requirements for new animal products traceability systems · animal health and security are...

Requirements for New Animal Products Traceability Systems

Wondu Business & Technology Services

February 2008

RIRDC Publication No 08/011 RIRDC Project No: WBT-3A

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© 2008 Rural Industries Research and Development Corporation. All rights reserved. ISBN 1 74151 600 5 ISSN 1440-6845 Requirements for NAP Traceability Systems: A Scoping Study Publication No. 08/ Project No.WBT-3A The information contained in this publication is intended for general use to assist public knowledge and discussion and to help improve the development of sustainable regions. You must not rely on any information contained in this publication without taking specialist advice relevant to your particular circumstances.

While reasonable care has been taken in preparing this publication to ensure that information is true and correct, the Commonwealth of Australia gives no assurance as to the accuracy of any information in this publication.

The Commonwealth of Australia, the Rural Industries Research and Development Corporation (RIRDC), the authors or contributors expressly disclaim, to the maximum extent permitted by law, all responsibility and liability to any person, arising directly or indirectly from any act or omission, or for any consequences of any such act or omission, made in reliance on the contents of this publication, whether or not caused by any negligence on the part of the Commonwealth of Australia, RIRDC, the authors or contributors.

The Commonwealth of Australia does not necessarily endorse the views in this publication.

This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. However, wide dissemination is encouraged. Requests and inquiries concerning reproduction and rights should be addressed to the RIRDC Publications Manager on phone 02 6271 4165.

Researcher Contact Details Wondu Business & Technology Services Level 31, ABN-AMRO Tower, 88 Phillip Street Sydney, New South Wales, Australia Phone: 61 2 93692735 Fax: 61 2 62366050 Email: [email protected] Website: www.wondu.com In submitting this report, the researcher has agreed to RIRDC publishing this material in its edited form. RIRDC Contact Details Rural Industries Research and Development Corporation Level 2, 15 National Circuit BARTON ACT 2600 PO Box 4776 KINGSTON ACT 2604 Phone: 02 6271 4100 Fax: 02 6271 4199 Email: [email protected]. Web: http://www.rirdc.gov.au Published in February 2008 Printed Canprint

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Foreword The purpose of this research project was to conduct a scoping study of the requirements for establishing traceability systems for the new animal product (NAP) industries. This included an examination of the business model options for traceability systems for NAP industries which have some unique features in terms of the diversity of species, wide geographic spread and generally small enterprise size and small number of enterprises. Animal health and security are emerging as key attributes in all animal industry supply chains throughout the world. The electronic National Livestock Identification System (NLIS) was introduced in Australia and accepted in all states for cattle during 2004-05, with sheep and goats starting a variation of the cattle traceability system in 2006. There is a growing perception among consumers that traceability systems enhance food safety and security. The secondary benefits of traceability systems are in facilitating electronic data recording, knowledge management and improved genetic management and ultimately improved commercial herd/flock productivity. This publication identifies and considers some of the issues of developing and adopting traceability systems for new animal product industries. The species included in the NAP industries extend through farmed rabbit, ostrich, emus, dairy sheep, kangaroo, crocodile, water buffalo, camel, yabby, ducks, turkey, squabs and several others. The report analyses data from existing traceability systems and case studies and collects primary data from international officials and observers and industry specialists in Australia. This project was funded from RIRDC Core Funds which are provided by the Federal Government. This report is an addition to RIRDC’s diverse range of over 1700 research publications, forms part of our NAP R&D sub-program, which aims to accelerate the development of viable new animal industries. Most of our publications are available for viewing, downloading or purchasing online through our website: downloads at www.rirdc.gov.au/reports/Index.htm

purchases at www.rirdc.gov.au/eshop

Peter O’Brien Managing Director Rural Industries Research and Development Corporation

http://www.rirdc.gov.au/reports/Index.htm

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Acknowledgments This study was conducted with the cooperation of many specialists working in livestock and food production and animal and human health policy setting places and traceability system technologies. The presentation of our paper on “Searching for the Optimal Traceability Business System” at the Dallas IDTechEx conference on livestock traceability systems was assisted by RIRDC and helped significantly in establishing international links with professionals working in the field. Respondents to the international survey on traceability technologies and regulations and perceptions about their future helped significantly, especially with our understanding of the current situation in different countries. Dr Vivien Kite provided useful information about how the Australian chicken meat industry deals with traceability in a low cost, efficient, effective and less publicised way. While we made use of information from different industries across different countries the views presented here are the responsibility of the author and may not always fully reflect those of the numerous people who helped make our task a little easier.

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Abbreviations AAFC. Agriculture and Agrifood Canada

AIN. Animal Identification Number (US term)

AITWG. Animal Identification and Traceability Working Group (NZ)

AFFA. Australian Government Department of Agriculture, Fisheries and Forestry

APHIS. Animal and Plant Health Inspection Service (US)

AQIS. Australian Quarantine Inspection Service

BCMS British Cattle Movement Service

BMC Botswana Meat Commission

BSE. Bovine Spongiform Encephalopathy

BTEC. Brucellosis and Tuberculosis Eradication Campaign

CCIA. Canadian Cattle Identification Agency

CFIA. Canadian Food Inspection Agency

CLIA Canadian Livestock Identification Agency

CJD. Creutzfeldt-Jakob disease

DEFRA. Department for Environment, Food and Rural Affairs (UK)

EAN European Article Number

EPC. Electronic Product Code (a number for uniquely identifying an item)

EU. European Union. In 1999, the European Union (EU) became the first significant market for Australia to impose a 'lifetime traceable' requirement. The NLIS is a national database designed to track cattle from birth to slaughter, thereby allowing qualifying producers access to EU markets. The term ‘EU status’ is used in the NLIS database to specify which devices (cattle) or properties meet the eligibility criteria for supplying the EU. The EU status is either ‘Yes’ if eligible or ‘No’ if not eligible. FANMEAT. Farm Assured Namibian Meat Scheme (Namibia) FAO. Food and Agricultural Organization

FDA. Food and Drug Administration (US)

FMD. Foot and Mouth Disease

FSANZ. FOOD STANDARDS AUSTRALIA NEW ZEALAND GTIN. Global Trade Item Number

GTN. Global Traceability Network

HACCP Hazard Analysis Critical Control Point

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HDX Half Duplex

IFA Irish Farmers Association

ISO International Standards Organisation

JAS. Japan Agricultural Standard

LITS Livestock Identification and Trace-back System (Botswanna)

MLA. Meat and Livestock Australia. MOA Ministry of Agriculture, Brazil NAP. New Animal Product (an RIRDC program). NAIS National Animal Identification System (NAIS) (US). NLIS - National Livestock Identification System (Australia).

NLIS ID (visual number). NVD National Vendor Declaration. PIC. Property Identification Code PIMC. Primary Industries Ministerial Council PO. Purchase order RFID Radio Frequency Identification.

RIRDC Rural Industries Research and Development Corporation

RPA. Rural Payments Agency (UK).

SENASA. Argentine National Services of Livestock Health

SINIIGA. National System for Individual Identification of Cattle (Mexico)

SISBOV System of Identification and Origin Certification for Bovines and Bubalines (Brazil)

SITRAP. Traceability Regulation System of Paraguay

SNIG. National Livestock Information System (Uruguay)

TBT Technical Barriers to Trade TGA. Therapeutic Goods Administration (Australia) TIF. Federal Type Inspection (Mexico) TSE. Transmissible spongiform encephalopathies UCC. Uniform Code Council UHF. Ultra High Frequency (transmission speed) USDA. US Department of Agriculture WTP. Willingness to pay

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Contents FOREWORD ............................................................................................................. III

ACKNOWLEDGMENTS............................................................................................ IV

ABBREVIATIONS...................................................................................................... V

EXECUTIVE SUMMARY............................................................................................ X

1. INTRODUCTION .....................................................................................................1

1.1 Objectives of the Research ............................................................................................................................. 1

1.2 Methodology of the Research......................................................................................................................... 2

1.3 Scope of the Research ..................................................................................................................................... 2 • Competitiveness ............................................................................................................................................... 3 • Regulatory Support .......................................................................................................................................... 3 • Functionality .................................................................................................................................................... 3

1.4 Outline of the Research .................................................................................................................................. 3 Argentina ............................................................................................................................................................ 5 Australia ............................................................................................................................................................. 6 Bolivia ................................................................................................................................................................ 8 Botswana ............................................................................................................................................................ 8 Brazil .................................................................................................................................................................. 9 Burkina Faso..................................................................................................................................................... 10 Canada .............................................................................................................................................................. 10 Chile ................................................................................................................................................................. 11 China P.R.......................................................................................................................................................... 11 European Union (EU)....................................................................................................................................... 12 Ghana................................................................................................................................................................ 13 Ireland Northern ............................................................................................................................................... 13 Ireland Republic ............................................................................................................................................... 14 Japan ................................................................................................................................................................. 14 Kyrgyz Republic............................................................................................................................................... 15 Mexico.............................................................................................................................................................. 15 Morocco............................................................................................................................................................ 16 Namibia ............................................................................................................................................................ 16 New Zealand..................................................................................................................................................... 17 Norway ............................................................................................................................................................. 18 Paraguay ........................................................................................................................................................... 18 South African Republic .................................................................................................................................... 18 Syrian Arab Republic ....................................................................................................................................... 19 Thailand............................................................................................................................................................ 19 Tunisia .............................................................................................................................................................. 20 United Kingdom [http://www.defra.gov.uk/animalh/tracing/index.htm] ......................................................... 20 Uruguay ............................................................................................................................................................ 20 United States of America.................................................................................................................................. 21 Vietnam ............................................................................................................................................................ 22

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2.2 Animal Species Covered ............................................................................................................................... 23

2.3 Objectives of Traceability Systems.............................................................................................................. 23

2.4 Functionality.................................................................................................................................................. 24 2.4.1 Administrative and Organization Functions ............................................................................................ 25 2.4.2 Data Capture and Data Contribution Functions....................................................................................... 26 2.4.3 Use of data for investigations, reports and analysis ................................................................................ 26

2.5 Devices and Technology ........................................................................................................................ 27

2.6 Regulatory Support: Now and Planned............................................................................................... 28

2.7 Institutional and Supply Chain Structures and Linkages.................................................................. 29

2.8 Compliance Experience, Costs and Benefits........................................................................................ 30

2.9 Education and Training ........................................................................................................................ 31

3. DEVICES USED IN TRACEABILITY SYSTEMS ..................................................32

3.1 Paper based Systems..................................................................................................................................... 32

4. TRACEABILITY AND INTERNATIONAL COMPETITIVENESS...........................38

4.1 Facilitation of trade in safe food products .................................................................................................. 38

4.2 Creation of consumer confidence and willingness to pay.......................................................................... 41

4.3 TRACEABILITY AS A TRADE BARRIER ..........................................................41

5. REGULATORY ISSUES .......................................................................................43

5.1 Regulation Substitutes .................................................................................................................................. 46

6. FUNCTIONAL REQUIREMENTS..........................................................................47

6.1 Objectives of the Traceability System......................................................................................................... 47

6.2 Essential Requirements of Traceability ...................................................................................................... 47 6.2.1 Scope of the Traceability System ............................................................................................................ 48 6.2.2 Individual or Group Identification........................................................................................................... 48 6.2.3 Six Sigma Reliability and Integrity ......................................................................................................... 48 6.2.4 Integration with Existing Databases ........................................................................................................ 48 6.2.5 Independent Audits.................................................................................................................................. 49 6.2.6 Nature of the IT Architecture .................................................................................................................. 49

6.3 Impact Sensitivity Analysis .......................................................................................................................... 50

6.4 Verification and Validation and Common Sense ....................................................................................... 50

6.5 Process Compliance ...................................................................................................................................... 50

6.6 Accountability and Governance .................................................................................................................. 50

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6.7 Education, training and learning................................................................................................................. 51

6.8 Customer Relationship Management.......................................................................................................... 52

6.9 Review it, Revise it …and include a ‘Sunset Clause’ ................................................................................. 52

7. TRACEABILITY MODELS FOR BUSINESS AND INDUSTRY ......................53 7.1.1 Klein Karoo Cooperative and Saco Systems (http://www.saco.co.za) ................................................... 54 7.1.2 The Australian Sheep CRC’s ‘E-Sheep " Project (http://www.sheepcrc.org.au) .................................... 55 7.1.3 Maple Leaf Foods and DNA Traceability System for Pork (www.mapleleaf.com)................................ 56 7.1.4 TraceFish and Traceability of Fish Guidelines: EAN ............................................................................. 57 7.1.5 NLIS and its Controversies...................................................................................................................... 59 7.1.6 Traceability in the Pork Production Chain .............................................................................................. 61 7.1.7 RFID Trials at Marks and Spencer .......................................................................................................... 64

9. ANALYSIS AND DISCUSSION OF RESULTS.....................................................70

10. IMPLICATIONS FOR FURTHER DEVELOPMENT AND IMPLEMENTATION ..72

11. CONCLUSIONS AND RECOMMENDATIONS ...............................................74

APPENDICES ...........................................................................................................75

APPENDIX A...................................................................................................................................................... 75

Client/Server Software Architectures—An Overview (courtesy of Carnegie Mellon Software Engineering Institute, Pennsylvania) ................................................................................................................ 75

Technical Detail................................................................................................................................................ 76 Usage Considerations ....................................................................................................................................... 78 Maturity ............................................................................................................................................................ 78 Costs and Limitations ....................................................................................................................................... 78 Dependencies.................................................................................................................................................... 78 Alternatives....................................................................................................................................................... 78 Complementary Technologies .......................................................................................................................... 78

Appendix B. Survey Report: Livestock Traceability....................................................................................... 79

APPENDIX C: Estimated Costs of a Radio Frequency Identification (RFID) System................................ 82

GLOSSARY ..............................................................................................................85

REFERENCES ..........................................................................................................89

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Executive Summary What the report is about This report describes the results of a research project into the requirements for establishing improved traceability systems for the industries covered by the New Animal Products (NAP) sub-program of RIRDC. These industries include farmed rabbit, ostrich, emus, dairy sheep, crocodile, water buffalo, camel, yabby, ducks, turkey, squabs, kangaroo and several others. They feature vastly different industry structures, ranging from highly concentrated ownerships and tightly integrated firms with strong brand development and which dominate poultry production through to fragmented supply chains with minimal brand development. These underlying structural features affect significantly the level of private investment in traceability systems. The more fragmented the supply chain the less likely there is to be private investment in a traceability system, unless accompanied by regulations that compel wide participation or taxes and subsidies that create incentives. Who is the report targeted at? The report is directed at all NAP industries. All industries are affected by growing regulations that encourage adoption of formal traceability systems. Background The annual value of livestock and products traded from the NAP industries exceeds $200 million with about 50 per cent exported. The sub-sector is growing at more than 5%/year and is emerging as an important enterprise option for producers seeking diversification of on-farm investments. Many of these animal species have shown themselves to be somewhat adaptable to variable climatic conditions. For the future, however, operators in these industries will confront increasing demands to demonstrate they have effective traceability systems that enable trace-back from retailers through processing to farm production and supply of inputs. Aims/Objectives The purpose of this research project was to conduct a study of the requirements for establishing improved traceability systems for the industries covered by the NAP program. The study examined options for business models and priorities for traceability systems that have to contend with small numbers of operations in the industries, small sized firms, different valued animals and diverse species and production systems. The study aimed to improve the level of understanding about supply chain operations and market needs, as well as regulatory issues, and explores the possibilities for unified traceability systems across several new animal product industries. Methods used The following activities were undertaken: • Identification and analysis of all relevant information on agricultural traceability systems in Australia and overseas, with interpretation placed on the implications and relevance for NAP industries. • The study gained an understanding of supply chain operator needs and constraints, noting that some vertically integrated NAP supply chains have advanced animal health security management systems and some have very little security systems in place. • Business model options were identified and the vision and goals of traceability for industry development examined. • Identification of the constraints to adoption and priority areas for development. • Description of requirements in systems definition, data collection, organizational development and implementation. • Identification of a program of future research for positioning the NAP industries to take advantage of traceability systems.

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Results/Key findings The European Food Law and US Bioterrorism Act are setting higher requirement targets for traceability and the trend is spreading to both importing and competitor countries. China, for example, has now introduced a new Animal Husbandry Law requiring farmers to maintain records of breeding, feed use and other inputs. While there are several drivers of the growing adoption of livestock traceability systems the report finding was that the single most important influence is the introduction of regulations to meet consumer concerns about the health and security of livestock and food in the supply chain. Although some animal species such as poultry may be viewed as higher risk groups than others because of links with infectious human disease, the research during this project showed that it would be a very high risk strategy to ignore having some form of traceability system for other animals, especially with bio-security emerging as an important driver of consumer preference and willingness to pay for food security. Associated with the regulatory underpinning there is the quest for international competitiveness, including market access and gaining an edge over firms with either non-existent or inadequate traceability systems. Implications for relevant stakeholders One of the most neglected areas of research into traceability systems is the measurement of user’s willingness to pay (WTP). This is a critical requirement for any sustainable business model, yet many industries and countries seem prepared to implement mandatory traceability systems in an ad-hoc way without this information and often with poor compliance processes, few checks and safeguards and little understanding of linkages required along the supply chains. A brief international survey that we conducted online found that over 80% of stakeholders across countries are dissatisfied with their existing traceability systems. The limited research that is available from the US, Canada, UK and Japan found that segments of consumers would pay a premium of as much as 7-9% at the retail level for traceability in beef, though associated characteristics (e.g. animal welfare treatment and meat safety) are even more highly valued than just simply satisfying traceability requirements. The price premium of 7-9% was well above the estimated 1.33% cost of implementing and operating the traceability system. While consumer WTP was estimated to be significantly positive on average there were also significant numbers not prepared to pay any price premium. This underlines the importance of understanding market segments and especially those with a willingness to pay price premiums because most of the NAP industries cannot compete on cost against either traditional industries(with their economies of scale advantage) or developing countries with their labour cost advantage. Contrary to some beliefs traceability systems do not have to be based on the latest technological wizardry. They can be manual or automated and automated systems can be based on barcodes or Radio Frequency Identification (RFID). What is important, however, is to have a process that members understand and are willing to comply with. The Australian chicken meat industry has a barcode system and processors indicate they can respond to a disease event within 2 hours. An industry protocol enables this type of system to work and without all the fanfare that seems to accompany other systems. Recommendations For the future the NAP industries have an opportunity, if it’s not already seized, to start gradually developing traceability systems. RIRDC can play an important role in the development process by helping industry start the development process and improving their capacity to develop effective, market driven systems. This could start with the formation of NAP Industry Working Groups on Traceability Systems. Initially, it may be practical to include all industries in the working groups, but as more information becomes available and unique industry requirements emerge then it’s likely that specialist specific-industry sub-groups would be needed. As a general guideline to further development it is recommended that a preference be given to non-mandatory, market driven measures, which enhance brand development through private investment in traceability systems. Many previous efforts to justify mandatory traceability systems on the grounds of market failure have failed themselves or are simply failing to remove the market failure.

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In this case there is the distinct possibility of emerging with a high cost regulatory driven system that not only fails to correct market failure, but also impedes private brand and commercial supply chain efficiency and development. Mandatory systems introduce these new problems: ● lack of attention to integration along the whole supply chain. ● lack of response to technological change. ● lack of accountability for performance outcomes including costs, benefits and control of performance. Perhaps the best role for a regulator is to simply insist that industry has to come up with a traceability environment with a high level of adoption and acceptable time for responding to a disease outbreak and then leave it to industry firms to reach a agreement on an acceptable protocol and implement solutions accordingly. The following steps are envisaged as a way forward towards adoption of traceability systems 1: Establish an industry based Traceability Working Group (this would comprise members across species and along the supply chain: feed materials to production, processing and retail). 2: Assign responsibilities to members according to expertise. 3: Analyse the current situation and outlook for traceability systems among domestic and international markets. 4: Initiate willingness to pay market research to identify market segments and precise requirements. 5: Identify and examine the organizational (including regulations) and technological options and their respective costs and benefits and make a choice to proceed or not. 6: Reach industry agreement on the recommended solutions. 7. Implement the recommended solutions. 8. Monitor, review and revise progress and the solution. It is recommended that RIDC assist the NAP industries to implement the steps outline above. These steps fit within the existing NAP 2006-07 strategies which include: ● to encourage further interaction between enterprises in the value chain by increased liaison, planning and implementing R&D. ● to continue to encourage national and international linkages for industry and research personnel. Further funding should also be made available through extending the NLIS to other species including those covered by the NAP. At present, most of the government funds to assist the development of traceability systems have been allocated to beef, sheep, goats and pigs, seemingly on the basis of industry value. Yet it is poultry (including ducks and turkey and squab and wild birds) that constitutes the main threat through avian flu. In the context of the threat posed by avian flu there is a strong case to help the smaller industries improve their capacity to respond to such an event. The following graph shows a framework for a quick picture or scenario of issues confronting development of a traceability system.

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Traceability Decision Tree: Where are you positioned now and where do you want to be in the future?

