena concise lessons fron the study. They need to be complimented on the effort. The authors must be encouraged to develop this WP into a full blown research paper. However, some comments that must find placein the full paper are as follows: (1) Can these lessons be generalised over different developing countries and production landscape where issues of livelihood and food security are paramount? (2) The public sector certainly needs to play a dominant role and hence the funding quantum and pattern needs a different exclusive treatment to make it more localised. Who will do it? (3) How do we get this traceability into a major concern as in Japan itself only 20% are following/participating in the ITES initiative for traceability.
   (4) Two case study products have certain limitations in other developing countries as they have a different definition of smallholder producer and these two products are not produced on an industrial scale dimensions. What adjustements are required or needs to incorported to the study to make it acceptable/practicable on wider spectrum of developing countries?