Very Important

Do not know

Quiteunimportant

Importance ofQuick Response to

Events

Adequate privateinvestment in

traceability systems

Under-investmentin traceability

system

Mandatory controlsto enforce investment

& compliance

Ask human &animal health

regulators Examine currentinvestment in traceabilitysystems by your supply

chainTest customer

willingness to pay

Monitor changesin regulations

Monitor changes incustomer

willingness to pay

Monitor practicesof competitors

Limited market failure,strong brands and high

level of capture ofreturns

Market failure, weakbrands, poor regulations

and uncoordinatedsupply chains

Efficientregulatorystructure

Inefficientregulatorystructure

Growing regulations toenforce traceability

Growing demands byleading supply chain

operators at both retailand processing level

Growing consumerwillingness to pay for food

from safe, secure andtraceable supply chains

Rapid changes in technologyincluding prospect for lowcost RFID and improved barcodes

Do nothing and goout of business

Low Risk

High Risk

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1. Introduction This report examines and identifies priorities for improved new animal product (NAP) identification and traceability systems. The International Standards Organisation (ISO) defines traceability in ISO 8402, as the ‘…ability for the retrieval of the history and use or location of an article or an activity through a registered identification system.’ For this study it is livestock of the NAP industries, the food made from them and consumers of that food that are the primary matters of interest. The intended outcome of this research is improved understanding of the costs and benefits and side effects of traceability systems, as well as the strengths, weaknesses, opportunities and threats of adopting or no adopting a traceability system for RIRDC’s New Animal Products Program (NAP) industries. The annual value of livestock and products traded from the NAP industries exceeds $200 million with over 50 per cent exported. The sub-sector is growing at more than 5%/year and is emerging as an important enterprise option for producers seeking diversification of on-farm investments. Moreover, many of these animal species have shown themselves to be relatively resilient to drought and adaptable to changing and drier climatic conditions (ABC 2006, 23 July). The species covered by the NAP industries include farmed rabbit, ostrich, emus, dairy sheep, kangaroo, crocodile, water buffalo, camel, yabby, ducks, turkey, squabs and several others. 1.1 Objectives of the Research The purpose of this research project was to conduct a study of the requirements for establishing improved traceability systems for the industries covered by the NAP program. The study examined options for business models and priorities for traceability systems that have to contend with small numbers of operators in the industries, small sized firms, different valued animals and diverse species and production systems. The study aimed to improve the level of understanding about supply chain operator and market needs, as well as regulatory issues, and explore the possibilities for unified traceability systems across several new animal product industries. There were several reasons for undertaking the research: • Traditional animal industries are well advanced in identifying requirements and in implementation of improved traceability systems. Smaller industries are likely to suffer a competitive disadvantage if they do not develop similar and equally competitive systems. • Growing regulations requiring traceability systems to protect animal and food health and security. • Growing concern about the potential for a pandemic from Avian flu (Strain H5N1) and similar infectious diseases and the experiences with BSE (bovine spongiform encephalopathy) and its suspected association with v.Creutzfeldt-Jacob Disease (vCJD) may provide a new dimension and stronger public good case for an intervention in all livestock traceability systems. The link between domestic poultry and migrating wild birds adds to concerns in this area. This also provides reason for funding this research project from public resources. • Large supermarkets in Europe and the US have expressed their preferences and intention to increasingly source from suppliers with authentic quality management and traceability systems with a view to improving the integrity and security of their food supply and distribution systems. An EU delegation to Australia in 2004 recommended improved traceability systems be implemented for ratites and poultry production generally as a condition for future entry into the EU. • Opportunities for improved farm productivity from genetic improvement of farm animals are very high and have the potential to flow through to competitive advantages at the retail level. The process of genetic improvement is facilitated by having access to individual animal performance data and electronically storing this data for analysis.

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• The genomic sequences of animals have potential to be used for human genomic design and development and new industrial product development. The potential for new animals to contribute valuable genetic traits to human health products is virtually untapped. Researchers with the Human Genome Project have suggested sequencing the genomes of rabbits, kangaroos, wallaby, frogs and platypus to add to the diversity of their resource base. • Livestock identification and traceability systems can be used to improve the control of theft and fraud, as well as help control perceived threats from terrorism (http://www.ag-security.com/). 1.2 Methodology of the Research The study takes the form of an investigation into traceability systems operating in Australia and in other countries. The following activities were undertaken: • Identification and analysis of all relevant information on agricultural traceability systems in Australia and overseas, with interpretation placed on the implications and relevance for NAP industries. The range of uses of traceability systems was examined and emerging problems and opportunities identified. The cost experiences in complying with traceability system regulations were examined. • The study gained an understanding of supply chain operator needs and constraints, noting that some vertically integrated NAP supply chains have advanced animal health security management systems and some have very little security systems in place. • Business model options were identified and the vision and goals of traceability for industry development examined. This included an assessment of the supply chain structures for NAP industries in terms of their suitability for traceability systems and improved data management and health security management. • Identification of the constraints to adoption and priority areas for development. • Description of requirements in systems definition, data collection, organizational development and implementation. • Identification of a program of future research for positioning the NAP industries to take advantage of traceability systems. The study process was helped by attending, gathering information and presenting a paper on traceability system business models to the Food Traceability Conference and Workshops, convened by IDTechEx, in Dallas, Texas, USA, in February 2006. The Conference provided an opportunity to hear from and exchange views with informed people on the current state of Radio Frequency Identification (RFID) and other livestock traceability technology, regulations and practices across different countries. This enhanced our level of understanding about current international positions on traceability systems and plans for the future.

An international survey was conducted to improve our understanding of existing and planned traceability systems operating in other countries and to identify and examine stakeholder’s opinions about the status and performance of different traceability systems.

1.3 Scope of the Research The research applies to all new animal industries in Australia and throughout the supply chain, from farm to end consumer. It is focussed on traceability system requirements, but does not extend to system design and implementation. Neither does the study examine the animal and human health regulatory issues, which are taken as given and part of the environment that traceability systems operate in. The study also has more focus on meat and food, though its recognized traceability systems and the enabling RFID technology are just as important for supply chain management of textiles, leather, clothing and footwear, which are all important primary or co-products of the NAP industries. A case study from UK retailer Marks and Spencer is included to illustrate the application to non-food products.

http://www.ag-security.com/

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The study focus is on three recurring themes: • Competitiveness • Regulatory Support • Functionality 1.4 Outline of the Research The first step in the study (Chapter 2) was to examine existing traceability systems in Australia and other countries. This examination was helped through interactions at the Dallas Conference on traceability systems, though a word of caution is underlined in that there is significant change ahead in both technologies and the regulatory environments being introduced, especially in the EU, US and Japan and more recently in Asian developing countries. This means some of the information reported here may soon become outdated. Chapter 3 deals with the technology devices being used and Chapter 4 with the connection between traceability systems and competitiveness. Most business operators in the food supply chain are interested in traceability systems primarily because of their impact on competitiveness and especially how any particular system will impact on market access and their customers. Regulatory issues and standards play an important role in traceability systems. A sound framework for evaluating regulatory support policies is essential if both competitiveness and market failure concerns are to be addressed through a traceability system (Chapter 5). The search for uniform standards is also an important issue for users. From the experiences in other industries, competitiveness drivers and regulatory measures provide the basic framework for a traceability system’s functional requirements (Chapter 6). Chapter 7 examines the options available for business models which have critical needs for sufficient revenue to cover costs. Several case studies are described and which extend across different animal species. An important issue here is the capturing and allocation of costs and benefits along the supply chain so that it’s not simply a business with monopoly power receiving all the kudos for introducing a traceability system and then shifting the costs to those without market power. Hence the importance of estimating willingness to pay for food from an authentic and recognized traceability system. Chapter 8 describes the results of an online survey of informed people dealing with traceability issues in different countries with further details in Appendix B. The analysis and discussion of results is in Chapter 9 with the implications for further development in Chapter 10. Chapter 11 provides a summary and description of recommendations for further development. Appendix A contains technical information about the client server architecture for automated systems and is provided courtesy of and agreement of the Carnegie Mellon Software Engineering Institute, Pennsylvania. Appendix C contains a ready reckoner for estimating costs at the production level of adopting an RFID system. The Executive Summary provides an overview of the study results.

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2. Review of Existing Animal Traceability Systems Traceability systems are used to record, transmit, store and analyse data or facilitate analysis of data for making decisions. ISO 8402 defines traceability as the ‘…ability for the retrieval of the history and use or location of an article or an activity through a registered identification system.’ The data of interest are typically embedded or applied to the surface of an identifiable product or object that conveys the information of interest to users. Modified forms or variations of traceability systems are not new. Tail tags have been used in Australia for more than 30 years. The US Animal and Plant Health Inspection Service (AHPIS) (www.aphis.usda.gov) has prescribed various ear tags, tattoos etc. for identification to control diseases for many years. But these systems would not in their original form satisfy the current requirements of ISO 8402, unless information about the tail tag numbers and movements of stock were held in a readily and quickly accessible database. Retailers have been using what they call supply chain ‘expert systems’ for 20 years or more to identify and track product performance. These systems have been used at the retail level to improve their responsiveness to supply and demand fluctuations, optimize inventory, improve reliability of delivery, set prices and facilitate new product development. Stevenson, Plath and Bush (1990) identified four initial drivers of the adoption of expert systems. When these four conditions exist they found an expert system could enhance the efficiency and quality of organizational decision making in that industry: ● Key knowledge acquired from experience or history is important. That is, decisions cannot be made simply on the basis of tests. Good decisions need knowledge from a diversity of functional areas – history of operations and treatments, technology etc. ● Problems tend to be unstructured and are not easily quantified. Uncertainty is high and there tends to be a lot of ‘what if’ scenarios. For example, what if the item of interest has been in close contact with some other item and contaminated it? What if there is a disease outbreak? What impact is it likely to have? What is the probability of an outbreak? How long will it take to identify the source and isolate it? ● Expertise to solve a problem is often incomplete and/or fragmented and held in different areas and by people with different skills. ● Problem solving requires or is enhanced the help of computers and communication systems. These may be viewed as the overriding generic conditions required to justify investment in an expert system for generating productivity gains and profitability improvements. Traceability systems for livestock may be viewed simply as a sub-set and an extension of the expert information systems applied to food and other industrial products for a decade or more. From a full supply chain perspective it might be seen as an anomaly or anachronism that the traceability system has taken so long to extend to livestock, which is basically the first step in a meat product supply chain. In response, it is important to recognize that mechanical and group type identification and traceability systems for livestock have been around for hundreds of years. These include branding of livestock, ear marks, tattoos, paint marks and neck chains. These methods were followed by plastic and metallic tags, tail tags, freeze brands and others. Finally, there is the electronic RFID tag which has become prominent with the advances in computer and communication technology. It also isn’t new. The technology is thought (www.wikipedia.com) to have been around since the 1920s and to have been first applied by a Soviet Union scientist, Leon Theramin, in 1945 while working to develop more efficient espionage technologies. This device is thought to be the first to use energy from radio waves of one frequency to transmit an audio signal on to another. This made the device difficult to detect unless it was powered remotely.

http://www.aphis.usda.gov/

http://www.wikipedia.com/

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There are also other technologies for transmission of information, including electrical, mechanical and chemical devices, though electronic devices like RFID look likely to be the leader. Today there is a vast and fast growing market for RFID tags. Moreover the functionality of tags continues to grow. They are no longer just simple identification and traceability devices. They can now enable inbuilt responses to external activation including, for example, sensing the time of tampering with a package or sensing when a food is starting to deteriorate in quality. The global smart packaging device industry is expected to experience double digit growth over the next decade, with sale of $US12 billion or more by 2015 (Harrop 2006 February). 2.1 Country Coverage Argentina Argentina is a large producer and exporter of beef and veal and its chicken meat exports have risen 400% over the last 5 years, from 16,000 tonnes to 64,000 tonnes (FAO Statistics). Bowles et.al. (2005) concluded Argentina has potential to further expand chicken meat exports to the EU by adding value through employing acceptable animal welfare practices to suit a receptive audience in Europe. Sheep meat exports from Argentina are also growing rapidly, though from a smaller base of 1,500 tonnes in 2000 to over 6,000 tonnes in 2005. Milk powder exports are also growing rapidly from 97,000 tonnes in 2000 to 176,000 tonnes in 2005. Argentina has traditionally been a net beef exporter, although in recent years economic recession and a Foot and Mouth Disease (FMD) outbreak have had a major impact on export volume (Souza-Monteira and Caswell 2004). The EU has been an important buyer of Argentinean beef, especially of high quality fresh beef cuts imported under the Hilton quota. Argentina is considered to be BSE free. The Argentine National Services of Livestock Health (SENASA) (www.senasa.gov.ar) administers livestock traceability systems and is a branch of the Secretariat for Agriculture, Fisheries and Food (http://www.sagpya.mecon.gov.ar). Its activities are based on the Law of Sanitary Police N 3959 for the control of livestock diseases and on the Decree N 4238 on Meat and By-products Inspection. SENASA defines the sanitary policy and coordinates its implementation through three Divisions: the Field Service (SELSA), the Slaughterhouse Inspection Service (IPA), and the Laboratory (DICOM). SENASA is supported by the National Institute for Agricultural Technology (INTA). INTA is also a branch of the Secretariat for Agriculture, Fisheries and Food). It is administered autonomously by a bureau consisting of livestock farmers, and academic and scientific representatives. Its staff is composed of 4,800 agents distributed over the country, including professionals in Animal Health and livestock development. Animal diseases such as brucellosis, tuberculosis, and Foot and Mouth Disease persist According to Souza-Monteira and Caswell 2004, citing SENSA, ‘… in January 2003, Resolutions 001/2003 and 002/2003 were published to assure traceability to the EU by creating procedures to register abattoirs, processing facilities, and feedlots authorized to export beef. The central traceability regulation followed in February in Resolution 15/2003 creating the Export Cattle Identification System. This system requires mandatory identification of every animal originating on farms and feedlots that is exported. All animals are supposed to have had, since March 2005, a visual tag on the left ear with an individual and non-repeatable code, as well as an identification of the farm where it was born. The animal must also carry the National Sanitary Register of Livestock Producers brand on its back. Every facility authorized to export must register the existence and all movements of animals in a book of registries approved by the regional branch of the Argentinean National Service of Agro-Food Safety and Quality. The Resolutions on the traceability system took effect in May 2003. Argentina has established a limited mandatory system of traceability directed at export markets. The depth of the Argentinean system is from the farm to the export port where carcasses or beef cuts leave the country. The system extends further along the supply chain than that of Brazil as it

http://www.senasa.gov.ar/

http://www.sagpya.mecon.gov.ar/

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establishes links beyond abattoirs but is not as extensive as those in Japan, the EU, or Australia because it applies only to exports. The characteristics recorded are not as broad as those in the Brazilian system and are also more limited than in Australia, Japan, or the EU. The system is able to trace back to individual animals and their respective farms of origin, but it lacks precision and accuracy as it relies quite extensively on information provided by operators and does not employ an integrated database. Argentina is an example of how traceability is limited by economic conditions. The economic crisis of 2002 in that country limited the capacity for introducing systems equivalent to those in Australia or Brazil, which are direct competitors of Argentina in international beef markets. Legislation was only introduced in early 2003 and it seems to have been a reaction to pressures from the EU. The Argentinean traceability seems to be mainly motivated by trade barriers, and ways of avoiding them, as only beef destined for export markets must be identified. Given that FMD and other animal diseases are not yet controlled, we would expect to see an economic motivation to extend traceability to the rest of cattle herd, as is happening in Brazil…’ There also seem to be compliance problems with the traceability system in Argentina (see below, under Brazil and the 2006 report by Irish National Livestock Chairman John Bryan). These concerns echo earlier concerns expressed by a European Commission Mission’s evaluation of public health controls over production of fresh meat in Argentina. Australia Australia has a history of identifying and recording animal movements, having introduced in the 1960s a cattle-tracing system for the bovine Brucellosis and Tuberculosis Eradication Campaign (BTEC) (http://www.animalhealthaustralia.com.au). The system was based on a unique identification number that was aligned to each farm (parcel of land). This tag identification number, known as the Property Identification Code (PIC), was eight digits in length, with the number accommodating a state identifier, a region prefix and an individual property number relating to that region. All Australian states introduced legislation to underpin the use of the PIC. The result was that the application of a tail tag or transaction ear tag became a mandatory requirement for all cattle sales and transfers of ownership. Over time, this system became the enabling instrument for surveillance of residues of agricultural and veterinary chemicals and monitoring in addition to disease surveillance and monitoring. The National Vendor Declaration (NVD) was introduced in 1996 and this took the form of a food safety/product integrity consignment note attesting to the fitness-for-purpose of a given consignment of cattle. From its inception the NVD has been linked to the consignment by the PIC. Official government requirements mean that a separate NVD and tagging system is required for some markets. Design of the National Livestock Identification Scheme (NLIS) started in about 1998-99. The Commonwealth, State and Territory Governments established the regulatory framework through the Primary Industries Ministerial Council (PIMC) (http://www.mincos.gov.au/about_pimc.htm). State and Territory Departments established and enforce the regulatory requirements for the NLIS. The Australian Government Department of Agriculture, Fisheries and Forestry (www.affa.gov.au) (AFFA) may establish and enforce the regulatory requirements in relation to export markets. MLA is the Administrator. It manages and administers the Database and provides technical and generic information and materials to the meat and livestock industry in connection with the Database. It also licenses the manufacture of Devices. SAFEMEAT (http://www.safemeat.com.au/) advises the Administrator about the management and administration of the Database. MLA manages the NLIS for SAFEMEAT. Since July 2004 it has been mandatory (supported by Commonwealth and State Government legislation) in southern states of Australia for all cattle leaving the property of birth to have an

http://www.animalhealthaustralia.com.au/

http://www.mincos.gov.au/about_pimc.htm

http://www.affa.gov.au/

http://www.safemeat.com.au/

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approved Electronic Identification Device (EID) attached to the right ear or a rumen bolus/ear tag combination identifier. The tags contain up to 16 digits, comprising an 8 digit property identification code (PIC); single digit manufacturer’s code; Tag type code (single digit, breeder or post-breeder indicator); single digit year code; and a five digit unique animal number. There are two tags being used with a white colour for animals born on the property and orange for animals acquired off the property (Photo 2.1). The RFID ear tags have a Half Duplex (HDX) technology, passive (activation by the reader) and have a low radio wave frequency of 134-135 kHz.

Photo 2.1: NLIS’ RFID Cattle Tags

A 2004 independent review of NLIS by Deloitte Touche Tohmatsu concluded the NLIS database was secure and robust and does exactly what it was to do in terms of its ability to accurately receive, hold, and process animal movement data submitted by users. The Deloittes Touche Tohmatsu's independent report is available from the NLIS section of the MLA web site, www.nlis.com.au. A further review is being carried out into database integrity, as this report is written, following reports of registration irregularities (The Land 2006). By the end of May 2006 NLIS reported that there were over 38 million devices registered (tags can be purchased in advance of being applied) on NLIS, with an average of 41,000 cattle movements/day. In 2004 a study into the cost of complying with NLIS was commissioned by MLA and concluded it was $5.52/head of cattle sold for a 900-head enterprise which is equivalent to about $4.42/breeder, $0.02/kg of live-weight sold or $2.45/head overall (Alliance Consulting and Management 2004). In 2006 Australia was probably leading the adoption of advanced traceability systems for cattle and sheep through the mandatory NLIS, although states and industries have implemented NLIS at different speeds and with different scope. The Northern Territory has been slower to adopt individual identification than other states because of their typically large herd sizes and has relied on a herd based identification system using waybills, except when moving cattle to states with individual identification requirements when they must comply with regulations in that state. In Queensland all cattle will require an NLIS tag from 1 July 2007. In NSW, which is representative of southern states, from 1 July 2005 all cattle must have been identified with an approved permanent identifier (NLIS device) before leaving any property or before entering NSW from another State or Territory. This is part of the mandatory procedures for Biosecurity, Compliance and Mine Safety (http://www.dpi.nsw.gov.au) in that state. Cattle consigned to a saleyard for sale or an abattoir for slaughter must also have had an approved visual transaction identifier (tail or ear tag) until 30 June 2006. Saleyards and abattoirs must scan all cattle sold and upload specified information to the NLIS database. Cattle being exported from a NSW air or sea port must be recorded on the NLIS database. From 1 January 2006, movements of cattle between properties have also had to be recorded on the NLIS database. These requirements are prescribed in the Stock Diseases Regulation Act 2004, relevant clauses of which are cited in the NSW Procedure. Further details can be viewed at the following web site: http://www.agric.nsw.gov.au/.

http://www.nlis.com.au/

http://www.dpi.nsw.gov.au/

http://www.agric.nsw.gov.au/

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NLIS Sheep and Goats commenced in January 2006. There is more information about NLIS Sheep and Goats at http://www.agric.nsw.gov.au/reader/nlis-sheep-goats/sheep-goats-nlis.htm. It’s similar in some respects to the cattle scheme but has important differences in terms of the tag type and scope of coverage. RFID tags are not mandatory, though they can be used so long as they have the PIC number on the device, which is what is required for the standard visual device. The PIC number is the same for properties running both sheep and cattle. Sheep and goats moving direct from the property of birth to slaughter for sale over the hooks currently are exempt from tagging, though this exemption is to be reviewed in 2007-08 and commercial buyers have the right to insist on stock being tagged as a condition of sale. The Australian pork industry is examining extension of NLIS and expect to be operating under a NLIS framework within 3 years which means 2009. The Australian Government has set aside $20m for the development of livestock identification and traceability systems, with $15m allocated to beef, $2.5m allocated to sheep and goats and $1.2m for pigs. Cattle breed societies are also starting to insist on DNA testing for their herd-book registers, which are then linked to the NLIS database for enhanced performance management and security for buyers of expensive livestock. Funds for development of traceability systems seem to be allocated on the basis of industry value or export value, and less on the basis of threat to human and animal health. Beyond cattle, sheep goats and pigs in Australia there is much more evidence of traceability being undertaken in the normal course of commerce and trade. For example, all the major chicken meat suppliers (about 10 businesses) can trace back to a single day's production1. This means that they can trace back to 2-3 farms, as only 2-3 farms at most will go through a plant in a single day, and all these farms would therefore be treated the same in a trace-back event. All product leaving a chicken meat processing plant is identified by barcode on the individual item packaging or on the boxes/trays in the case of bulk product. Most major retailers or fast food outlets only have one supplier of bulk product per store, and so even when bulk product (eg raw chicken breasts bought from the deli section in a supermarket) has been sold piece by piece to individual customers, there is capacity to trace back to the supplier, who, in turn, can trace back to the day of production (day they went through the processing plant) and plant of production, which then allows trace back to 2-3 farms that were processed through the plant on that day. Even in the case of further processed products and co-products, the products are bar coded to allow trace back to the plant and date of manufacture, and quality assurance records then allow the origin (day and plant) of the meat from which the products were manufactured to be determined, which again allows trace-back to the 2-3 farms that were the original source of the meat from which the products were manufactured. There are no plans for individual traceability of chickens in Australia because the costs would be prohibitive. Bolivia The Ministry of Agriculture in Bolivia, through the National Sanitation Service, has identified livestock identification and traceability a priority for development of the agricultural sector. Bolivian livestock and meat exporters are reported to be increasingly constrained by food health barriers in export countries (Food Traceability Report, January 2005). The Ministry is under pressure to include camelids in the scheme so that the alpaca and llama meat products can satisfy export market requirements in the EU. Botswana The Department of Animal Health and Production in the Botswana Ministry of Agriculture (http://www.gov.bw) administers the Livestock Identification and Traceback System (LITS). LITS was introduced, initially, as a pilot scheme with the objective of complying with EU regulations. The

1 Personal communication with Dr Vivien Kite, Program Manager Chicken Meat, RIRDC

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Botswana government then enacted legislation requiring all cattle to be electronically identified before being slaughtered or sold to any other party. Aleis International is understood to have supplied the Government of Botswana with a large number of rumen bolus’ for cattle and over 700 Portable and automated Race systems with RFID Links (www.aleis.com/aboutus.htm). Concerns have been raised about the investment and operating costs of LITS. The Botswana Meat Commission (BMC) (http://www.alliedmeats.com/bmc1.htm) , which was established in 1966 and has supported LITS, enjoys single desk export trading rights, though this seems to be a high costs solution that’s leading to a diversion of stock to the domestic market. In response, with support from the Government, BMC increased prices to producers, but that’s now lead to a major problem for the government treasury. Added to these problems is an outbreak in early 2006 of foot and mouth disease in the Bobirwa region of Botswana, which borders Zimbabwe. Brazil The Brazilian System of Identification and Origin Certification for Bovines and Bubalines (buffalo) (SISBOV) was established in early 2002 as a food safety requirement for meat exports. Trace back to the last farm and previous one from a carcass lot is possible. SISBOV had over 14 million bovines registered in 2005 out of a total bovine herd of 204 million (Homem 2006). There are also about 2 million bubalines in Brazil, but the number registered is not known. Since July 2002, all slaughtered animals exported to the E.U. had to be registered in SISBOV. It’s controlled by the Ministry of Agriculture (MOA) (http://www.agricultura.gov.br/) through the Secretariat for Agrarian Development and Corporatism. The MOA coordinates SISBOV (via the National Coordination of Traceability Systems); executes supporting legislation; supervises and audits systems; and administers the National Data Base (BND). The MOA and SISBOV is supported by five other entities: ● Accredited certifying entities that register farmers, farms and animals. ● Farms who apply visual individual identification devices (ear tags, brand) ● State agricultural services that exercise control over movements and help in registering farms, farmers and herds. ● Abattoirs that update BND and facilitate export inspection services. ● Federal inspection services that supervise relevant abattoir activities and make determinations on export findings. It is intended that SISBOV will be extended to poultry in future, but no date has been set. The SISBOV database has attracted some interest because of its decentralized nature. The accredited certifying entities (numbering 65 in 2006), which contain their own databases, assume much greater significance in the whole system than in some other systems. Pape, Jorgenson , Boyle and Pauwels (2004) see some similarities between SISBOV and the financial credit card database transaction system. Compliance with SISBOV has, however, been questioned recently following a visit to Brazil and Argentina by Irish Farmers Association (IFA) National Livestock Chairman John Bryan. He is reported as saying ‘… On 10 out of the 11 farms, there were no tags and no traceability system whatsoever. On one farm, where some animals were tagged, it was clear the system could not provide any level of accurate traceability. Branding was the only form of identification being used. The absence of tagging, traceability and movement controls and the serious deficiencies in the FMD controls completely undermines the quality of certification of beef exports being accepted by the EU. There are widespread reports that some cattle feeders in non-restricted states are purchasing livestock at lower prices from FMD restricted areas, which are not licensed for export to the EU.’ (http://www.laois-nationalist.ie/news/cstory.asp?j=28120).

http://www.aleis.com/aboutus.htm

http://www.alliedmeats.com/bmc1.htm

http://www.agricultura.gov.br/

http://www.laois-nationalist.ie/news/cstory.asp?j=28120

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The EU sent an inspection team to Brazil in early 2006 to investigate compliance issues (Food Traceability Report, 3 January 2006). The negative follow-up report pointed to insufficient control over livestock movement and a lack of cooperation among state and federal sanitation agencies. In an attempt to regain the confidence of major exports markets such as the EU, the Brazilian authorities have started to strictly enforce deadlines for export producers to register with SISBOV. Under the new deadlines, all livestock producers whose product is directly or indirectly destined for export must have their properties certified under the SISBOV system by January 2007. Producers who already have animals in the SISBOV registry have until December 31 2006to certify the rest of their herds. They may have a mix of registered and unregistered animals through the remainder of this year, but by Jan. 1 their entire herds must be included in the national database. Meanwhile, following a report of a case of foot-and-mouth disease (FMD) in the south western part of Brazil, Biosecurity Australia confirmed in October 2005 that imports of beef from Brazil to Australia remain suspended. Imports of beef from Brazil were suspended on 24 December 2004 and will remain suspended until an import policy review is completed (www.affa.gov.au). Burkina Faso This West African country is reported by the FAO (2004a) to have introduced a livestock traceability system for cattle, but the details are limited. It has implemented traceability systems for horticultural production exports to the EU. Burkina Faso also reported in April 2006 the presence of H5N1 strain of bird flu, which is also likely to prompt enthusiasm for a widening of the traceability system to poultry. Canada Under the Health of Animals Act, Canada has introduced mandatory identification and traceability for cattle, bison and sheep. The Canadian Livestock Identification Agency (CLIA) was established in July 2005 to develop a multi-species livestock tracking and tracing system (http://www.canadianlivestockid.ca/eng/index_e.htm). CLIA is continuing to push for a single identification and traceability system for all animal species. CLIA represents all of Canada's major livestock producer associations and its mandate is to provide multi-species livestock tracking and tracing services. The CLIA board of directors includes representatives of the Canadian Cattle Identification Agency (CCIA), National Livestock Identification for Dairy (NLID), Canadian Pork Council (CPC), Canadian Bison Association (CBA), Canadian National Goat Federation, Canadian Sheep Federation, Equine Canada, Canadian Meat Council (CMC), Canadian Veterinary Medical Association (CVMA), Agri-Traçabilité Québec (ATQ), Canadian Animal Health Coalition (CAHC), and Can-Trace. Agriculture and Agrifood Canada (AAFC) and the Canadian Food Inspection Agency (CFIA) represent the federal government and provincial governments and are also in CLIA. CLIA's vision is to establish an animal tracking system that will offer Canadian producers a significant competitive advantage, and make Canada the only country in the world with a comprehensive integrated national system. CLIA intends to set national standards for compliance and enforcement of animal tracking and tracing information for its member organizations. The CLIA also provides a forum for discussion of animal health and safety issues affecting all species and potential opportunities for joint research initiatives. Like Australia, some Canadian provinces and some animal species industry associations are moving at different speeds. The Canadian Cattle Identification Program (www.ncadaid.ca) is an industry initiated and established trace back system designed for the containment and eradication of animal disease, administered and enforced by the Canadian Cattle Identification Agency (CCIA). From September 2006 all cattle leaving their farm of origin must be fitted with a CCIA approved RFID tag. Until that time bar-coded tags are accepted. Regulations supporting the Canadian Cattle Identification Program are contained within the Federal Health of Animals Act and Regulations. CCIA has approved seven RFID options. The standards (http://www.canadaid.ca/About/CCIA_Standards0804.pdf) are similar to those

http://www.affa.gov.au/

http://www.canadianlivestockid.ca/eng/index_e.htm

http://www.ncadaid.ca/

http://www.canadaid.ca/About/CCIA_Standards0804.pdf

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adopted by NLIS and Allflex is an approved supplier of tags. The CCIA states it has 97% compliance. Initial funds for the CCIA were received through a grant from the Beef Industry Development Fund. Additional funds to be used for trials and development have been approved through AAFC, the CFIA and a number of provincial governments and private industry organizations. In Quebec traceability for beef production was implemented in 2002 and sheep production in 2004, with pork production in 2005. Canada has other more specific identification, strategy and facilitation schemes including the National Livestock Identification for Dairy (NLID), the Identification for Herd Health Initiative and Can –Trace. Can-Trace is described as a national, multi-sector whole chain coalition with representatives from producers to retailers. The objective of Can-Trace is to establish a voluntary food traceability standard with mandatory and optional data requirements that applies to all food groups. The Canadian Food Traceability Data Standard (CFTDS1.0) is seen as a major accomplishment. Can-Trace is endeavouring to achieve a consistent approach in the identification of what information has to flow between trading partners in the supply chain. Can-Trace is not technology dependent, but it does apply to all food groups. Agriculture Canada has an objective to achieve 80% traceability for all food groups by 2008. It is seen as an industry solution, not government driven and to focus more on standards for information flow, rather than how-to-do the information flows. Chile The Ministry of Agriculture in Chile established the Official Cattle Health Traceability Program (http://www.trazabilidad.sag.gob.cl) in September 2004, following assistance from the FAO to evaluate the technical and economic feasibility of identification and traceability systems (http://www.fao.org/tc/tcp/chile_en.asp). It is designed to meet EU traceability requirements (EC Directive 178/2002) and the US Bioterrorism Act. The Agricultural and Livestock Service (SAG) administers the program, which contains five basic components: ● Registry of cattle producing establishments. ● Registry of official individual identification devices. ● Record of livestock movements. ● List of transport options. ● Official livestock information system. The Program covers the whole country and it is understood there could be 95% of food and agricultural exporters with some form of traceability in place. A visual tag is used for identification. Other than cattle Chile has established a detailed document of standards for vertically integrated companies involved in chicken and turkey poultry meat production and processing in order to guarantee a reliable and a unified traceability system (http://www.rlc.fao.org/prior/segalim/animal/pdf/traeng.pdf). Chile’s salmon industry is also expanding its traceability system to include feed, ova, and packaging in response to increasingly strict requirements of export markets in the United States, Europe and Japan (Food Traceability Report 2006). China P.R. China has been drafting national laws for some time to safeguard the welfare of poultry and other livestock and to ensure food security and human health. From 1 July 2006 the new Animal Husbandry Law will apply across China and requires all farmers to maintain records of their breeding, feeding and use of inputs and movements of livestock. Compliance will be encouraged through farm inspections by officials and penalties for non-compliance. Prior to the new Animal Husbandry Law there were some local laws in place. For example, the rules of keeping animals and

http://www.trazabilidad.sag.gob.cl/

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http://www.rlc.fao.org/prior/segalim/animal/pdf/traeng.pdf

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poultry in Shanghai City required traceability throughout the whole process from breeding through feeding and use of medicines to sale in the market. A Canadian company Smart-tec Communications (http://www.smart-teksolutions.com/rfid.html) is reported to have designed for China RFID device, RTAC-PM, for livestock with particular application to poultry for the purpose of monitoring movements of stock using the Internet and RFID devices attached to cages, containers and trucks. Meanwhile Digital Angel (http://www.digitalangelcorp.com/) is understood to have developed for the Asian market a biothermal chip which can be inserted into the chicken’s breast as a single inoculation. China is reported by FAO Statistics to have as stock on hand in 2005 an estimated 489 million pigs, 171 million sheep, 115 million cattle and 22 million buffalo, 4.4 billion chicken, 725 million ducks, 268 million geese and 197,000 turkeys. In the global market, China is also a prominent exporter with an estimated 19 million live chickens exported in 2004, along with 99,000 tonnes of chicken meat. At the same time it imports an estimated 230,000 tonnes of chicken meat and over 1 million live chickens. European Union (EU) The EC General Food Law Regulation 178/2002, which establishes the common basis for food law in EU member states (including definitions, general provisions and specific requirements), is described in detail at the website of the Official Journal of the European Communities: http://europa.eu/eur-lex/pri/en/oj/dat/2002/l_031/l_03120020201en00010024.pdf. There are a number of articles in the regulation including establishment of the European Food Safety Authority (http://www.efsa.eu.int/), the operations of the Rapid Alert System for Food and Feed (http://ec.europa.eu/food/food/rapidalert/index_en.htm) and general administrative arrangements for the Directive. Article 18 of the Directive deals with traceability and states: 1. The traceability of food, feed, food-producing animals, and any other substance intended to be, or expected to be, incorporated into a food or feed shall be established at all stages of production, processing and distribution. 2. Food and feed business operators shall be able to identify any person from whom they have been supplied with a food, a feed, a food-producing animal, or any substance intended to be, or expected to be, incorporated into a food or feed. To this end, such operators shall have in place systems and procedures which allow for this information to be made available to the competent authorities on demand. 3. Food and feed business operators shall have in place systems and procedures to identify the other businesses to which their products have been supplied. This information shall be made available to the competent authorities on demand. 4. Food or feed which is placed on the market or is likely to be placed on the market in the Community shall be adequately labeled or identified to facilitate its traceability, through relevant documentation or information in accordance with the relevant requirements of more specific provisions. Article 11 of the Directive extends the scope to food and feed imported into the EU. In order to take a sufficiently comprehensive and integrated approach to food safety, there should be a broad definition of food law covering a wide range of provisions with a direct or indirect effect on the safety of food and feed, including provisions on materials and articles in contact with food, animal feed and other agricultural inputs at the level of primary production. In the EU regulations apply to the labelling of foodstuffs for the purpose of helping inform European consumers about the contents and the composition of food products. Labelling is seen as helping consumers to make an informed choice while purchasing their foodstuffs. Regulations applying to labelling are described in the European Council Directive 2000/13/EC. From January 2002, in order

http://www.smart-teksolutions.com/rfid.html

http://www.digitalangelcorp.com/

http://europa.eu/eur-lex/pri/en/oj/dat/2002/l_031/l_03120020201en00010024.pdf

http://www.efsa.eu.int/

http://ec.europa.eu/food/food/rapidalert/index_en.htm

13

to give consumers more detailed information about beef on sale, the beef label has had to include in addition to the place of fattening, slaughtering and cutting also precise information about where the animal was born and reared. Further information about EU labelling directives can be found at the following web site: http://europa.eu.int/comm/food/food/labellingnutrition/foodlabelling/index_en.htm. EU Directive 178/2002 introduced more specific traceability regulations for livestock and origin of food. Traceability is defined in the EU as the ability to identify a unique product, and the raw materials used in its production, and to follow the progress of that product right through the production and distribution process. Supply chain operators now require withdrawal systems for taking products out of the market place and records identifying the source of raw materials. Raw materials, semi-manufactures, finished goods and packaging will have to be traceable from production to their point of sale and consumption. This Directive widens the definition of foodstuffs to cover all materials and products that can be consumed by people in an unprocessed, semi-processed or processed form. The EU has conducted several research projects into livestock identification including IDEA (1998-2001) which evaluated the performance of an electronic identification system in ruminants including the feasibility of implementation across the EU. It found in favour of viability subject to a number of conditions: • Legislation that recognizes capabilities and constraints to identification technology. • Identification of technical specifications and guidelines for selecting suitable identifiers and readers. • EU level implementation protocols for application of electronic identifiers, reading, recovery and disposal. • Data management using a common glossary, data dictionary and communication standards. • Technical cooperation among EU Member States and between the Member States and EC for the preparation and review of implementation and conditions. A 2001-03 research project at the University of Barcelona examined the extension of traceability to DNA profiling as a molecular marker to enable traceability across animals, carcasses and meat cuts. Ghana Ghana is reported to have initiated a National Livestock Service Project in 1996 with an improved animal identification component (FAO 1998). In 2003 it received assistance of $US25m to help improve livestock productivity through improved genetics (FAO 2004). While traceability systems have been examined in these projects there is no evidence of an established system. The country exported 395 tonnes of fresh poultry meat (FAO Statistics 2006). Ireland Northern The General Food Regulations (Northern Ireland) 2004 govern food safety through the Department of Health, Social Services and Public Safety. The Department of Agriculture and Rural Development (www.dardni.gov.uk) maintains records of animal births, deaths and movements, complying with EU requirements for cattle producers to notify the Department of the births, death (including stillbirths) and movement of cattle. Animals must be double tagged and a herd register must be kept to record this information. Council Regulation (EC) No. 1760/2000 sets out the details of these requirements. The Department is required to apply sanctions to animals and/or herds that do not comply with the Regulations. The purpose of these sanctions is to ensure that cattle and cattle products destined for human consumption are safe. Additionally the Regulations protect farmers and others buying cattle of unknown origin. In this way the marketability of cattle is enhanced and the confidence of consumers in the safety of beef is increased.

http://europa.eu.int/comm/food/food/labellingnutrition/foodlabelling/index_en.htm. EU Directive 178/2002

http://europa.eu.int/comm/food/food/labellingnutrition/foodlabelling/index_en.htm. EU Directive 178/2002

http://www.dardni.gov.uk/

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Ireland Republic Ireland (http://www.agriculture.gov.ie/) complies with the EU directives (EC 178/2002) on traceability through its national regulations: ● National Sheep Identification System (NSIS). ● National Goat Identification System (NGIS). ● National Pig Identification and Tracing System (NPITS) ● Bovine animal identification and tracing system. The Irish Food Safety Authority (http://www.fsai.ie/) established the traceability system. The bovine system has the following main elements: (http://www.agriculture.gov.ie/index.jsp?file=areasofi/anim-id.xml).

• Bovine Tagging

• Cattle Identity Cards/Passports

• On-farm Herd Register

• Calf Birth Registration

• Computerized Cattle Movement Monitoring System (CMMS)

All Irish bovine animals are tagged at birth by the insertion of a yellow plastic tag in each ear. This tag contains a unique identification number. All animals presented at livestock marts, meat plants etc. must bear official ear tags. The herd owner or representative is obliged to register the birth of each bovine animal by completion of a National Calf Birth Registration form. This form is sent freepost to the National Calf Birth Registration Centre where the data is entered onto a central database. On receipt of the Calf Birth Registration Form, the National Calf Birth Registration Centre issues a National Bovine Administrative Document and Cattle Identity Card/Passport in respect of the animal registered. This document records details of disease testing, entitlements and sales. Since 1 January 1998, owners, keepers and animal movements are also recorded on the document. It must be presented for verification each time an animal is moved. The Herd Register is the on-farm record of the cattle in each herd. All herdowners are obliged to record the full details (ear tag number, date of birth, breed/colour and sex) of all cattle born on the holding and moved into or out of the holding and any on-farm deaths. The destination of all cattle moving out of the herd and source of all cattle moving into the herd must also be recorded.

In 1997, work commenced on the development of a computerized database to capture the movement of all bovine animals. This system is known as the Cattle Movement Monitoring System (CMMS) and it became fully operational at the beginning of 2000. It involves the use of electronic means to capture data on animal movements through computer links established at livestock marts, meat plants and export points. A notification system is used to record movements where the use of electronic means is not practicable. Implementation of this system provides for the verification of the origin, identity and life history of bovine animals before they enter the food chain. Japan In the Japanese livestock sector, traceability has been implemented to track animal movement and to quickly identify problems in the event of animal diseases or food safety concerns (Clemens 2003). In July 2002, the Law Relating to Special BSE Countermeasures was enacted. This requires mandatory traceback for cattle from the feedlot to the packing plant. Each cow is identified with a visual ear tag displaying an individual identification number. Producers must submit data on each animal’s date of birth, sex, and breed; name and address of owner, location of fattening and date fattening commenced; and date of slaughter. These data are entered into the “family register” of the domestic herd.

http://www.agriculture.gov.ie/

http://www.fsai.ie/

http://www.agriculture.gov.ie/index.jsp?file=areasofi/anim-id.xml

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In June 2003, Japan passed legislation requiring traceability from the farm through to retail sale. Under this law, processors, distributors, and retailers are required to provide traceability information from the slaughterhouse to the retail outlet. The law applies to beef muscle meats, but excludes offal, trimmings, ground beef, and processed products. Wholesalers and retailers can provide traceability information by individual animal or by lot numbers. Penalties for noncompliance range from warnings to fines and making violators’ names public. The government provides assistance (low-interest loans and credits) to help companies cover the cost of the computer and labeling technologies required to implement the system. The rate of adoption in January 2006 of food traceability systems in Japan at different levels of all food supply chains was as follows: (http://www.maff.go.jp/mud/633.html) ● food manufacturers – 38% ● food wholesalers – 37% ● food retailers – 36% ● producers of perishable food – 76% From June 2003, Japan’s Ministry of Agriculture, Forestry, and Fisheries has been developing a new Japan Agricultural Standard (JAS) program to certify the traceability of imported beef. To gain certification, exporters must be able to provide all the same information required under the Law Relating to Special BSE Countermeasures, plus the names of all feeds and pharmaceuticals used in producing the animal. The JAS certification is voluntary and domestic beef is also eligible for certification if the producers supply feed and pharmaceutical information. As of March 2006, there are three Standards with Production Information for beef, pork and agricultural products. New Standards are to be established depending on demands from consumers and producers (http://www.maff.go.jp). Japan is also active in development of new and more efficient RFID tags. The Japanese Ministry of Economy, Trade and Industry (METI) has a program focused on the international standardization and cost reduction of RFID tags (‘HIBIKI Project’). One of the aims of ‘HIBIKI’ is to reduce the cost of RFID tags from $1.00 or more to 5 cents. Kyrgyz Republic The Kyrgyz Republic in Central Asia started developing a livestock traceability system (Development Program of Livestock) in January 2006, with the aim to complete it by December 2006 (Pers. communication, Y. Abdurasulov). It’s administered by the Ministry of Agriculture, Water Resources and Processing Industry (http://www.mawrpi.kg/). The objective is to create a state-of-the-art mandatory traceability system. It is seen as important for increasing the export of farm products and improving quality. Mexico (this section is produced from personal communication with Peter Wareing, Leatherhead Food International, UK). (Refer also to http://www.proz.com/kudoz/705635). Mexico ’s sanitation service, in conjunction with France’s Institut de l’Elevage, has announced a $25 million joint project aimed at expanding cattle traceability and boosting meat exports to Europe (Food Traceability Report June 2005). Mexico ’s fledgling livestock traceability system, which is managed by the National System for Individual Identification of Cattle (SINIIGA), will soon track a wider range of data throughout the production chain. Traceability data will include date of birth; entry and departure from a herd; date and place of import and export; notification of processing; and Federal Type Inspection (TIF) at the

http://www.maff.go.jp/mud/633.html

http://www.maff.go.jp/

http://www.mawrpi.kg/

http://www.proz.com/kudoz/705635

16

processing plant. All meat tracked by the SINIIGA will be processed at TIF facilities and will bear the Mexico Superior Quality seal. Under its multi-year consulting contract, l’Elevage Institute will seek to speed up the slow rate of growth in Mexico’s livestock traceability system. Participating livestock/meat producers will be eligible for a financial stimulus package in accordance with the operating policies of Mexico’s Stimulus Program for Cattle Productivity. By 2006 the agriculture ministry had acquired 1.5 million individual identification packets, all of which are scheduled to be in use by the end of this year. Participation in the livestock traceability program is already mandatory for Mexican companies that supply meat to the European Union. The level of Mexican meat exports to Europe, however, is low and primarily limited to delicatessen products. If SINIIGA’s expansion results in marked expansion of sales to premium export markets like the EU and Japan, the number of participants is likely to rise proportionately. If not, growth of Mexican cattle traceability is likely to remain sluggish. Mexico has two types of beef: those processed at certified TIF plants, and those that are not. TIF plants have the technology to respond to foreign traceability requirements. The other type of plant supplies to the local market only. An export traceability system is being developed in conjunction with the US. Morocco Morocco is reported by the FAO (http://www.fao.org/es/ESC/en/20953/21014/highlight_108710en.html) to be developing a traceability system to meet EU requirements, but in this study we find no evidence of this. The Ministry of Agriculture and Rural Development is likely to be the administrator if it exists (http://www.madrpm.gov.ma/). Morocco doesn’t seem to be a significant exporter of meat or livestock, which makes the above referenced report even more puzzling. Namibia Namibia is one of the most interesting traceability case studies in the world because of its early adoption of quality and traceability management systems and the Farm Assured Namibian Meat Scheme (FANMEAT), which guarantees certain animal welfare and veterinary standards (Bowles, Paskin, Gutierrez and Kasterine 2005). FANMEAT was initiated as a regulation in 1999 to meet EU requirements for traceability and welfare. Compliance with FANMEAT enables livestock producers (13,000 members) to use the FANMEAT logo. The logo gives customers assurance that any meat product with this logo is safe, healthy and compliant with animal welfare standards, as well as being traceable (visual ear tags and branding are used). As a developing country Namibia is a leader in traceability systems that not only meet human health concerns but also user concerns about animal welfare. That it has managed to implement a recognized traceability system that meets EU requirements suggests traceability systems can be developed by countries with fewer resources. Bowles et.al. report, however, that members of FANMEAT do not receive a price premium for their supplies and actually incur additional costs associated with identification and record keeping of animal movements and the higher standards for on-farm hygiene and animal welfare. The benefits are seen to be in the form of cost savings through healthier stock and fewer thefts from tagging. Livestock production is an important sector of the Namibian economy (it employs 70% of the country’s population and earns 11% of its GDP) and it is accompanied by a rapidly growing meat and fish processing sector. About 80% of beef production (55,000 tones) is exported from a stock of 2.5 million cattle (Perry, Pratt, Sones and Stevens (2005). The beef industry is regulated by the government-owned and privately financed Meat Board of Namibia, which links the industry with its customers and is responsible for the development of the industry and its health and welfare standards. Namibia is now the largest exporter of beef from Africa to the UK and an important supplier to the EU.

http://www.fao.org/es/ESC/en/20953/21014/highlight_108710en.html

http://www.madrpm.gov.ma/

17

New Zealand New Zealand has two broad identification systems in place for cattle. The Livestock Improvement scheme has 97% of the NZ dairy herd catalogued. The mandatory NZ cattle and deer identification system commenced operation in 1998 for the purpose of improved control of Tuberculosis, administered by the NZ Animal Health Board (http://www.ahb.org.nz/AHBWebsite ), but it does not have what would be called a traceability function. The Biosecurity (National Bovine Tuberculosis Pest Management Strategy) Order 1998 is the legislation that underpins the National Pest Management Strategy for Bovine Tuberculosis (NPMS). The Biosecurity Division at the Ministry of Agriculture and Forestry (http://www.biosecurity.govt.nz/about) is responsible for administration of the regulations. The animal health board of New Zealand runs the National Identification Program for beef and deer. It’s anticipated the identification scheme will be expanded to sheep, goats and pigs in future. Allflex and ZeeTags provide visual tags for the identification system. The Animal Identification and Traceability Working Group (AITWG) was established in August 2004 to consider domestic and international trends in animal identification and traceability, and propose a way forward to enhance New Zealand's existing systems (http://www.maf.govt.nz/mafnet/animal-identification-and-tracing.htm). The membership of the AITWG includes: ▪ Dairy InSight ▪ Deer Industry New Zealand ▪ Federated Farmers of New Zealand (Inc) ▪ Fonterra Co-operative Group Ltd ▪ Meat and Wool New Zealand ▪ Meat Industry Association of New Zealand (Inc) ▪ Ministry of Agriculture and Forestry ▪ New Zealand Food Safety Authority In July 2005, the AITWG distributed a report which proposed an enhanced animal identification and traceability system (with an initial focus on cattle and deer). Major changes would include:

● migration of existing animal identification for cattle and deer onto a single unified framework that can be used for a range of agreed purposes

● recording of all movements of cattle and deer to enable trace forward and trace back of individual animals

● establishment of a core database which connects individual animals with properties and people

The AITWG proposed an initial adoption on a voluntary basis, moving to mandatory use by October 2007. While the focus is on cattle and deer (which already have compulsory animal identification for the national bovine tuberculosis pest management strategy), the aim is to provide an infrastructure suitable for other livestock industries to consider and adopt as appropriate.

Submissions on the AITWG report closed on 30 September 2005. The industry has agreed in principle to the changes though its understood the time-line has been extended beyond 2007. Work has now commenced on developing a project plan that will cover all the elements of the new system.

http://www.ahb.org.nz/AHBWebsite

http://www.biosecurity.govt.nz/about

http://www.maf.govt.nz/mafnet/animal-identification-and-tracing.htm

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Norway Norway introduced traceability for tagging, recording and reporting of cattle movements in 1998 (FOR-1998-12-31-1484). After 2005 all regulations follow the EU’s ‘common food law’. The traceability system is administered by the Ministry of Agriculture. The mandator systems apply to pigs, sheep and goats, with poultry and fish in the regulatory pipeline. The numbering standards follow the EU guidelines. There are subsidies for producers, perhaps as high as 30% of tags. SKRETTING in Norway (http://www.skretting.no/), the world’s largest manufacturer of feed for the fish farming industry, has built what could be one of the most advanced traceability systems, using Trace Tracker technology (http://www.tracetracker.com/). Skretting has built an internal traceability platform, enabling the company to trace any customer order all the way back to the raw materials, and the other way around from raw materials to the finished feed delivered to their customers. The platform also provides Skretting's customers with online quality documentation and that is seen by customers as a valuable demonstration of traceability. Skretting is one of the participants in Norway’s TELOP-TRACE project, funded by the Research Council of Norway (http://www.forskningsradet.no), and which is the first full-scale implementation project for an online, decentralized exchange of traceability information between independent players, also called the Global Traceability Network (GTN). The backbone technology used in this project is developed by TraceTracker. TraceTracker is now offering GTN connectivity in the market and BASF, an industrial conglomerates, is one of the companies now using TraceTracker's GTN Connector to integrate their SAP-system with the GTN. TraceTracker seems to show that it is able to build a link between independent players in a production chain, which is a breakthrough when it comes to achieving cooperation, full transparency and food safety. This infrastructure facilitates automatic exchange of traceability information between independent players in the supply chain. Paraguay The agriculture ministry established a technical traceability committee to develop the Traceability Regulation System of Paraguay (SITRAP) as an individual livestock traceability system complying with international standards (Food Traceability Report November 2005). For purposes of quality assurance, SITRAP will provide data related to sanitation practices, nutrition, and movement. Initially, the data will support the issuance of certificates of origin for exported livestock and meat products. Ultimately, it will supply information on the origin of feed, medication, and other inputs associated with the product. SITRAP’s greatest weakness is that it will apply only to export producers, yet most of the illicit practices that threaten Paraguay’s sanitation image have been linked to small-scale producers who supply the domestic market. South African Republic South Africa is a net importer of livestock products and also imports large numbers of live animals, especially from Namibia. It also exports some beef, goat, lamb and pork to high valued niche markets. The South African Meat Industry Company (SAMIC), which promotes meat and export market development, also audits premium quality brands and views traceability as an integral part of brand development and integrity. Independent audits of the traceability systems are viewed as essential and a check on fraudulent branding practices. Current brands that are audited and have traceability systems include Woolworth’s “Free Range Meats”, Pick n Pay’s “Country Reared Beef” and the Kalahari Kid Corporation’s “Desert Lamb”. This is an example of how the attributes of traceability systems can be incorporated into brands, lessening the case for mandatory systems and providing an inbuilt mechanism for cost recovery.

http://www.skretting.no/

http://www.tracetracker.com/

http://www.forskningsradet.no/

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Syrian Arab Republic The Syrian Arab Republic appears to not have any traceability system or immediate plans for introducing one. Apart from sheep (15.3m in 2004 (FAO Statistics 2006)) and chickens (30m in 2004) Syria has only small numbers of livestock and few exports (2m live sheep in 2004).

Thailand Export earnings from agricultural products in Thailand are over $US22 billion/year. It is among the largest exporters of rice, shrimps, poultry, natural rubber, cassava and canned tuna. Government policy places heavy emphasis on food security and safety for both national and export customers (http://www.thailandfoodtraceability.com/STATISTICS.html). http://www.modernizethailand.com/conference/260149/data/agriculture/food%20.pdf The existing plan is to establishing a national farmer registration database for important commodities such as shrimp, poultry, fruits etc. This is to be accompanied by an e-certificate solution for movement, health and export of agricultural products comprising: ● Creation of a traceability system in order to support agricultural products exported to major markets such as EU, Japan and the US. ● Use of new identification technologies such as RFID. ● Advice for the Ministry of Agriculture and Cooperatives in managing and utilizing the database effectively. Thailand has already adopted a food traceability mechanism on certain commodities such as shrimp, chicken and vegetables and is planning to extend it nationwide, covering export products. A new traceability project is in progress with the following requirements: a) Establishing databases using advanced technology to plan, control, and implement for the future surveillance system. b) Creating a food traceability system to support exportation that meets the requirements of international markets. c) Capacity building for the government personnel to effectively manage the system. The Thai traceability system is to be applicable to food and agricultural commodities, including crops, livestock and fisheries. It is aiming to have full traceability down to the farm level, including tracing supplies of fertilizer, seeds and other farm inputs. The proposed Thai traceability system is expected to meet the following minimum criteria:

Technologies • Advanced e.g., Radio Frequency Identification (RFID) • Facilities for the interchange of data. • Multi-language system • Provision of flexible tools without interruption • Provision of a platform or a centralized platform, where necessary • Provision of simple tools to cope with the future changes • Provision of high level of data security and confidential

Compatibility • Compliance with international standards • Capability to communicate among other government databases. • Conformity to international data format • Capability to integrate with the third parties software (ERP/ MRP)

Effectiveness with capability • to trace or retrieve information down to farm level • to trace back (up and down) and recall at any point • to link among entities

http://www.thailandfoodtraceability.com/STATISTICS.html

http://www.modernizethailand.com/conference/260149/data/agriculture/food .pdf

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The ultimate goal of the Thai traceability system is to ensure worldwide acceptance of high quality safe food through their branded traceability system involving a combination of leading brands and technologies: ● “Q” Brand being recognized internationally as the symbol of safety and quality of each entity in the Thai food supply chain. ● “Kitchen of the World” using quality products from Thailand. ● Establishing a database using advanced technology for planning and control, and to be used also as a surveillance system. Thailand has also been active in exploring and developing animal welfare as an added-value attribute for exported poultry products (Bowles et.al.2005). A marketing strategy to export free-range chicken meat from Thailand to the EU is being developed. Tunisia The Tunisia Ministry of Agriculture and Hydraulic Resources (http://www.iresa.agrinet.tn/)is reported by the FAO to have been investigating development of an effective traceability systems, but information is limited. Tunisia has 6.75 million sheep, 750,000 cattle and 1.4 million goats. Exports seem to be negligible.

United Kingdom [http://www.defra.gov.uk/animalh/tracing/index.htm] The UK complies with the EC General Food Law Regulation 178/2002, which is described above under the EU and in detail at the website of the Official Journal of the European Communities: http://europa.eu/eur-lex/pri/en/oj/dat/2002/l_031/l_03120020201en00010024.pdf. The UK national regulations extend across cattle, horses, sheep, goats, deer and pigs, with varying levels of requirements across identification and movements. For example, to ensure traceability is achieved, cattle are required to be correctly identified in accordance with legislation and issued with a corresponding passport (http://www.defra.gov.uk/animalh/tracing/cattle/cattle.htm). Movements must be notified to the British Cattle Movement Service (BCMS) and recorded on a central database (CTS). BCMS is the specialised cattle tracing organisation for Great Britain and is part of the Rural Payments Agency (RPA). RPA is an executive agency of the UK Department of Environment, Food and rural Affairs (DEFRA).

Uruguay Despite plans over several years the individual cattle livestock identification system is still not operating in Uruguay. For beef cattle exports to the EU, group identification is in place and accepted. This is seen, in part, as the cause of delay in starting the individual livestock identification system. The Ministry of Livestock, Agriculture and Fisheries (MGAP) in Uruguay had plans to establish a unique National Livestock Information System (SNIG) in 2002, but it has failed to materialize. The current livestock information system has five key information sub-systems: ● Livestock Movement Control Division (DICOSE), which controls brands and marks, livestock property registrations, cattle stock movements, skins and wool. ● Animal Health Division (DSA), which authorizes auctions and inspections. ● Animal Industry Division (DIA) which is in charge of, among other things, the traceability of animals and animal products within abattoirs. ● Veterinary Laboratory Division (DILAVA), which is responsible for diagnosis, prevention and eradication of animal diseases. ● Geographical Information System (SIG), which plots the distribution of stock holdings and location of animals of interest. There is limited information about immediate plans to implement SNIG for cattle or extend it to other species.

http://www.iresa.agrinet.tn/)is

http://www.defra.gov.uk/animalh/tracing/index.htm

http://europa.eu/eur-lex/pri/en/oj/dat/2002/l_031/l_03120020201en00010024.pdf

http://www.defra.gov.uk/animalh/tracing/cattle/cattle.htm

21

United States of America The US has a long history of action to protect food safety, starting with the Food Hygiene Law passed in Boston in 1773 (Sanders 2006). This was followed by establishment of the USDA’s Bureau of Animal Industry (1884) to control threatening animal imports and the Food and Drug Administration (FDA), which is part of the Department of Health and Human Services. The FDA is responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation. The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate, science based information they need to use medicines and foods to improve their health. The Centre for Food Safety and Applied Nutrition (CFSAN) is one of six FDA centres and develops regulations and guidance for food, food additives and dietary supplements. The FDA is also responsible for developing regulations and administration of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Act), which was signed into law by the U.S. Congress in 2002. In brief this means there are two main regulatory influences by the FDA on the food chain: food safety and food security of food defence as it is sometimes referred to. The basic six steps of a FDA investigation are as follows: ● Surveillance; ● Epidemiological investigation; ● Laboratory analysis; ● Environmental investigation; ● Trace-back and trace-forward. ● Farm investigation. Sanders identified several ways in which industry can help in the conduct of an investigation and they are included at Table 2.1 to improve understanding about the underlying reasons for having an effective traceability system.

TABLE 2.1: Role of Industry in Facilitating Administrative Efficiency in Food Safety Regulations

1. Help from retailers, processors, wholesalers and growers. 2. Provision of supplier lists, customer lists, invoices, labels and ingredients for all products,

process flow chart for all products, written explanation for codes, expiry dates etc. 3. Copies of working process logs. E.g. monitoring logs, employee absence records,

environmental results, consumer complaints, product recalls etc. 4. For each days production a record of the location of properties, fields/paddocks, feeds and

chemicals used, method of paddock fertilization, harvesting crews, packing/yarding, trucking, cooler rooms used,

5. Cooperation with investigators and making records available. Working with the FDA to complete the safety and security of the livestock-food supply chain is the US Department of Agriculture (USDA) (Farms are exempt from FDA registration and record keeping). ‘As part of its ongoing efforts to safeguard U.S. animal health, USDA initiated the implementation of the National Animal Identification System (NAIS) in 2004 (http://animalid.aphis.usda.gov/nais/index.shtml). NAIS is a cooperative State-Federal-industry partnership to standardize and expand animal identification programs and practices to all livestock species and poultry. NAIS is being developed through the integration of three components—premises identification, animal identification, and animal tracking. The long-term goal of the NAIS is to provide animal health officials with the capability to identify all livestock and premises that have had direct contact with a disease of concern within 48 hours after discovery.

http://animalid.aphis.usda.gov/nais/index.shtml

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NAIS is currently a voluntary program. To ensure that the participation requirements of NAIS not only provide the results necessary to maintain the health of the national herd but also is a program that is practical for producers and all others involved in production, USDA has adopted a phased-in approach to implementation. Although the draft strategic plan references mandatory requirements in 2008 and beyond, to date no actions have been initiated by USDA to develop regulations to require participation in NAIS. The USDA’s Animal and Plant Health Inspection Service (APHIS) will publish updates to the implementation plan as recommendations are received and evaluated by the NAIS Subcommittee and the Secretary's Advisory Committee on Foreign Animal and Poultry Disease. The initial focus of NAIS is on cattle and pigs, which use ear tags for identification. The Animal Identification Number (AIN) is planned to be expanded later (no time schedule) to other species, which may use other forms of identification. Performance standards for AIN tags and RFID-AIN tags are contained in the document entitled Administration of ‘Official Identification Devices with the Animal Identification Number’ available at http://www.aphis.usda.gov/nais. In contrast to NLIS the ‘…USDA’s objective … is to support the privatization of the animal tracking information component for NAIS in the most practical, timely, and least burdensome manner possible. USDA received numerous questions and comments on the potential for there to be several different animal tracking databases. Based on that feedback, USDA is establishing a “portal” system, referred to as the Animal Trace Processing System (ATPS), to support the integration of multiple animal tracking databases within the NAIS… To facilitate the integration of private and State animal tracking databases, APHIS has established an interim/development phase. APHIS will enter into an Interim Cooperative Agreement (ICA) with organizations that have databases that meet the requirements of the ATD and that wish to participate in the advancement of the private and State ATDs with the NAIS. Through this cooperative approach, APHIS will work with stakeholders throughout 2006 to develop the complete requirements for the integration of private and State animal tracking databases with the NAIS. Producers may participate in this industry-administered component as organizations with animal tracking databases enter into the Cooperative Agreements with APHIS. It is anticipated that the requirements for compliance will be completed by late 2006, and the actual integration of such systems with the ATPS is targeted for early 2007…’ At the time (June 2006) of writing this report the US House of Representatives blocked and placed conditions on NAIS expenditure in 2007 of $US33 million due to concerns about costs and privacy breaches (http://www.foodtraceabilityreport.com/ejournals/articles/demo_article.asp?id=93818). This looks certain to delay implementation. Elsewhere in the US there is mounting opposition to NAIS on the grounds of privacy law breaches, freedom to operate, protection of traditional rights to farm, religious concerns and various other reasons. (refer, for example to Arkansas Animal Producers (http://arkansasanimalproducers.8k.com/) and No NAIS (http://www.nonais.org/).

Vietnam Vietnam is currently affected by Foot-and-Mouth and avian flu (http://www.alertnet.org/thenews/newsdesk/HAN81663.htm), prompting criticism (http://news.xinhuanet.com/english/2006-05/12/content_4536174.htm) of the Ministry of Agriculture and Rural Development (http://www.agroviet.gov.vn/en/default.asp) and stimulating interest in more effective and reliable livestock traceability systems. In the early 1990s Vietnam was exporting over 1,000 tonnes/year of chicken meat, compared to 5 tonnes in 2004. Advanced ID Corporation (http://www.advancedidcorp.com/agriculture.html) is reported to be conducting trials in Vietnam of its DataTRAC™ UHF RFID visual ear tags for fish, via the Technical Materials & Resources Import-Export Co. REXCO HANOI Branch, a government agency in Hanoi, Vietnam (http://www.marketwire.com/mw/release_html_b1?release_id=129776). The UHF speed is claimed to have potential advantages (including range and cost) over the low frequency tag of 134 kilohertz, which is the NLIS standard, though questions of reliability remain (see below).

http://www.aphis.usda.gov/nais

http://www.foodtraceabilityreport.com/ejournals/articles/demo_article.asp?id=93818

http://arkansasanimalproducers.8k.com/

http://www.nonais.org/

http://www.alertnet.org/thenews/newsdesk/HAN81663.htm

http://news.xinhuanet.com/english/2006-05/12/content_4536174.htm

http://www.agroviet.gov.vn/en/default.asp

http://www.advancedidcorp.com/agriculture.html

http://www.marketwire.com/mw/release_html_b1?release_id=129776

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2.2 Animal Species Covered The commercial animal species covered by livestock traceability systems include cattle, buffalo, deer, fish, goats, pigs, poultry, ratites and sheep. Beyond this there is also coverage of wildlife for conservation and research purposes and domestic animals, including dogs, cats and others, where tag costs are less of a constraint to adoption. There are no obvious technological limits to attaching or inserting an identification device to any animal. Biomark (http://www.biomark.com/) indicates it has applied RFID tags to, among other things, fish, kangaroos, rabbits, turkeys, turtles, bats, birds, deer, elk, foxes, possums, horses, quail, turtles, wolves, bears, beavers, bison, camels, frogs, squirrels, quail, rattle snakes, rats and mice.

2.3 Objectives of Traceability Systems According to Golan Krissoff and Kuchler (2005) firms have three primary objectives in developing and using traceability systems: ● To improve supply chain management; ● To facilitate trace-back for food safety and quality; and ● To differentiate and market foods with subtle or undetectable quality attributes. The benefits associated with these objectives are seen to include lower cost distribution systems, reduced recall expenses, and expanded sales of products with attributes that are difficult to discern. In every case, the benefits of traceability are expected to translate into larger net revenues for the firm. These expected benefits are driving the widespread development of traceability systems across the U.S. food supply chain. Nevertheless, there are still many questions about the distribution of costs and benefits along the supply chain. Retailers seem keen to see suppliers adopt advanced traceability systems, but less enthusiastic about paying them higher prices for cost recovery. The NAIS also aims to guard against intentional and unintentional bio-security threats to the food supply chain, though this may be interpreted as a strategy for enhancing food safety and quality. In Canada, the CLIA has the objectives of containment and elimination of reportable foreign animal diseases; maximization of food safety; and distribution of quality food. CLIA goes one step further than most other countries in stating that ‘… no one animal species shall put another species at risk.’ In Australia, the NLIS and most other country traceability systems have similar objectives. Animal Health Australia (2003) see the benefits in terms of improved control of animal diseases; improved responsiveness (decreased time and increased data accuracy) to emergency outbreaks of diseases; improved laboratory information systems (automated sample identification and processing); and increased ability to differentiate animals and their products on health grounds. The Australian New Zealand Food Regulation Ministerial Council (ANZFRMC) endorsed, in a review of Food Standards Australian New Zealand (FSANZ), the objective of food regulation being to protect public health, but also emphasised the importance of processes for developing food standards to be efficient and to minimise the regulatory burden on the food industry (ANZFRMC 2005). The objective of the EC General Food Law Regulation 178/2002 is to protect human health and consumer’s interest in relation to food. It applies to all stages of production, processing and distribution of food and feed, except for primary production for private domestic use, and the domestic preparation, handling, or storage of food for private domestic consumption. The inclusion of animal feeds (Article 4) is seen as a more important product to be traced than is the case with regulations in most other countries. The inclusion of feed in the Regulation and the way in which it is interpreted and monitored is an item that should be monitored closely by suppliers from other countries. For exporting countries market access takes on added importance and in many countries there are more stringent requirements for traceability systems for exported livestock and meat products.

http://www.biomark.com/

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2.4 Functionality The design and development of an effective traceability system presents many challenges for institutional design, administrators, regulators, standards, system and software developers, funding managers, industry and herd associations and farms, processors and retailers. Neglect of any particular component can lead to disagreement, stop development or lead to problems with effectiveness, performance and compliance. At its most basic level a traceability system needs to be capable of identifying, within a short period of time (often set at 48 hours) all animals and animal sites exposed to a disease outbreak. This raises questions about the collection, storage and ownership of the database which is fundamental to enabling a quick response. The US, in particular, has spent a lot of time investigating this issue due to concerns about ownership of the data and possible abuse of the data for purposes other than disease control. At the time of writing this report many of these issue remain unresolved in the US. The functionality of traceability systems are described generally around three broad requirements: ● Administrative and Organizational Functions; ● Data Capture and Contributions; and ● Use of data for investigations, reports and analysis. In Australia the NLIS takes a relatively centralised approach for delivering functionality. All data on NLIS devices flows through the NLIS database and all cattle being moved must have a NLIS approved device. The NLIS mandate extends only to the abattoir or point of export for live stock. Diagram 2.1 shows the data flows in the NLIS system.

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Cattle BreederProducer

Stock?

To ShippingDistributor

Not Available

Diagram 2.1: NLIS Data Flows

CattlePost-Breeder

Producer

Property Identifier:-Agricultural Department

-Rural Land ProtectionBoard

-Department PrimaryIndustries

DeviceRetailer

Order form

DeviceManufacturer

Order form

Device delivery

White tagOrange tag

Market decision

Saleyard

FeedlotPROCESSOR

NLIS Primary Database

Agents

RelocationAgistment,lease, other

property

Reader

Reader

HerdManagement

Software

Backup

Register

Beyond NILS

Slaughter Boning Packaging

48 hr notice of stock movements

Veterinary-AnimalHealth

CONSUMER

Low frequency RFID 134.2kHz; HDX

2.4.1 Administrative and Organization Functions The traceability systems in most countries have these basic five features or plan to have them: ▪ A premise/farm/property identification number or code. ▪ An individual or group number for the animal and its associated property ID.

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▪ An identified approved tag or device containing the numbers and tag manufacturers. ▪ A number of registers for tag manufacturers, PICs and animal numbers, stakeholder accounts and accredited certification agencies and entities. ▪ A database for registering properties and stock. When one or more of these features is absent there would be doubts about whether the system satisfies the definition of being a traceability system, namely, ‘…the ability for the retrieval of the history and use or location of an article or an activity through a registered identification system.’ (Refer to ISO 8402 above). Many countries have traceability systems for exports only, but this raises serious questions about the effectiveness of the segmentation of exported viz. domestic livestock. If data cannot be retrieved from animals used in the domestic market then this seems to compromise the efficacy of the export system. 2.4.2 Data Capture and Data Contribution Functions The basic features required of the data capture and data contribution process depend on the objectives of the system. If the system is being set up for the sole purpose of animal and human health traceability then the acquisition of data would be based on facilitating quick response to a disease event. This type of system typically requires at least: ▪ From the accredited agency (either manually or using a RFID reader and storage system) the following data: ○ PIC situation and changes in it; ○ Tag issue inventory from manufacturers; ○ Animal ID or group ID changes in location, movements etc. ○ Classification status: dead, alive; ○ Notice of faults: loss, failure, destruction. ▪ Administrative information – PIC location and changes. ▪ Carcass and meat inspection feedback from processors. ▪ Generation of reports and capacity to make inquiries. When the system for data capture and contributions fails to deliver one or more of these features then, again, there would be doubts about whether it satisfies the definition of being a traceability system. 2.4.3 Use of data for investigations, reports and analysis Again, if the system is being set up for the sole purpose of animal and human health traceability then the use of data would be based on facilitating quick response to a disease event and not much more. Inquiries and reports would typically require the following: ▪ Livestock origin and movements records, individually or in groups; ▪ Carcass and meat inspection feedback records; ▪ Historical records including audit trails; ▪ Compliance failure records; and ▪ Security safeguard records. Most traceability systems seem to feature most of these requirements, but then fall away on security safeguards of records for purpose of dealing with privacy concerns. Pape et.al. (2004) suggested setting up a traceability system similar to the bank credit card system. In this system the first port of call for the data would not necessarily be a centralised database, but could be an intermediate data trustee, which would be a private, third party intermediary between producers and processors, accredited certifying agencies (could be a breed society or industry), and government authorities.

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The data trustee would act like an escrow agent, holding captured data until a legitimate animal health investigation was made and approved. This system would contain five steps:

i.) Producer/processor inputs data into their computer; ii.) These data are linked to a data trustee, perhaps an accredited, certifying agent; iii.) Mandatory data (PIC and animal ID) required for animal health control are sent

to the government’s central database. iv.) Government officials detect an animal health incident and request more

information from the data trustee. v.) Data trustee confirms authenticity and distributes further information to the

officials. Under this system producers and processors may still send data direct to the Centralised database, but they would also have the option of sending it to a data trustee warehouse. Diagram 2.1 shows the layout of this proposed database architecture, as we understand it.

National ID Database

Network Cable

Network Server Certified Data Trustee's Servers

Modem Producers and Processor's Home/Business PCs

ModemAgent's Home/Business PCs

Modem

Diagram 2.1: Traceability Architecture Toolbox (Derived from Pape et.al.Health Officials PCs

2.5 Devices and Technology Devices are used to identify and track livestock births, deaths and movements and can be read electronically by an approved reader. An NLIS approved device can be in the form of an electronic ear tag or rumen bolus/visual ear tag combination. In the US APHIS is planning to make it optional to have different devices for storing the AIN data. This could be an RFID tag or bolus and could contain various levels of information other than the PIC and animal identity. Performance standards issued for AIN tags include, but are not limited to, the following. • The tag must be designed for one-time use and be tamper proof. • The printing on the tag may not readily be altered and should include the 15-digit AIN and U.S. shield. • The AIN number must be readable at a distance of 30 inches. • The tag must function and remain affixed to the animal for the expected lifetime of the animal. • On average, not more than 1 percent of tags applied may be lost in the years following application.

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For bison and cattle, APHIS supports the integration of radio frequency identification with the eartag. In Australia, an approved NLIS device has two numbers associated with it: ▪ The NLIS number (visual number) is printed on the electronic ear tag or on the management ear tag matching an NLIS rumen bolus. The NLIS ID indicates the property where the animal was identified and whether that was the property of birth or not. It also identifies the manufacturer of the device, the year of manufacture, whether it is an electronic ear tag or rumen bolus, and an individual animal identification number. ▪ The RFID (Radio Frequency Identification Device) number is also referred to as the electronic number and is the number scanned by a reader. These two numbers are unique for each device and are linked in the NLIS database. The Standards Committee of NLIS sets the requirements for NLIS tags which, at present, have the following features: ● Passive tags (no batteries), requiring activation by an approved reader. The tags (based on Texas Instrument technology (http://www.ti.com/rfid/docs/applications/animal/livestock.shtml) contain an antenna made of coiled copper wire that is connected to the electronic microchip (comprising an integrated circuit and capacitor attached to the two ends of the coil copper wire) which contains the unique numbers. The approved reader, when activated, generates an alternating electromagnetic field. The electronic microchip is activated and data transmitted to the reader when the tag transponder enters the field range. ● Tags adopted by NLIS are based on HDX technology (one way at a time signal transmission) and readers have to be able to read only HDX transponders, though the standard accepts full duplex (FDX – two way a time transmission). ● The reader uses a low radio frequency of 134.2 kHz. ● The range between the tag and reader is about 35 cms. ● Meets ISO Standard 11784 and 11785. ● Tags are tamper proof. In Canada the RFID device requirements are similar to those adopted by NLIS, except in Canada the HDX and FDX technology is accepted and all RFID readers must be capable of reading both HDX and FDX transponders. (http://www.canadaid.ca/About/CCIA_Standards0804.pdf) Although most livestock traceability systems are based on the low frequency of 134-135 kHz there is continued examination into the use of High Frequency (13.56 MHz) transponders. Infineon Technologies (www.infineon.com) , a producer of integrated circuit identification and security products, has developed what it calls ‘my-d’, a high frequency transponder with capacity to write and store supplementary data at low cost (indicated to be $US0.30/transponder for low volumes). This would translate into an overall tag cost of less than $A2.00, compared to the current NLIS tag cost of over $4.00. 2.6 Regulatory Support: Now and Planned The regulatory support for adoption comprises across most countries a combination of mandatory and voluntary measures. While mandatory traceability schemes can no doubt lead to fast adoption and compliance this approach also runs the risk of being based on high cost and obsolete technology, a typical side-effect of reduced competition. An example of the negative impact of mandatory traceability systems on costs can be seen from this comment by Schmitt (2006) in discussing the adoption of a NLIS type system for wool bales: ‘…A factor that should not be overlooked … is that tagging/tracking is a legislated requirement. This will not be the case with wool and, as such, the proving of the benefits and the model to apportion

http://www.ti.com/rfid/docs/applications/animal/livestock.shtml

http://www.canadaid.ca/About/CCIA_Standards0804.pdf

http://www.infineon.com/

29

these benefits will be a critical part of the trial and implementation. There will be little comfort to growers from a “feel good” factor should wool pack prices increase and there is no compensation in wool prices or handling fees…’ Some countries like the US, Brazil and Canada are moving towards mandatory adoption, but leaving more options for different technologies to be used and different databases to be preserved. This opens the door to new and low cost devices, which are already emerging (e.g. High Frequency transponders). Regulations also have impact on the choice of frequency for RFID. For example with Ultra High Frequency (UHF) there are neither uniform global regulations on frequency nor even the presence of any regulations in all countries. An overview of the UHF regulations prevailing across different countries can be viewed at the following Electronic Product Code (EPC) Global site: http://www.epcglobalinc.org/standards_technology/UHF_RFID_Regulations_%2020050720.pdf. While UHF is not being used in livestock it has been recommended by Schmitt for wool bale identification and Wal-Mart in the US is adopting it for pallet, case and products. 2.7 Institutional and Supply Chain Structures and Linkages There is a large variety of enterprise, industry and government organisational relationships involved in the different traceability systems. As discussed earlier traceability systems are essentially just one component, albeit a critical one, in the creation of an effective supply chain. And RFID is a technology that can enable traceability systems to enhance supply chain performance. One of the challenges in designing effective traceability systems is to not lose sight of the ultimate objective of improving supply chain efficiency in meeting the dual aims of animal health and human health security as well as commercial operator’s need to make a profit from the supply chain. It’s easy to be distracted by the technological change happening with RFID and notions that without an RFID driven traceability system then everyone in the food industry is destined to become either a threat to society or irrelevant to the demands of a modern consumer society. In examining the traceability systems of different countries it’s not that evident they are driven by well considered supply chain management strategies. Almost all are driven by fear about losing export markets and/or technology fundamentalists who are mainly interested in selling more RFID tags, irrespective of the costs and benefits for different supply chain activities and operators. Exemptions exist for certain markets (e.g. domestic consumption), with little thought for the difficulty of securing segmented borders; many animal species are not covered by traceability systems; and regulations are often used as a blunt instrument to achieve a single objective, irrespective of the side effects on competition different technologies and brands. Canada has potential to deliver the most comprehensively integrated traceability system. As noted above, CLIA's vision is to establish an animal tracking system that will cover all species and be integrated with all commercial supply chain operations, from feed to consumer. A number of countries have had discussions about a genuinely comprehensive and integrated system, but none have made as much progress as Canada, at least at a policy level. Even in Canada questions are being asked about the speed of their responsiveness to the 2006 BSE outbreak. Of 148 animals investigated by the Canadian Food Inspection Agency over 50% are reported to have either died or been slaughtered by the time they were found; 22% were untraceable; and 10% had been exported (http://www.inspection.gc.ca/english/anima/heasan/disemala/bseesb/eval2005/evale.shtml.) Hartmen (2004) identified a number of factors that are driving the adoption of RFID technology and its ability to uniquely identify each item in the supply chain and securely capture data without line of site. An important issue here in the context of this study is how well traceability systems keep sight of all of these benefits and do not become distracted by just meeting one or two that help satisfy a regulation or two.

http://www.epcglobalinc.org/standards_technology/UHF_RFID_Regulations_ 20050720.pdf

http://www.inspection.gc.ca/english/anima/heasan/disemala/bseesb/eval2005/evale.shtml

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Table 2.2 lists these market drivers of RFID adoption.

TABLE 2.2: MARKET DRIVERS OF RFID ADOPTION Driver Livestock traceability system alignment 1. Insight, visibility and efficiency at any

point in the supply chain Exemptions, which exist at different levels in all countries, undermine the benefits of this characteristic. Visual devices used in many countries don’t provide this characteristic. No traceability system extends from feed to consumer. That is, they just cover part of the supply chain, usually from farm to abattoir.

2. Accountability and brand protection. It’s estimated that 6-10% of US retail inventory is stolen or diverted. In Australia in 2003 it was estimated cattle stock thefts amounted to $49m. (ABC 2003), which is equivalent to about 0.8% of cattle industry sales.

Same comment on exemptions applies. One of the problems with mandatory interventions is that they have potential to erode private brand equity that may have been based on commercial RFID adoption. This factor is not considered in depth with many traceability systems.

3. Product (including livestock) safety recalls and regulatory requirements met.

This is the main claim of all livestock traceability systems, but it again breaks down with exemptions and lack of compliance. The Canadian BSE experience poses questions for every country.

4. Advantages over bar codes include: ▪ simultaneous identification of more than one item as it passes reader; ▪ can be read without line of site. ▪ RFID can store large volume of data ▪ Read/write capability ▪ Durability across dirty conditions. ▪ Difficult to replicate

The low frequency HDX tags used in many livestock traceability systems are read only, which means new information cannot be written on them and they are not carrying all the management and historical information that may be useful and valuable to stakeholders.

5. Read reliability is relatively high. Traceability systems with RFID technology tend to show high reliability though research in Canada shows the speed at which animals pass the readers; the width of laneways; and number of laneways affects reliability of readers.

6. Read distance flexibility. Again, the low frequency devices have limitations, a problem with mandatory systems.

2.8 Compliance Experience, Costs and Benefits As discussed above the compliance experience with mandatory schemes is expected to be high, but it may not be if penalties are low, enforcement practices weak and stakeholders fail to realize benefits. This raises questions about the efficacy of high cost and inefficient mandatory traceability systems. Unless these systems generate material supply chain benefits there will almost certainly be increasing compliance problems.

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2.9 Education and Training Education and training is a major component in the development and adoption of traceability systems. Consistent interpretation of rules and application of traceability procedures requires a high level of awareness about the reasons activities are being done and educated operators at every level. NLIS in Australia have had country-wide training programs for producers, sale-yard operators, feedlots, agents and processors. These included a series of workshops on NLIS for producers covering, among other things: ▪ Identified members of the Government-industry partnership (e.g. Safemeat to AQIS and MLA) ▪ What is NILS? ▪ Why have livestock traceability? ▪ The RFID numbering standards. ▪ Description of the current system. ▪ Implementation timeline and compliance deadlines. ▪ Livestock class exemptions and variations. ▪ Herd requirements. ▪ Costs ▪ Manual transfers of small numbers. ▪ Application form to create a NLIS Database user account. ▪ Access Authority Form to give authority to a third party to transfer cattle on behalf of a primary owner. A Technical Service training program was/is provided for abattoirs, feedlot and sale-yard operators, as well as for government advisory officers to facilitate farm adoption. Apart from the NLIS training programs there are more specialised training programs offered by providers of devices, software and systems and components like weighing scales. For example, Livestock Recording Australia (http://www.livestockrecording.com.au/html/aboutus.shtml) offers training through field demonstrations and hardware help sessions for their herd management software. Most countries with advanced traceability systems offer the same education and training courses as NLIS. There are many specialised providers. AgInfoLink in Colorado provides a Meat Inventory Tracking System (MITS) and provides technical support for it. There are some areas where education and training gaps exist. The US Computing Industry Association reports that 80% of its members consider there are insufficient numbers of professionals skilled in RFID to hire from (www.comptia.org). Leatherhead Food International (www.lfra.co.uk) provides specialist training in food safety and regulatory requirements for traceability in the EU. 2.10 Integration of Knowledge Management Strategies The integration of commercial supply chain traceability requirements with animal health requirements is an area requiring more development.

http://www.livestockrecording.com.au/html/aboutus.shtml

http://www.comptia.org/

http://www.lfra.co.uk/

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3. Devices Used in Traceability Systems As indicated there is a long history of traceability devices on livestock being used including branding of livestock, ear marks, tattoos, paint marks and neck chains, plastic and metallic tags, tail tags, freeze brands and others. These devices are still used in many countries and for different specialised purposes (e.g. tattoos, for securing identity of a valuable animal). For today’s commercial traceability system the following device and system options would be examined as set up options with choice affected by costs and resources available: Device Options ● Visual devices ● Bar codes ● RFID ● DNA ● Biometrics Systems Options ● Paper based ● Electronic based 3.1 Paper based Systems In many Developing Countries the visual device and paper based system is used because it can involve low costs and labour costs for entry of data are typically low. Many advanced traceability systems also have some unavoidable paper based components (e.g. trucking waybills; notification of deaths). It may also be appropriate for small operations, but as soon as the number of records to be kept and entries required to be made starts to climb so do the costs. Depending upon the nature of the animal species templates for the following records may be kept to meet the requirements of a traceability audit: i.) Birth date ii.) Breeding and other stock on hand iii.) Purchase, replacement and receivals iv.) Sales v.) Production vi.) Feed purchase and use records vii.) Chemical and veterinary purchases and use viii.) Property lay-out maps ix.) Deaths x.) Health and ownership status of stock The main problem with paper based systems is that they don’t usually facilitate quick response to an investigation. While it is possible to have extremely well organized filing systems, as soon as there is a need to cross-reference an entry, time delays occur, costs rise and potentially, the risks of a disease increase. Time delays may, in turn, be outside the requirements of regulations in destination countries/markets or buyers in the supply chain. Moreover, even when they are well organized, paper-based traceability systems may create a perception among investigators that the system is obsolete and risky. Perceptions are almost as important as reality in the traceability industry. Paper based records are also potentially more exposed to interference and disappearance.

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Nevertheless, one advantage of a paper based system is that the templates on which they are typically based can be used as the base for an electronic system. These templates often provide a good picture of the physical supply chain and practical details about activities and sequences that can easily be overlooked when an electronic system is designed by an external expert or even a staff person not operating in the main supply chain. 3.2 Electronic Systems The Internet, and its associated computers, browsers and database capabilities, enhances significantly the capacity and responsiveness of traceability systems. It also adds the capacity to fully integrate traceability systems into farm management and overall supply chain management systems creating the potential for everyone in the supply chain to realize benefits from traceability systems. The analytical capacity of computers is such that as soon as a health risk event occurs with an animal all the stock likely to have been associated with that animal can be identified immediately for isolation if required. Moreover, the electronic system creates a perception among regulators and users that the supply chain and traceability system is extremely efficient and highly responsive to consumer needs. Nevertheless, there are disadvantages with costs (many of which are upfront), uniformity of standards and lack of interoperability. That is, the ability of software and hardware on different computers, devices and systems to communicate and share data can be a problem. Furthermore, there is also the problem of becoming attached to obsolete computing, systems and device technology. The most popular example of this (http://en.wikipedia.org/wiki/Moore's_law) is the strategic implications of what became known as Moore’s Law, that is ‘… the doubling of the number of transistors on integrated circuits (a rough measure of computer processing power) every 18 months. At the end of the 1970s, Moore's Law became known as the limit for the number of transistors on the most complex chips. However, it is also common to cite Moore's law to refer to the rapidly continuing advance in computing power per unit cost…’ In this environment decisions to invest in centralised systems and technology that can quickly become outdated and expensive to maintain need to be made with considerable care.

Source: Wikipedia (www.wikipedia.com)

http://en.wikipedia.org/wiki/Moore's_law

http://en.wikipedia.org/wiki/Transistor

http://en.wikipedia.org/wiki/Integrated_circuit

http://www.wikipedia.com/

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3.3 Bar-codes Bar-coding technology is used widely in the food industry, on packaged goods in particular. A bar-code is a machine readable code of numeric or alpha-numeric form (including upper case character variations, through to ASCI sets), presented in a visual format and applied to a surface. The bar-code is typically read by an optical scanner (laser or camera) or barcode reader and interpreted by computer software. With growing use for more and more information to be fixed to the code a range of different options have been developed including: ● single dimension bar-codes, which typically include the individual identification number and other data such as price and use-by-dates; ● two dimensional bar-codes, which take the form of a matrix of cells, rather than bars. This enables more data to be stored. Stacked bar-codes, a mixture of matrix and singles, take the form of multiple rows of single dimension bar-codes. The technology of a linear bar-code is based around the use of binary numbers (1, 0), with the lines and spaces of varying thickness and combinations. The Universal Product Code (UPC) is one of a large number of bar-code languages, which provide a map between messages and bar-codes. These maps are known as symbologies (http://www.barcodeisland.com/symbolgy.phtml). As an example, a bar-code using Code-128 (alphanumeric) to convey the identity Wondu RIRDC Traceability Project WBT-3A would look like the following image. Code 128 is useful for applications where a large amount of data is needed to be encoded in a small space. For further experimentation and variation with different codes click on this web address: http://www.tec-it.com.

If we added further information like the project start and end dates to the bar-code it could look like the following image:

The EAN●UCC numbering system is a global system for uniform coding rules applied to the identification of items, services, logistics, units, assets and locations. The Australian Meat Industry Guidelines for Numbering and Bar coding of Non-retail Trade Items were developed by the Australian Meat Industry and EAN Australia. It has been designed to provide methods and examples for bar-coding of non-retail/trade units (cartons, carcasses, bulk packs etc.) and shipment units (pallets, containers, truckloads etc.). It provides examples and methods for both domestic and export products for the following items: ● Non-retail trade items – carcass and cartons. ● Logistic units – pallets, modules and shipments (containers, truck loads).

http://www.barcodeisland.com/symbolgy.phtml

http://www.tec-it.com/

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The guideline is focused on edible products and does not deal specifically with live animals or non-edible by-products, but it can be applied to non-edible products. The document is available at www.gs1au.org/media/files/info/guidelines/gl_meat.pdf. Bar codes are used widely across just about all industries, from food to cars, clothes and just about anything that has a surface for it to be attached to, including people and livestock, including tail tags. They have even been mounted on bees with a scanner mounted on the end of tube into the hive to track their working habits (http://www.barcoding.com/Information/barcode_history.shtml). The main constraints with barcodes are at the agricultural production level. Barcodes require line-of-site vision to be read; the readability of the code deteriorates over time and with severe weather conditions; and the code is not tamper-proof. Nevertheless, bar codes are widely used beyond the processing stage and likely to continue to be used. They have well developed standards for use and are cost effective. 3.4 RFID RFID is an automated electronic identification system comprising a transponder device for storage and retrieval of data. The transponder can be incorporated into a tag or bolus and attached to a product, machine, container, animal, person or just about any material object requiring identification through the use of radio waves. The microchip tag contains an antenna that communicates with a remote reader, which can be either fixed or mobile. Because the information is communicated via radio waves it is not necessary to have direct line of site vision, which is one of the main disadvantages of bar-codes. The reading range is governed by the radio wave frequency, with low frequency having short range (see more below). Tags are typically classified broadly as either active (having their own power source) or passive (having no internal power source and relying on the reader for a transmission signal). RFID is sometimes referred to as simply an electronic version of a barcode. There are four basic radio frequencies used in RFID tags: ● Low Frequency (LF), operating at 115-134.2 kHz. ● High Frequency (HF), operating at 13.56 MHz ● Ultra High Frequency (UHF), operating at 860-956 MHz ● Microwave (uW), operating at 2.45-5.8 GHz. These different frequencies give rise to different attributes. The LF device has tended to be used more regularly in livestock because these radio waves can travel reliably through water and body tissue and are less affected by metal barriers compared other frequencies. Nevertheless, they have relatively short reading range and high costs. Table 3.1 sets out some of the main properties of these four different frequencies.

http://www.gs1au.org/media/files/info/guidelines/gl_meat.pdf

http://www.barcoding.com/Information/barcode_history.shtml

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TABLE 3.1: RFID FREQUENCY PROPERTIES

Property LF HF UHF uW Frequency 115-134.2

kHz 13.56 MHz 860-956

MHz, 918-926 in Australia, but 868 in EU and 915 in US

2.45-5.8 GHz

Barrier properties

Travels through water & body tissue. Less impact from metal.

Travels through water & body tissue. More impact from metal.

Very sensitive to water and metal, but may be modified to resolve.

Do not work well around water & body tissue. Ok around metal.

Tag reading distance

20 cm to 250 cm

Up to 100 cm Typically 3-45metres

Typically up to 1.0 metre, but 10m possible

Tag size Variable, depending on application and range required

4-6 times LF, but can be embedded in visual tag.

Smaller than HF

Smaller than UHF for equivalent application

Components Passive only, battery drain too large

Predominantly passive, limited use for capturing sensor data

Passive and active. Active Ok for obstructed environments, but problems with metal and water

Active tags with integral battery or passive tags using capacitive, E-field coupling. Passive option also.

Tag Costs High cost. e.g. $4.00/cattle tag

Lower cost than LF. estimated to be less than $2.00/tag for cattle

Cheaper than HF for equivalent application

Higher cost than UHF, but varies with application

Reader Costs

$A900 (wand) to $30,000 (fixed)

$US1,875 http://skyetek.com

$US1,500-$3,000 and falling

n.a. http://www.coltergroup.co.uk

Read/write capability

Read only with NLIS, but read/write available

Read only or Read/write available



Read/write speed

4 bits/second Faster than LF. 40-400 bits/second

Faster than HF

Faster than UHF

http://skyetek.com/

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Read capacity

Typically single product

Multiple product, typically up to 50 transponders together

Multiple products, typically up to 200 transponders at once.

Multiple products

Standards ISO 11784/11785

ISO 15693 ISO/IEC 14443

EPC Gen 2

Main applications

Livestock, automotive security, gas cylinders, vehicle immobilisers, beer barrels etc.

Smart cards, library books, E-tags, DVDs, videos, CDs,

Supply chain and logistics, pallets, cases, film – reusable containers

Supply chain and logistics, E-tags, airline baggage

International use

Large installation base due to legacy systems.

The most widely available and used, due mainly to the adoption of smart cards

Japan does not allow transmissions in this band. Europe allows 868 MHz; US permits operation at 915MHz, at higher power.

Popularity Declining in the overall market, but still growing in certain applications

Most popular frequency in the overall RFID market 2003

Most popular frequency in the overall RFID market in 2004

Growing.

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4. Traceability and International Competitiveness It can be assumed that most business operators in the livestock- food supply chain are interested in identification and traceability systems primarily because of their impact on competitiveness and especially how any particular system will impact on their customers. The benefits are seen to include: ● Improved quality control. ● Improved responsiveness to livestock disease outbreaks or residue incidents. ● Improved responsiveness to other shifts in consumers demand including response to labels indicating traceability to property of origin. ● Compliance with regulations in importing countries, especially countries with high incomes and capacity to pay price premiums. ● Cost advantages from more efficient, automated and integrated systems that can reduce supply chain costs. ● Environmental gains from cost savings. 4.1 Facilitation of trade in safe food products From the review of international traceability systems it appears that the introduction of more stringent regulations on identification and traceability of livestock and food products and variable adoption of traceability systems are likely to lead to more segmented markets. High income countries, with greater pressure from consumers for more rigorous control of food quality and safety, are the main demand drivers. Food and livestock exporters are the main providers, though there are significant differences in capacity to meet the demands for improved food quality and safety in high income markets. It remains to be seen how well the identification and traceability regulations are enforced, though for exporters of any livestock or meat products it would be a high risk strategy to assume enforcement of traceability regulations is or could remain weak. Chart 4.1 shows movements in selected livestock exports from Australia and the World over the last 12 years. Live sheep exports dominate the trade, with cattle a distant second.

Source: FAO Statistics 2006

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,000

1992 1996 2000 2004

Chart 4.1: Exports: Australia: 1992-2004: Live Animals (Head)

Cattle Sheep Goats Pigs Chickens Turkeys Horses Asses

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The global level of exports of live animals (Chart 4.2) is generally trending down for the two main species, sheep and cattle, but for many of the species with smaller numbers there is an upward trend except chickens, ducks and geese where the trade has fallen sharply over the past 18 months due to the avian flu concerns.

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

1992 1996 2000 2004

Chart 4.2: World Exports of Live Animals: 1992-2004 (Head)

Cattle Buffaloes Sheep Goats PigsChickens Ducks Geese Turkeys HorsesAsses Mules Camels Rabbits Beehives

Source: FAO Statistics 2006 Over the past decade there is evidence of growing trade globally in live goats, pigs, camels, rabbits and turkeys. The extent to which growing regulations impact on trade flows of livestock remains to be seen, but it may be more severe than with meat trade. In regard to meat products there is a much stronger upward trend in global exports (growing at 5%/year over the past 12 years) and exports from Australia (1.2%/year growth) (Table 4.1), especially bovine meat. It is these markets where the impact of identification and traceability systems is likely to be felt.

TABLE 4.1: GLOBAL AND AUSTRALIAN MEAT EXPORTS (Mt) AUSTRALIA WORLD 1992 1996 2000 2004 1992 1996 2000 2004Bovine Meat 1,011,406 954,436 1,208,058 1,263,517 6,679,731 6,374,882 7,321,288 8,104,762Ovine Meat 221,210 207,482 300,123 258,651 942,430 872,739 959,238 904,014Poultry Meat 5,866 17,634 20,415 21,450 3,402,982 6,793,326 8,780,037 9,696,708Horse Meat 8,850 5462 3471 2100 143,522 132,247 133,509 149,023Rabbit Meat 1,081 0 1 0 61,231 57,027 56,260 38,515 Total Meat

1,267,782 1,208,30

3 1,598,928 1,628,527 15,643,46520,299,37

5 24,360,76

7 28,410,765Source: FAO Statistics 2006

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The value of total meat exports from Australia was $US4.5billion in 2004, which was equivalent to 7.4% of the global value of meat exports of $US61.1billion. Australia now has a higher share of the global value of meat exports (7.4%) than the volume (5.6%). This is due largely to premiums for Australian beef and indicates the emergence of a price premium for Australian beef which is likely to be due to several factors including what MLA label the ‘…Australian beef image as clean, safe and delicious …’

02468

10

%

1992 1996 2000 2004

Chart 4.3: World Meat Market Shares: Australia: By Quantity and Value: 1992 to 2004

Quantity Share Value Share

Source: FAO Statistics 2006 When meat from different species are examined in detail there is less evidence of price premiums being paid for Australian exports of meat other than beef. The value shares of world markets are less than the quantity shares for poultry generally and duck meat. While there is insufficient data to draw significant conclusions about the role of safe food and traceability systems in generating price premiums the initial evidence suggests a positive international impact may be emerging for the Australian beef industry and its early adoption of NLIS. Nevertheless, it is unlikely that price premiums are due to simply one factor. Equally important would be quality management and food safety and possibly animal welfare (refer to next section). The latest OECD-FAO Outlook report for 2006-15 states: “World agricultural production is projected to expand steadily over the next decade, but at a slower rate than during the previous ten years. Per capita food consumption is increasing with rising incomes and growing trade. Increasing local production and lower costs from more efficient transport and product distribution systems as well as consumption shifts due to urbanisation and dietary changes are factors that add to this evolution in developing countries. In these countries, there is an increased emphasis on livestock products and animal feedstuffs compared to food grains. In the more developed markets, concerns with the availability of food have been replaced by those for food attributes and quality.”

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4.2 Creation of consumer confidence and willingness to pay Although there are potential gains from both costs reductions and revenue improvements it is ultimately the willingness to pay by end consumers that is likely to govern returns to investment in an identification and traceability system. Dickinson and Bailey (2005) examined consumer willingness to pay (WTP) for “farm-to-fork” traceable meat products (ham and beef) in four industrialized countries: US, Canada, UK and Japan. They found that segments of consumers would pay a premium of as much as 7-9% at the retail level for traceability in beef, though associated characteristics (e.g. animal treatment and meat safety) are even more highly valued than traceability alone. The price premium of 7-9% was well above the estimated 1.33% cost (that is, 1.33% increase in retail prices) of implementing and operating the traceability system. Although consumer WTP was estimated to be significantly positive on average there were also significant numbers not prepared to pay any price premium. An estimated 9% of Japanese beef consumers and 48% of Canadian pork consumers were not prepared to pay any premium for traceability alone, but this unwillingness to pay dropped significantly when traceability is combined with the other attributes: humane animal treatments and food safety. Food safety was estimated to be of particular importance. Other factors influencing WTP included age (older age subjects in Japan and Canada expressed a higher WTP price premiums for pork when it was from a traceable production system) and income (Japanese with higher incomes expressed less WTP price premiums across all products). MLA’s Livestock Production Assurance (LPA) is an on-farm food safety certification program designed to help the red meat industry strengthen the food safety systems currently in place. Coupled with NLIS and Hazard Analysis Critical Control Point (HACCP), which is common at the food processing level, the Australian beef supply chain meets many of the requirements identified in the study of WTP by Dickinson and Bailey. These results suggest the presence of distinct market segments for the development of meat products with traceability systems and attached attributes like food safety and humane animal treatment practices. The price premiums vary according to consumer country, animal species, income, age and additional attributes attached to the traceability system. The Dickinson and Bailey research is based on a restricted set of countries and groups within the countries. Further research would be required for countries beyond this group and especially in developing countries where some of the most important market growth exists. 4.3 Traceability as a trade barrier From the evidence described above it is clear that a prime reason for establishing an identification and traceability system is to differentiate the traceable from the non-traceable product for the purpose of achieving a price premium. Almost every advocate of traceability bases it on the benefits of differentiation. In the ordinary course of commerce and trade this is nothing more than good strategy and a common method for gaining a competitive advantage. A potential problem emerges, however, when governments and possibly industries push the differentiation attribute too far, often seeking or aided by mandatory requirements to comply. The World Trade Organization (WTO) has an active program dealing with food safety, animal health, plant health and technical barriers that have impact on trade, either directly or indirectly. The Technical Barriers to Trade (TBT) Agreement, at the WTO, aims ‘… to ensure that regulations, standards, testing and certification procedures do not create unnecessary obstacles… (www.wto.org). The agreement recognizes countries’ rights to adopt the standards they consider appropriate — for example, for human, animal or plant life or health, for the protection of the environment or to meet other consumer interests. Moreover, members are not prevented from taking measures necessary to ensure their standards are met. In order to prevent too much diversity, the agreement encourages countries to use international standards where these are appropriate, but it does not require them to change their levels of protection as a result…’

http://www.wto.org/

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The TBT Agreement states that when members of the WTO develop and institute voluntary and mandatory product standards and when they set procedures to determine if a product meets the standards, they must not discriminate against imported products and must refrain from creating unnecessary obstacles to international trade. The WTO does insist, however, that technical measures must not be more trade restrictive than necessary to fulfil a legitimate objectives, nor be applied in a discriminatory way, nor constitute a disguised restriction on international trade. Adoption of international standards for imports tends to be acceptable to the WTO, but if an international standard is not accepted then the importing country has to demonstrate through a risk assessment and sound scientific method that the international standard does not meet the desired and accepted objective being pursued. Countries have to accept the sanitary or phyto-sanitary measures of other countries as equivalent, even if they differ from their own, so long as the exporting country can demonstrate that its measures achieve the importing country’s objectives. Identification and traceability regulations are likely to present a number of challenges to the international trade environment in the months and years ahead, including: ● adoption of standards that exceed international requirements. The adoption of HACCP by the international food industry is leading to greater harmonization of standards in the food industry, but HACCP does not extend back down the supply chain to traceability systems for production of livestock. Another differences in standards relates to the adoption of Half Duplex (HDX) RFID technology, which NLIS uses, and Full Duplex (FDX), both of which are accepted in the US and Canada. The differences are based on varying views about the capability of readers with dual capability to read both FDX and HDX. ● challenges based on equivalency, when the product or service meets the objective of the importing country. The tendency to have different rules for products destined for export markets and domestic markets may mean, on the basis of the equivalency test, that the requirements for the domestic market will set the limit for imports. ● consistent application of rules. For example, confinement of traceability systems to bovine species with exemptions for other species suggests an inconsistent approach. Problems with consistency may also be raised on the grounds of regional or district variations in rules. More generally, the WTO rules provide some basic protection against using the regulations on identification and traceability as technical barriers to trade, though it seems likely there will be disputes ahead. Developing countries, in particular, are likely to face increasing difficulties in meeting requirements for identification and traceability.

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5. Regulatory Issues It’s generally recognized that the regulatory environment affects significantly the international competitiveness of firms2. A sound framework for evaluating regulatory support policies and instruments is essential if supply chain efficiency is to be improved and consumer and producer interests preserved through a traceability system. There is probably nothing more inefficient than an ill-conceived regulation because, unlike bad business practices and policies, bad regulations affect every business, not just one or two, and can stay around for a long time, wreaking havoc on everything and everyone in what might otherwise be a very efficient, privately run supply chain. It should therefore be made very difficult to gain acceptance for a mandatory traceability system because the social costs of an inefficient intervention may exceed the benefits by a large number and for a long time. From the outset there is a need for caution about interventions based on populist comments like “… 80% of the industry is in favour …” For one thing, is this the 80% that accounts for 20% of production? And second, what is the cost of this intervention to consumers? There are four primary causes of market failure: ● The presence of public good characteristics in the service; ● The presence of externalities. ● The presence of moral hazard problems. ● The presence of economies of scale.

Chart 5.1: Potential Sources of Market Failure

3. Moral Hazard

4. Economies of scale

1. Non-rival and non-exclusion

2. Externalities

The existence of market failure is a necessary, but not sufficient condition for government intervention. The second requirement is to establish that the net present value of the intervention or regulation to overcome a market failure is positive and better than doing nothing, better than voluntary interventions and improvement of existing arrangements, including enforcement of compliance with existing regulations like food safety and labelling laws.

i.) The public good characteristics of traceability systems seem, at first glance, to be very limited

because it is easy to exclude (what’s known to economists as the exclusion principle) those who don’t pay the price of participation. For example, it could be voluntary for livestock producers to attach an

2 The International Finance Corporation and World Bank produce an annual report on Doing Business. While Australia ranks relatively high in 2006 (rank of 6 out of 155 countries) its performance is not so good on some components that make up the index. For example, it ranks 34 on the ease of registering a business (because of cumbersome paperwork involved) and 12 in dealing with licenses.

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RFID tag to their stock. Those who pay the fee for the tag gain access to the supply chain with assumed price premium benefits and those who don’t pay the fee enter their stock into a standard supply chain. In addition, the traceability service tends to exhibit what’s known as rivalry3. Rivalry means that those who are prepared to pay for a traceability system gain some benefits, like price premiums, or satisfaction out of excluding those who are not prepared to pay. The experimental evidence of Dickinson and Bailey (see Section 4.2 above) shows that a large number of users of meat in the US, Canada, the US and Japan are willing to pay price premiums for traceable products. The buying policies (requiring traceability systems for major suppliers) of major supermarkets like Wal-Mart in the US, Tesco in the UK and Woolworths in Australia demonstrate that their traceability systems are essentially private goods. And its not just large retailers that are implementing these systems. For example, the relatively small speciality organic stores are implementing the same supplier requirement conditions.

The potential for a pandemic from Avian flu (Strain H5N1) and similar infectious diseases and the experiences with BSE (bovine spongiform encephalopathy) and its suspected association with v.Creutzfeldt-Jacob Disease (vCJD) introduces a new dimension and, perhaps, stronger public good case for an intervention in livestock traceability. Other infectious diseases that spread between animals (e.g. foot and mouth) may also fall into this category, though with less severity if they don’t have too much impact on consumer welfare. While it’s still possible to exclude people from using a traceability system, in this infectious disease environment it may no longer be efficient to do so because everyone could gain benefits from having a comprehensive identification and traceability system. The emergence of this type of infectious disease threat that can jump across species and geographic borders enhances the public good characteristics of certain, not all, traceability systems in the livestock-food industry. At the same time it’s important to recognize these are not just any identification and traceability system. There are conditions. To qualify as a public good it must have features that deliver the benefits required to improve identification and traceability attributes for the purpose of controlling the infectious diseases. Otherwise, the system may be simply a private good and be best left to the private market to deliver. Moreover, in any event it has to be shown that there would be a social gain to society from the intervention. On this point there is a lack of solid evidence that mandatory identification and traceability systems actually generate social benefits. That is, there is a lack of evidence to show gains in producer and consumer surplus.4 This is one of the reasons why mandatory identification and traceability systems attract criticism, especially from producers who face the upfront costs of tagging.

ii.) Externalities are present when the costs and benefits to producers and society are not aligned.

Sometimes producers generate costs to society without fully paying for them (e.g. environmental damage is an oft cited example) and sometimes producers may generate benefits for other members of society or perhaps other members of a supply chain, without receiving payment for them. For livestock traceability systems the proponents of mandatory participation believe externalities exist and that this justifies, in part or whole, the intervention. Without intervention there is a perception that non-participants can ‘free-ride’ on the efforts of those who pay. This argument gains credence when indiscriminate bans and boycotts are applied, for example, at a country level. For example, when meat imports are banned from a country and all of its suppliers because one supplier from that country doesn’t have good management practices or an effective traceability system. Again, however, it’s imperative to examine alternatives, including voluntary interventions or existing regulations to see if they are not more cost effective and would generate more social surplus than a new intervention. The damaged country could, for example, issue export permits only to firms with approved identification and traceability systems and good management practices, leaving domestic consumers with the freedom to choose between foods from traceable or non-traceable systems.

3 Refer to Microeconomics:Theory and Applications, by Mansfield E. (Norton & Company, NY) for more about these principles. 4 For more on the quantification requirements for producer and consumer surplus from an intervention try Bohm, P. 1973, “Social Efficiency: A Concise Introduction to Welfare Economics”, Macmillan Press, London

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iii.) Moral hazard, as a source of market failure, exists when there is some asymmetry of information available to producers and consumers. This problem arises when the quality of a good or service is not readily or materially evident. Regulations apply in most countries to safeguard food quality and the efficacy of pharmaceuticals (drugs). This is another popular line of argument for government intervention in traceability systems. Again, however, it’s imperative to examine alternative and more cost effective interventions. These interventions could include education and communication programs for consumers to help them recognize food prepared through good management practices. Better labelling and enforcement of compliance with labelling laws can overcome many problems in this area.

iv.) Economies of scale, is a somewhat weak cause of market failure in today’s globalized trading environment. When there are strong economies of scale there may be just one supplier and a monopoly structure with lack of competition.5 The real issue, however, is whether or not markets are contestable. In today’s global environment there are very few naturally un-contestable markets. In Australia, for example, many of its monopoly contestability problems are actually caused by regulations (e.g. media ownership, export controls on wheat). The presence of economies of scale with identification and traceability systems has also encouraged promoters of mandatory systems. With compulsory participation in an environment of strong economies of scale the unit costs of participation (e.g. tags) may fall, at least theoretically. Supporters of mandatory systems have long used this as a basis for intervention, but it can end up having unintended side-effects because it actually creates a monopoly. In reality, mandatory systems run the risk of ending up with a monopoly structure, high costs, poor technology and, moreover, a market without contestability. With the new technology embodied in traceability devices it is essential to stimulate competition between suppliers because of the potential for new, lower cost and more effective discoveries. There is in the information technology industry the sobering guiding principle called Moore's Law (see above) which states that the number of transistors that fit in a given area of silicon doubles about every 18 months. This means prices are expected to fall substantially every 18 months and, therefore, to become attached to an old technology can become a very expensive commitment. The Japanese ‘HIBIKI’ project described above is essentially pursuing Moore’s Law through its aim to reduce RFID tag price to a few cents. The problems of becoming attached to a technology can be illustrated in a time based cost curve scenario (Chart 5.2). In this example it looks to be a great first mover advantage to lock into the tag technology labelled ‘fast start’, but after a few years it’s unable to compete with the ‘slow start’, but increasingly low cost technology. This hypothetical example illustrates the importance of keeping up with new technology. On balance it seems that the case for a mandatory identification and traceability system had been quite weak until the emergence of Avian flu and other infectious diseases and their potential to spread quickly across species and regions. But even here it is essential to demonstrate that economic benefits arise from intervention. It also places greater demands on the functionality of such a system and if the system doesn’t deliver the functionality required to control such infectious diseases then the case for mandatory systems is much weaker. In all cases it’s imperative to examine substitute interventions. Even when there is a mandatory system it’s also important to create some competition and contestability in delivery and ownership of the system in the interests of cost containment as resources are never unlimited, even for public health.

5 A monopoly which maximises profits can be shown to produce a volume of output that equates marginal costs with marginal revenue and that this volume is less than optimal from the point of the whole of economy.

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Chart 5.2: Keeping Technology Choice Options Open

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

1 2 3 4 5

Year

Cost/tag

Fast start-slow finish Slow start-fast finish

5.1 Regulation Substitutes It may be useful to examine the following policy measures before imposing a mandatory identification and traceability system, even when a public good case exists: ● Industry protocols with agreed lines of responsibility and accountability, to encourage operators at all levels to adopt good management practices. The ‘Industry Action Agendas’ is an example of this approach (http://www.industry.gov.au/). ● Enforcement of compliance with standards (e.g. through audits) and existing laws on good management practices, labelling and misleading advertising. ● Engagement of consumer choice groups (e.g. Choice, in Australia) to actively monitor consumer experience with food quality irregularities and food poisoning and publication of the results. ● Increased penalties for distributing diseased livestock and unsafe food. ● More detailed standards for traceability, requiring a short time limit for recalling a faulty product or diseased animal. ● Licensed animal production farms, which along with others in the supply chain, could be subject to audit to ensure compliance with good and safe management practices.

http://www.industry.gov.au/

47

6. Functional Requirements The biggest challenge with establishing a traceability system is in defining what’s required of it to meet the needs of a diverse set of stakeholders. System designers will generally design any system around a requirements statement, irrespective of how good or bad or efficient or inefficient the requirements statement is. System designers mostly just want a black and white list of functions and to get on and build an operating system that works to deliver the functionality the stakeholders have described. For this reason particular care is needed in establishing a requirements definition statement otherwise stakeholders can easily end up with a system that they never intended to have. The requirements definition statement is essentially the equivalent of a new product or service design statement, which lists the attributes that are expected to results in a successful product. In this section nine (9) functional requirements are identified and which need to be considered by the traceability system leaders. 6.1 Objectives of the Traceability System. Owners and stakeholders have to be quite clear about what the purpose is of the traceability system. Is it about improving quality management in existing supply chains? Is it about improving responsiveness to disease events/outbreaks (e.g. traceback to origin within 48 hours)? Is it about improving supply chain competitiveness and performance? Is it about industry image and promotion? Is it about satisfying another country’s (e.g. EU) import requirements and nothing else? Answering these questions means describing, in detail, the strategy behind the traceability concept and the breadth, depth and precision sought of the system.6 Answering these queries may require further investigation, including market research into user willingness to pay for certain attributes. Unless there is willingness to pay the business model is flawed and unsustainable without some form of regulatory support to compel participation. All the users have to be identified, including those directly in the supply chain, along with support service providers. The project manager and programmers for system development are going to refer regularly to this statement and hold the principals to account. It will guide processes and work practices as well as investments and training programmes for own staff and stakeholders. With an industry driven traceability system it will be important to have in place a leader and leadership group to develop background information, strategic frameworks and reach agreement on the objectives. A starting point for setting objectives is to ask stakeholders ‘what do you want the traceability system to do for you’. 6.2 Essential Requirements of Traceability Having established a clear statement on the objectives it is time to set out what might be labelled the essential or basic requirements for achieving an effective traceability system. The following list of six essential checkpoints should be considered, noting that there are likely to be differences between industries. For example, the requirements for individual animal identification will vary according to animal size and value.

6 Economic Research Service 2004, “Traceability in the US Food Supply”, USDA

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6.2.1 Scope of the Traceability System There are three dimensions to scope. First, there is a vertical dimension. At what point in the supply chain will data start to be collected (from the feed and paddock inputs or the saleable livestock or somewhere else?). At what point will the data collection process finish? (at the abattoir, retailer or end user level?) Second, there is a horizontal dimension. Will the system apply to all livestock or exports only or to large only, not small producers? Does the answer to this question compromise the objectives established for the system. Third, there is what might be called a dual purpose dimension. Are there secondary or joint purposes sought of the system? For example, individual identification may enable improved management of livestock performance through, for example, matching feeding to individual livestock weights7. 6.2.2 Individual or Group Identification Answering the question of whether individual or group identification is appropriate requires an examination of cost, technology and impact on system efficacy. Cost tends to be governed by the value of the animal, that is, it’s the cost of the identification relative to the sale value of the animal. As a general guide individual identification will tend to be associated with and actually favour higher valued animals. An important issue to consider here is whether the system is compromised by having group identification. If the system isn’t compromised then the case for individual identification is weakened. The chicken meat industry has demonstrated that group systems can work effectively where vertically integrated structures dominate the industry. 6.2.3 Six Sigma Reliability and Integrity8 It’s common to make claim to the reliability of RFID traceability systems on the basis that they enable automatic reading and recording of data, sometimes concurrently from several or even hundreds of tags at the one time. The question here is just how reliable are the nominated RFID technology and the readers of the data, especially when environmental conditions vary and more than one product or animal is being read at the same time. Researchers at the Department of Agriculture, Food and Rural Development in Alberta (Alberta Agriculture 2006) tested and compared Allflex Multi-Panel RFID and Digital Angel Multi-Panel RFID readers and found significant differences in reliability which ranged from a very low 77.7% to 99.9% correct reading. Wide laneways that enabled more than one animal to pass in front of the antenna resulted in very poor performance, especially with half duplex technology. The traceability system also needs to deal with the lifecycle of livestock and products. A closed loop is needed to avoid having a database with increasing numbers of dead animals in it and other irregularities. This probably means tags with read only capability. In addition, when animals lose their tags or the tag is damaged there has to be an effective replacement process to avoid a growing list of animals without any identification. More generally, compliance with the rules of the traceability system also has to be of a high level which may mean penalties for non-compliance. 6.2.4 Integration with Existing Databases Integration with existing databases is one of the most, perhaps the most important of the essentials. With just about every animal species there are already a number of existing databases, some private and some government, that contain information about business activities. A key issue is how a traceability system can be integrated with existing systems and without adversely affecting them. 7 Individual animal management systems using RFID tags have been designed by the Australian Sheep CRC. (Refer to http://www.sheep.crc.org.au/). 8 Six Sigma is a methodology to manage process variations that cause defects (http://en.wikipedia.org/wiki/Six_Sigma), defined as unacceptable deviation from the mean or target; and to systematically work towards managing variation to eliminate those defects. The objective of Six Sigma is to deliver high performance, reliability, and value to the end customer. The idea was developed by Bill Smith at Motorola.

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While it may be tempting to write or rewrite everything from scratch into a grand centralised system the reality is that it is unlikely to be accepted or, even if it was accepted, to work as well as having a range of databases, each dedicated to their respective specialisations. Centralised solutions also prompt questions about data ownership, confidentiality and security. Pape et.al. (2004) proposed establishing an independent data warehouse trustee, acting like an escrow agent, to hold data until a legitimate health investigation need is established. The official system would still be centralised, but only hold data on the animal, not on stock movements until requested. Other databases in this decentralised system would continue to operate and probably expand through their focus on commercial activities, but in reality the demarcation line between public and private traceability system tasks can become blurred. In an ideal traceability system it may be useful to know what happens to the end user after consuming the food coming out of the traceable supply chain, especially if the primary purpose of the system is for surveillance, detection of unsafe food products and infectious diseases and quick response. Golan et.al (2004 or 2005) points to a gap in traceability systems, both existing and planned, in tracking food once it has been sold and consumed. Yet, if the system makes claim to being a genuine and complete traceability system that provides an effective aid for detection of unsafe products then this is the level to think about. Otherwise, it may be falling short of consumer preferences and short of any public good model that purports to facilitate human health and quick response to the release of unsafe products and emergence of infectious diseases. Nevertheless, a few new issues arise if a system is to extend to a post-consumption tracking stage, including privacy laws and customer response to gathering data after purchase. This underlines, again, the importance of undertaking research into willingness to pay (WTP) before starting development and identifying exactly which attributes consumers are willing to pay for. The WTP research may find it’s not essential or viable for the traceability system to have post consumption tracking as a requirement. It’s only those systems that have a major human health dimension to their primary purpose that would continue down this line. If the system does not have this as a primary purpose then that’s no problem as this could enable focus on other essential requirements like productivity improvement and cost efficiency and promotion. It’s more likely these systems would be characterised as private goods requiring no regulatory support. 6.2.5 Independent Audits For the traceability system to gain sustained acceptance by its primary stakeholders and international credibility and meet the requirements of quality management systems it is essential that regular audits are conducted of it to ensure it’s performing according to what’s intended of it.9 6.2.6 Nature of the IT Architecture The selected IT architecture should reflect all of the carefully considered objectives and essential requirements. This is likely to mean design and development of a distributed client-server facility. Annex 1 contains a more technical description of the distributed client-server facility. The term client/server was first used in the 1980s in reference to personal computers (PCs) on a network. The client/server software architecture is viewed as being a versatile, message-based and modular infrastructure that is intended to improve usability, flexibility, interoperability and scalability when compared to centralized, mainframe, time sharing computing. A client is defined as a requester of services and a server is defined as the provider of services. A single machine can be both a client and a server depending on the software configuration. In contrast to a distributed client-server facility, a mainframe software architectures has all intelligence hosted within the central host computer. Users interact with the host through a terminal that captures keystrokes and sends that information to the host. Mainframe software architectures are not tied to a hardware platform. User interaction can be done using PCs and UNIX workstations. A

9 The Australian Beef Association recently (July 2006) called for an independent audit of NLIS after reports of significant differences in NLIS tag allocations and actual livestock numbers (ABC, July 2006).

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limitation of mainframe software architectures is that they do not easily support graphical user interfaces or access to multiple databases from geographically dispersed sites. It’s difficult to see a mainframe architecture functioning effectively with a livestock traceability system because there are and would remain so many other databases operating around it. Within this section would come detailed descriptions of the database functionality: likely to be web based; with a centralised data storage capacity; distributed on more than one processor; client server business application based (a user interface for implementing the functional model, a business interface for the process model, a data layer for the information model) and then more details on server operational functions (e.g. would create and maintain a registry of PICs and tags issued and livestock movements) and administrative functions (e.g. create and maintain a register of approved stakeholder accounts); data sources; and historical records stored for reports and inquiries. 6.3 Impact Sensitivity Analysis A workable traceability system needs to have identified key risks in the traceability system, the probability of them happening and the impact should they happen. Associated with this would be a pre-defined response or solution (administrators don’t really want to waste too much time working out the solution after the risky event happens), with details on what has to be changed, where, when and by whom. 6.4 Verification and Validation and Common Sense The purpose of this function is to be sure the system works consistently and is seen to work consistently and conforms to the detailed requirements and purpose expected of it. This point is related to accountability and governance below. There should always be a reality check to ensure the system works as intended and doesn’t generate silly results like, for example, having 50 million tags purchased and on the database when information from elsewhere indicates there are only 25 million stock units alive. 6.5 Process Compliance The business function statement would describe the business tasks needed to be undertaken to make the process model work smoothly (e.g. accept, record and maintain a register of PICs; accept, record and maintain a register of tags; link tag RFIDs with PICs etc.). The detailed process needs to be fully tested to ensure compliance with the processes intended to be undertaken by business users. 6.6 Accountability and Governance It is essential to have a formal process of accountability, not just to satisfy independent auditors, but more to ensure the system has authorised checks and balances and integrity. From the outset it seems important to have some practical judgement and common sense in the system. The US management advisor, Peter Drucker, warned … “The most important thing in communication is to hear what isn’t being said”. This statement has application to traceability systems because, ultimately, there is significant interaction with the people throughout the supply chain. Proper and thorough checks and balances are needed here and they may not all be capable of being fully automated. This means human judgement is required in the end and this judgement needs to be made by people or groups of sound mind and judgement. It would be useful to establish a Traceability System Performance group within any system to meet regularly and examine overall performance to ensure it (the system and business running it) is being managed effectively.

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6.7 Education, training and learning Many businesses that have made large investments in RFID have reported disappointing returns on investment (ROI). Problems are attributed to lack of capacity to exploit the technology (sometimes due to small size of the user and lack of skills); absence of an effective implementation strategy and resources; application gaps; technology performance problems; and lack of awareness about the scope and value of information generated (Malhotra 2004). According to Malhotra the failure rate of technology implementations for business process reengineering efforts is as high as 70% and not much different for related technology implementations and applications which probably extend to RFID. Significant failure rates persist despite tremendous improvements in sophistication of technologies and major gains in related price-performance ratios. Many managers attribute the problems to technology implementations being too slow and too expensive. Manholtra points to some research showing negative correlation between tech investments and business performance. An analysis of 7,500 companies found that: ● Companies with best-performing IT investments are often the most frugal IT spenders. ● Top 25 performers invested 0.8% of their revenues on IT in contrast to an overall average of 3.7%. ● Highest IT spenders typically under-performed by up to 50% compared with best-in-class peers. An effective traceability system requires an effective education and training and communication program as part of an overall knowledge management strategy. Moreover, if that declining cost curve (Chart 5.2 above) is to persist then it needs skilled people to drive it. It is suggested a Knowledge Management Strategy Document be prepared as a key function for a traceability system. It does not need to be complex, but we suggest it is of overriding importance for long term survival. A simple, but clear knowledge management strategy can achieve these outcomes: • increased awareness and understanding of the strategic importance (improved productivity, better control of food safety etc.) of managing the data and information generated by the traceability system. • Identification and management of the costs and benefits of the traceability systems in a way that suits the diverse individual users. • commitment of resources for effective implementation and responsiveness of the new technology to change. • stimulation of best management practices for knowledge management. • provide producers with a clear understanding of their current situation, where they want to go for the future and at what speed, and how to get there. • a basis for measuring progress over time and against other producers in similar circumstances. • a response to what Peter Sandman calls the “outrage” factor. The level of outrage resulting from a risky event is dependent on the level of understanding about the risky event occurring (www.cetec-foray.com.au/RiskeNews/Oissue10.htm). When people are angry or frightened they often overreact to risks that have a low probability of occurrence. Shark attacks and terrorism, for example, generate a lot of outrage, even though their probability of them happening is relatively low compared to, say, dying from a car accident, obesity or falling off a ladder. Outrage events should be identified and communication strategies developed to ensure the “outraged events” do not consume all resources and swamp the benefits of dealing with genuine high impact/high probability events.

http://www.cetec-foray.com.au/RiskeNews/Oissue10.htm

http://www.cetec-foray.com.au/RiskeNews/Oissue10.htm

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The Knowledge Management Strategy Document could include these basic components

1. A statement about where we (the system users) are now. Include a description about how knowledge management is affecting business or farm enterprise goals, culture, productivity, income and revenue.

2. A statement about where we want to be. Include an outline of what knowledge management will do for the farm or business enterprise and how it will help it achieve its objectives. What might the business have and look like when it achieves best knowledge management practice standards?

3. A statement about how to get to where it wants to be. Include here a description of actions to be undertaken, covering technology to be adopted, who will be responsible and the process. Need to consider the technology infrastructure, resources needed, training requirements, timelines and responsibilities.

4. Partial Budgets, modified, as required, to include non-economic factors, impact over time and externalities. These budgets would show the before and after impact of adopting the traceability system

6.8 Customer Relationship Management This is a major function of a traceability system. Yet many of the promoters of traceability systems fail to fully recognize its importance. Ultimately it is the customer that pays for the systems, unless there is a mandatory requirement or element of compulsion built in with funding coming through taxes. Even with mandatory systems the customer cannot be totally ignored because support for regulations may decline over time. Formal customer relationship management is a critical function of the traceability system and if it’s ignored expect the system to have a short life. 6.9 Review it, Revise it …and include a ‘Sunset Clause’ The one thing that is certain with a traceability system is that it will not perform exactly as any of its stakeholders expect, probably less than expected, for a while, sometimes a long time. The learning curve will be steep if it is managed well and flat if performance and customers are ignored. The system needs to be under constant review to ensure it’s keeping abreast with new technology and both the consumer and producer processes are being managed effectively. The organisational structure needs constant review. What’s a public good driven system today may be a private good tomorrow. A good traceability system today may be obsolete in 5 years with new information and communication technologies and growing consumer awareness. If there is a mandatory traceability system then a 5 year sunset clause should apply, at which point a well informed decision would be made to continue or discontinue or replace the system or perhaps let it run under privatised conditions.

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7. Traceability Models for Business and Industry The decision to develop a traceability system will confront users with all the same issues as they face in adopting any new product or service. There are changes in investment costs and operating costs, with impacts on productivity and market access which in turn may impact on the volume and unit price of sales. There are several RFID cost calculators available online, many of which can be downloaded for free, including: ● www.agmanager.info/livestock/budgets/production/beef/RFID%20costs.xls Appendix C contains an Excel framework for estimating annual and investment costs of adopting RFID at a producer level. This has been set up for cattle, but is easily adjusted for other species. It is the overall supply chain business model that governs viability and at this level the cost and benefits for all operators and users have to be considered. There are opportunities and threats to be dealt with by a structure that typically has weakness and strengths and potentially significant constraints. It’s important to recognize the threats of new technology can be high when the technology is not adopted, especially when a large number of competitors adopt it. Even large companies with significant resources, like Wal-Mart, have found the decision to adopt a new technology can be complex and take time. They, for example, found themselves extending their deadlines several times for supplier adoption of RFID technology. Many suppliers could see mostly the upfront costs and little in the way of material returns, especially when the retailer offers no price premium, just market access. Nevertheless, there have been exceptions including an unexpected fish and meat supplier, Beaver Street Fisheries (http://www.beaverfish.com/) (Cooke 2005). Beaver Street set out on a deliberate strategy to quickly adopt RFID for some products, which enhanced their position with Wal-Mart (thereby giving them market access), but by slowly extending it to all of their products they kept control of costs and limited their risk of exposure to faults and failures (as many as 30% of HF RFID tags are reported to be failing, especially when attached to packaged liquids and cans) and a new RFID technology emerging. Wal-Mart have accepted Beaver Street’s strategy which is now being adopted by many other suppliers. If giant companies like Wal-Mart and its major suppliers are experiencing difficulties with RFID then the starting question is what are the prospects of finding a viable business model for small businesses and industries like those in the NAP program. While the initial prospects may seem limited there is still potential to develop a value adding business model by having a strategic focus on highly differentiated products for niche markets where the willingness to pay for traceability systems could be relatively high. In searching for the optimal traceability model there is also a need to revisit the evidence, if any, on market failure and whether this may constitute a case for regulatory support. The public good nature and externalities of traceability systems have been described above. For the NAP industries, however, there is the question of whether benefits are likely to exceed costs even if there is market failure. Answers to this question require a case-by-case examination of willingness to pay at an industry level. The third issue in the business model is functionality. The nine functionality issues described in the previous section need to be addressed at an industry level. It’s relevant to note that traceability systems do not have to be based on RFID or include individual animal identification and the grand plan of centralisation of data. The Australian chicken meat industry seem to be surviving with their system of barcodes for packaged meat and without individual identification (refer to Section 2.1 above). It’s understood the main processors can traceback from a disease incident within 2 hours. To recap, the major chicken meat suppliers can trace back to a single day's production. This means, at least in their case, they can trace back to 2-3 farms, as only 2-3 farms at most will go through a plant in a single day, and all these farms would therefore be treated the same in a trace-back event. All products leaving a chicken meat processing plant is identified by barcode on the individual item

http://www.agmanager.info/livestock/budgets/production/beef/RFID costs.xls

http://www.beaverfish.com/

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packaging or on the boxes/trays in the case of bulk product. Most major retailers or fast food outlets only have one supplier of bulk product per store, and so even when bulk product (eg raw chicken breasts bought from the deli section in a supermarket) has been sold piece by piece to individual customers, there is capacity to trace back to the supplier, who, in turn, can trace back to the day of production (day they went through the processing plant) and plant of production, which then allows trace back to 2-3 farms that were processed through the plant on that day. Even in the case of further processed products, the products are bar coded to allow trace back to the plant and date of manufacture, and quality assurance records then allow the origin (day and plant) of the meat from which the products were manufactured to be determined, which again allows trace-back to 2-3 farms that were the original source of the meat from which the products were manufactured. There are no plans for individual traceability of chickens because the costs are seen to be prohibitive. The chicken meat solution could be used for at least some of the NAP industries (e.g. ducks and turkeys), though it is likely that with some processors there may be a large number of different producer’s animals being processed on any one day. In these circumstances, a solution can be found by having time of the day barcodes, otherwise the traceability system and especially its capacity for a quick 48 hour response to a disease event may be compromised.

7.1 Case Studies There are many traceability case studies and the following four are used to illustrate traceability systems used or experimented with in industries similar to those in the NAP group.

7.1.1 Klein Karoo Cooperative and Saco Systems (http://www.saco.co.za)

The Klein Karoo Cooperative in RSA approached Saco Systems with the requirement of having to prove to European Union inspectors that ostriches had been inoculated, kept under quarantine and handled correctly before being slaughtered.

"A comprehensive record and audit trail from the original place of birth, through the various farms to the abattoir was required. To this end, 100 000 ostriches were tagged with reusable tags at the time' of inoculation," explains Des Oliver from SACO Systems, supplier of RFID systems.

Handheld terminals were used by the veterinary technicians to record the date and time of inoculation, the place where the inoculation took place and the batch of medicine used. The same information was also stored on the tag attached to the wing of the ostrich. On return to the Cooperative, this information was downloaded from the handheld terminals onto the central database.

Similarly, when the ostriches were delivered, each one was scanned by a reader at the offloading point. "This process verified that each ostrich had been inoculated at least three months prior to being delivered and any birds that did not conform to these criteria could be identified and rejected," Oliver reports. "Not only did the system ensure that the correct procedure had been followed for each bird, a record of the delivery was also matched with the main database and could then be used for payment to the specific farmer and other record keeping and statistical purposes."

SACO Systems' complete solution includes consultation, customization, installation, commissioning, training and support. The company believes that "it is not only technology which drives a solution, but a comprehensive understanding of a customer's business, its processes and information systems that makes for a successful end result."

Applying a 'best-of-breed' philosophy, SACO Systems carries out a business process analysis to determine and deliver the best solution for every individual client. On various occasions, it has had to develop innovative new RFID concepts to ensure success. With its broad experience base, ranging from project management through to process engineering, SACO Systems has solved tracking requirements for clients across the whole of Southern Africa and as far afield as Europe and the Middle East.

http://www.saco.co.za/

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7.1.2 The Australian Sheep CRC’s ‘E-Sheep " Project (http://www.sheepcrc.org.au) E-sheep® is being developed by the Sheep CRC in Australlia to facilitate and accelerate the transition from manual, time-consuming, imprecise flock management to high-tech, fast flowing, and accurate individual animal management. "E-sheep®" is a term that has been registered by the Sheep CRC to describe individual animal management in the Australian sheep industry. E-sheep® involves using knowledge about the individual sheep within a flock to make decisions about their management and marketing that results in improved across-flock performance and profit. There are several components to E-sheep, including the weighing system.

The remote walk-through weighing system works in the following way:

• Using spear gates and trap yards sheep walk through a remote weighing system on their way to either feed or water.

• As they go through the system their electronic identification (RFID) tag is read by a panel reader and sent to a data logger.

• The sheep then move over an electronic weighing platform and by using a weighing algorithm the sheep's weight in kilograms is estimated and then recorded on the data logger.

• At a predetermined time of day a CDMA modem on the remote weighing system is used to automatically dial up and transfer data to a computer located in the farmer's office. The farmer is then able to download the data from his computer into a database or spreadsheet for analysis.

• The system is designed to operate on 12-volt batteries powered by solar panels.

• The set up can be used in a fixed system or as a portable unit mounted on a trailer. On-farm applications The remote walk-through weighing system enables farmers to record tags and live weights of animals on a regular basis without labour, so that animals can be individually identified and their growth rates tracked. It could be used for a range of farm applications including:

• In pastoral areas where minimizing sheep stress and reducing labour costs are important.

• In cell grazing operations where sheep are regularly changing paddocks and recording growth rates and monitoring sheep health is important.

• In prime lamb enterprises where tracking growth rates is critical.

• In feed lot enterprises where recording of weekly growth trends is important.

Future Possibilities The second phase of the project is currently investigating the potential to add on electronic drafting to the system so that animals can be drafted off using a range of criteria. A third phase of the project will look at developing different types of sensors to aid in drafting. For example, odour detection (e-nose technologies) that could pick up flystrike or facial image sensing equipment that can detect sheep infected with worms. Commercialisation The technology is still in the on-farm research phase and should not be considered as commercial at this time.

http://www.sheepcrc.org.au/

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7.1.3 Maple Leaf Foods and DNA Traceability System for Pork (www.mapleleaf.com) Maple Leaf Foods Inc. is a leading Canadian food processing company committed to delivering quality food products to consumers around the world. Headquartered in Toronto, Canada, the company employs more than 18,000 people at its operations across Canada and in the United States, Europe and Asia. Maple Leaf Foods had sales of $C6.5 billion in 2006. More information on Maple Leaf Foods can be found at www.mapleleaf.com. This note is derived from the company’s Press Release on 27 January 2004. The Genetics and Science Division of Maple Leaf has completed research and development into producing a DNA traceability program for pork, with what it expects to be far-reaching benefits for food safety and the Canadian pork industry. According to Dr John Webb, the Director of Genetics and Science at Maple Leaf Foods ‘…the benefit of Maple Leaf’s DNA-based traceability system is the ability to track pork products from grocer’s shelf back to the farm of origin through each step in the value chain. The value chain can be divided into three main components: live animal, processing, and distribution and sales. Although yet to be implemented in most countries, current tracking systems rely on the use of animal tags, tattoos and computerized bar coded labels to rack live animals. However these methods break down when it comes to effectively tracking individual meat products through the processing and distribution phase. What is required, and what the Maple Leaf system delivers, is a reliable, cost effective method of tracing pork products through the entire value chain. The need for traceability in meat products is being driven by a number of factors including: · Increasing global concern over food safety · The need for zoning in the event of epidemic animal disease · Tracking the source of drug residues · Recall in the event of contamination (eg pesticides) · Feedback to allow quality control · Protection against bioterrorism · Establishing a “Made in Canada” brand based on food safety assurance… How it works: At the farm level, each time a mother pig (gilt or young sow) enters commercial production, a blood sample is DNA-typed for the SNP panel and the identity information entered in a database. Producers receive bar-coded blood tubes, together with a CD-ROM containing the details of Internet access. The breeding female’s identity is written on a sheet beside the barcode, and sent with the tubes to the DNA lab. The lab types the sample and enters the mother’s DNA genotype and farm into the database. The producer updates the database directly with farrowing date (birthing date) and culling date. To verify the origin, meat samples are sent to the laboratory, and the DNA genotype is entered into the database. Meat is then matched to the mother’s identity, which indicates the breeding farm and date of birth of the progeny. A computer search engine, developed by IBM in collaboration with Maple Leaf information systems specialists, does the matching. A live animal tracking system will then link to the nursery barn, finisher barn, and from there to transport and the slaughter plant. The live animal tracking system is thus an essential part of full traceability, and is complementary to DNA traceability. The DNA traceability system will allow Canadian pork marketed anywhere in the world to be traced back to the maternal sow, providing the Canadian pork industry with a major competitive advantage and an essential point of difference for the “Made in Canada” brand. Canada has set the international gold standard for pork, based on our superior quality, exclusion of growth promotants and sustainable environmental practices. DNA traceability provides further assurance to consumers that they are getting the best pork from the world’s healthiest hogs, raised under the third-party audited Canadian Quality Assurance program.

http://www.mapleleaf.com/

http://www.mapleleaf.com/

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“In an era of growing concerns over food safety and increasing demands for full traceability of meat products, this breakthrough will deliver an added level of food safety assurance,” said Michael H. McCain, President and Chief Executive Officer of Maple Leaf Foods. “By using DNA, which is nature’s bar code, this system is uniquely positioned to trace product from the consumer to the farm of origin, where current methods cannot. DNA traceability will provide a calling card for Canadian pork that no other country can currently match.” Maple Leaf worked with Pyxis Genomics Inc. (www.pyxisgenomics.com) in the research and development phase of the DNA traceability project to develop a panel of highly informative genetic markers. By combining well-proven fingerprinting technology, enhanced with its own innovations, Pyxis successfully developed a gene panel that provides the foundation for the pork traceability system, which can accurately and rapidly trace pork products back to the farm of origin. Although the traceability system was developed for pork products, it is broadly applicable to other animal-species. The traceability system involves obtaining a blood sample from the maternal sow, which is then DNA-typed. The DNA information is then entered into a database linked to the farm of origin information. Producers can then update the database directly with the dates of birth of each litter. “The success of identifying the gene panel significantly enhances our ability to provide live animal tracking systems that can directly link store-bought product back to its origin in a matter of hours, instead of days or weeks,” said Dr. Lawrence B. Schook, President and Chief Executive Officer of Pyxis Genomics Inc. “This is critical in an industry seeking to offer the highest standards of assurance to consumers in containing food safety incidents when they occur.” Maple Leaf and Pyxis have chosen Orchid BioSciences to develop an assay to analyze the genetic marker panel and to implement a quality accredited laboratory process that will deliver rapid, high-throughput DNA analysis. Orchid is a leading provider of genetic testing with a proven record in the agricultural sector through its scrapie genotyping service, processing over half a million samples at its U.K. facility last year. “Orchid’s proprietary genotyping and service testing expertise ensures we can deliver cost-effective, accurate and rapid high-volume genetic analyses for animal food safety applications,” said Paul J. Kelly, M.D., Chief Executive Officer, Orchid BioSciences, Inc. “Orchid has been a pioneer in developing and implementing new technologies to advance the utility of DNA identity testing and we look forward to contributing to the commercial success of Maple Leaf’s traceability program.” Maple Leaf and Pyxis have chosen IBM Canada Ltd. to create and implement the comprehensive database featuring a computerized search engine that will quickly match DNA from a piece of meat to the mother’s identity. The traceability database is being designed to be capable of expansion and potentially link into any current or future system of national traceability in Canada, while also protecting the rights and confidentiality of producers. 7.1.4 TraceFish and Traceability of Fish Guidelines: EAN TraceFish was a two year project of the European Commission. It brought together companies and research institutes to establish a common position on traceability information to be recorded in the farmed and captured fish supply chains. The main outcome of TraceFish is three voluntary consensus-based standards for recording and exchange of traceability information in the seafood chains. - Farmed Fish standard For full-chain traceability, the question was what data should be recorded, how and where in the captured fish chain? This standard (Specification of the information to be recorded in farmed fish

http://www.pyxisgenomics.com/

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distribution chains) is distributed through the European Committee for Standardization (CEN), and the full name is CWA 14659:2003, Traceability of fishery products. - Captured Fish standard This standard (Specification on the information to be recorded in captured fish distribution chains.) is also distributed through CEN, and the full name is CWA 14660:2003, Traceability of fishery products - - Technical standard The question here was how should the data be coded, transmitted or made available in electronic form and what (existing) electronic standard should be chosen to facilitate the dissemination of these data? The TraceFish Technical Standard is the basis for many projects where the goal is electronic interchange of food traceability information. Chart 7.1 shows the basic supply chains maps for captured and farmed fish (EAN International 2002). From processing to consumer the maps are similar. In the supply chain for captured fish it is necessary to trace fish or products made from them all the way through the supply chain from the vessel that landed the fish to the point of sale to the consumer. The farmed fish requirement extends backwards in the supply chain to the fish farm, the eggs and parents of the fish. The EAN/UCC system offers a global traceability solution using unique numbering with related bar codes that allow for scanning/identification at every step of the chain. The EAN.UCC bar codes are familiar to most people from their experience with point of sale scanning at the supermarket. However, these bar codes represent only the GTIN (Global Trade Item Number) and a link is required to a database in which the item attributes are held. The Uniform Code Council (UCC)/EAN-128 symbology can encode additional information such as batch number or best before date. The SSCC provides the unique identifier for the individual logistic units. In order to comply with Regulation (EC) 2065/2001, it is a requirement that information about the commercial and scientific names (species), catch area and method of production – whether it is a farmed or a captured fish - is to be available throughout the supply chain. This can be achieved by means of the labeling or packaging of the product, or by means of a commercial document accompanying the goods. In the TraceFish models there is a distinction between what, from a traceability point of view is considered mandatory and that which is optional. The specified information is viewed in both human

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Chart 7.1: Supply Chain Maps for Traceability of Farmed and Captured Fish

Source: EAN International 2002 readable text and barcoded format, for example UCC/EAN-128. The human readable text is often agreed bilaterally between the parties, or is specified in the applicable legislation. The data that has its base in the legislation does not physically appear in the barcodes, but forms part of the data underlying the GTIN for the product. Each party in the supply chain must take individual responsibility for providing the correct information and must ensure that it is formatted into the correct bar code, while also ensuring that secure, accurate recording systems for the information are maintained. 7.1.5 NLIS and its Controversies There are two different perspectives on NLIS. Thr proponents, including MLA (www.mla.com.au), argue along the lines of NLIS enabling access to international markets and minimizing disease impacts. The opponents, include the Australian Beef Association (membership of 800 producers) (http://www.austbeef.com.au/Content.asp?regID=15403&id=73667) , who argue the NLIS system is unnecessarily expensive and fails to deliver on health benefits, esepcially from the abattoir to the consumer. Here is a brief summary of the opposing views: Pro-NLIS from MLA NLIS is Australia’s system for the identification and tracing of livestock. It is a permanent whole-of-life identification system that enables individual animals to be tracked from property of birth to slaughter for food safety, product integrity and market access purposes (MLA 2006). There is a global trend in adopting animal traceability systems. Australia’s major competitors and customers

http://www.austbeef.com.au/Content.asp?regID=15403&id=73667

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have already or are in the process of adopting individual animal identification systems. To maintain its competitive advantage, Australia is adopting NLIS. The NLIS facilitates access to the EU market. Other markets may impose similar traceability requirements for Australia’s product. Customers around the world are becoming more concerned about food safety and traceability. NLIS can minimise the impact of animal disease outbreaks and residue incidents. According to MLA a recent Commonwealth government study estimated the overall economic loss as a result of a FMD outbreak to be between $2 billion and $13 billion. Though NLIS will not prevent a disease outbreak or residue incident, it will be able to reduce the financial and social impact of a disease epidemic due to its accurate identification and rapid traceability capabilities. Australia relies on export markets andexports 70% of its total beef production. The impact of losing one of the major markets is far greater for Australia than its competitors. NLIS uses machine-readable LF RFID devices to identify cattle. NLIS approved devices come in the form of an ear tag or rumen bolus/ear tag combination. Cattle are tagged with NLIS devices only once in their life. Cattle identified with NLIS devices can be electronically read as they move through the livestock chain. At time of reading, each owner’s PIC can be recorded and linked to the NLIS device. This transaction information is then stored in the secure central NLIS database. Once full transaction recording is in place, a life record of an animal’s residency, and which other animals it has interacted with, will be established. It is this centrally stored electronic history of an individual animal’s residency that will enable rapid and accurate traceability. Key benefits for the Australian livestock industry are seen as: ● Reduction of the financial and social impact of a livestock disease epidemic or residue incident. ● Being prepared for international customers demanding whole-of-life, property-of-origin traceability. ● Maintaining access to restricted markets. ● Ensuring domestic and export consumers continue to have confidence in Australian beef and dairy products. ● Upholding Australia’s reputation as a quality producer. Against NLIS: From the Australian Beef Association This is a summary of some of the main points from the ABA’s response to a Regulatory Impact Study into adoption of NLIS: ● The stated objective of providing traceability to the consumer fails completely. There is no legislation covering the continuation of the information chain from the abattoir slaughter floor to the consumer. There is no proposal to make the legislation complete. The proposed system is fatally flawed in that does not allow traceability back from the end consumer to slaughter, then back to birth. ● The existing tail tag system (now previous system) of identification in Australia is (was) arguably the best system in the world, and is superior to the proposed NLIS for a number of reasons. The experience in other beef producing and exporting nations is that systems similar to the proposed NLIS are not workable. The current tail tag system has had individual numbers on tags since 1992. Assessments of costs and benefits failed to properly calculate the proposed increase in traceability, as all suggested benefits were calculated from a zero starting point rather than from the current (previous) level (with tail tags) of effective traceability and livestock identification. ● The NLIS scheme does not guarantee the integrity of the central database, and the ABA has already received reports of gross errors in data held within the system. ● The suggested implementation cost of $7.50 per head sold is at odds with the ABA estimate of $37.00.

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7.1.6 Traceability in the Pork Production Chain This case study is from the EAN UCC (2003) concept demonstration project. It is based on the EAN numbering system and uses barcode technology.

1. Production Farm Level

Mandatory Traceability Information:

Global Location Number (GLN) of the farm, which is based on the EAN – UCC data structure.

A farmer in Emilia Romagna (North of Italy) identifies his pigs commonly through tattoos. All the individuals of the group will be allocated the same identifying mark, a unique farm number. A single identification by the farm number is sufficient to trace pigs from the slaughterhouse back to the farm, particularly because pigs born on the farm are typically kept on the same site until shipping to the slaughterhouse. Identification: The farm can be identified by an EAN•UCC GLN number. Data Capture and Recording: On the farm a log book (register) is maintained and the movements are recorded including the date of delivery and all relevant information concerning the pig’s health: feed, veterinary examination, etc.

2. Slaughterhouse/Abattoir


Global Trade Identification Number (GTIN).

Batch Number

Additional Information:

GLN of the slaughterhouse

Net weight

Pigs and pork have to be traceable to the farm of birth or the farm of fattening. From the slaughterhouse onwards, the farm is normally the target of the trace back enquiry and not the individual pig. Official accompanying documents follow the pig during the movements. When the pigs arrive at the slaughterhouse all the required information from the farm and related to the corresponding pigs is recorded and computerised. On arrival a Batch Number is assigned to the group of animals dispatched from the farm to the slaughterhouse.

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Slaughterhouse/abattoir (continued) Additional Information:

● Production date …… ● Barcode symbology: UCC – EAN-128 ● Communication: EANCOM

In the slaughterhouse, traceability is maintained by keeping the batches separated during processing (e.g. no mixing of animals from different pig holdings). This can be achieved by identifying prime cuts of meat (e.g. each piece) systematically through clearly readable tattoos when hung on the slaughter line. The Batch Number is the essential link between the trade item and the group of animals and thus reference with the farm of origin is established. This way, any disruption of the identification is prevented. Identification: To ensure traceability, carcasses and prime cuts need to be coded with the following information: ▪ GTIN. of the trade item (e.g. carcass) ▪ Batch Number

Additional information (e.g. GLN of the slaughterhouse, production date, net weight, etc.) may be bar-coded using the UCC/EAN-128 symbology.

Data Capture and Recording: At the different successive steps on the slaughter line the following information is collected and computerised to allow automatic cross-referencing:

• Carcass identification

• Carcass weight

• Lean meat percentage/fat content

• Veterinary examination

Farm/farms of origin (birth or fattening)

Communication: Traceability data (e.g. GLN of the slaughterhouse, production date, etc.) are transmitted by electronic means, such as EDI using EANCOM®. When EANCOM® messages are used, the GTIN. Of the trade item and the Batch Number are still required on the label.

3. Cutting Hall

Mandatory Traceability Information required:

▪ GTIN and ▪ Batch number

The slaughterhouse forwards all relevant information about the carcasses to the cutting hall. In the cutting hall, traceability is maintained by keeping the carcasses separated by batch number during processing. This means that any batch made up by the cutting

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Additional information:

▪ GLN of abattoir

▪ GLN of the cutting hall

▪ Net weight

▪ Production date

...

Barcode Symbology:

UCC/EAN-128

Communication:

EANCOM®

hall may comprise only pork marked with the same Batch Number by the slaughterhouse. Identification: To ensure traceability, cuts need to be bar-coded with the following information: • GTIN. of the trade item • Batch number Additional information (e.g. GLN of the slaughterhouse, GLN of the cutting hall, production date, net weight, etc.) may be bar-coded using the UCC/EAN-128 symbology.

Data Capture and Recording: The information recorded at this stage are:

• Origin of the animal (farm of birth or fattening)

• Date and place of slaughtering

• Batch Number assigned by the slaughterhouse

• Weight of meat on arrival

• Processing date/ packaging date

• Dispatch date and destination of trade item

• Weight of meat dispatched

Communication: Traceability data (e.g. GLN of the slaughterhouse, GLN of the cutting hall, EU approval numbers, production date, etc.) may be transmitted by electronic means, such as EDI. When EANCOM® messages are used, the GTIN. of the trade item and the Batch Number are still needed on the label.

4. Retail Outlet


GTIN.

Batch Number

Additional Information:

▪ Best before date

▪ Net weight

The cutting hall must forward all the relevant information about the meat cuts to the retail outlet. The information bar-coded with UCC/EAN-128 symbology on the processing label or communicated using EDI. EANCOM® can be used to generate the final consumer label. All fresh meat and meat products from retail must be traced back to the company that last processed the meat (e.g. the cutting hall). Furthermore, meat that is pre-packed for the consumer must comply with EU Directive 19/112/EC and thus be labelled with company

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▪ Production date

▪ Producer of the trade item or company name of vendor

▪ Packaging company

Barcode Symbology:

EAN 13

name of vendor, package company or producer of the trade item and with a GTIN. intended for automatic scanning at the retail point of sale checkout.

7.1.7 RFID Trials at Marks and Spencer Paxar Corporation is a global leader in providing innovative merchandising systems for the retail and apparel industry (http://www.paxar-emea.com/en/aboutpaxar/index.html). They design and manufacture tickets, tags and labels, and provide the technology—including the printers, software control systems and necessary supplies—for retail product identification. Its customers include Marks and Spencer who are in the midst of trials on item level tagging using RFID on several thousand men’s suits, shirts and ties. The 5 inch long paper structured UHF labels (868 MHz) were attached to different forms like suits, shirts and ties with a view to identifying any reliability problems. The main benefits are reported to be in improved knowledge of stock inventory levels. They need to be able to read between 1,000 and 2,000 tags/minute in stock taking. According to Paxar the benefits of RFID tags to Marks and Spencer come in the form of:

• Accurate data capture

• Item tracking through the entire supply chain

• Receiving/return of goods

• Logistics management

• Warehouse management

• Security/anti-theft

• Anti-counterfeit

The advantages of the 868 MHz RFID tag include:

• Non-line-of-sight reading

• Tags are readable at distance

• Tags can withstand hostile environments, such as temperature, dust and shock

• Tags can be re-programmed and re-used

• Tags can be bulk read

• The ability to be data specific

http://www.paxar-emea.com/en/aboutpaxar/index.html

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Marks and Spencer distributed a leaflet to customers with information about the RFID tags to ensure they new exactly what was on the tags which basically included a unique number for each garment with details on size, style and colour. 7.2 Concept Models

From the above experiences a starting traceability model for the NAP industries could have these features:

● Voluntary structure based around an industry agreement on basic standards for technology to be used and an agreed undertaking to meet the acceptable time for recall after a disease event, say 48 hours.

● Property Identification Code (PIC), which has to be provided by the producer to the processor and kept by the processor as a record of supply.

● Barcodes of international standards for meat distributed from the processor and which would have, among other things, a date and time of the day code to enable trace back to no more than say 2-3 properties.

● Regular tests to ensure recall and response speeds are adequate.

Optional extras could include:

► Mandatory structure

► Centralised database containing PICs

► RFID instead of barcodes

► Individual livestock identification, which is likely at present to be too expensive for an NAP species

► Extended trace back at the producer level to include feed and other input records.

These optional extras would need to be reviewed by each NAP industry, where there may be different costs and benefits. One way of isolating which exact features, including regulations, would become part of the business model would be to start with a Michael Porter type of country or regional competitiveness framework (Chart 7.2). In Chart 7.2 it applies to an industry level. In this framework competitiveness is governed by four interlinked factors and activities: ● Firm strategy, structure and rivalry – it is the intensity of rivalry and competition that drives improvement in productivity and innovation. ● Demand conditions – the more demanding customers are for improved goods and services the greater will be the level of innovation and pace of quality improvement. ● Related supporting industries – the closer suppliers and buyers are to each other the better will be the exchange of ideas and development of a cohesive and efficient supply chain. ● Factor conditions – labour, capital and infrastructure. Access to a diverse and skilled pool of labour, low cost capital and reliable infrastructure play a crucial role in delivery of competitive goods and services to local and international markets. The role of Government in this model is essentially one of facilitation and stimulation, encouraging businesses to improve performance and stimulating rivalry through measures like trade practices /anti-trust regulations. Risk, which is also affected in part by government, also affects the operating conditions.

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Firms respond to this operating framework with different strategies: differentiation and/or cost. In the case of traceability systems it seems there is a role for government in encouraging adoption, but it’s a very controlled, not expanded, and minimalist role. The evidence that consumers are willing to pay for traceability systems suggests industry rivalry and competition would be best served by greater reliance on brand development, rather than government mandates. The earlier evidence about willingness to pay underlines the strategic importance of understanding market segments and, in particular, those with a willingness to pay price premiums because most of the NAP industries cannot compete on cost against either traditional industries(with their economies of scale advantage) or developing countries with their labour cost advantage. Unless NAP industries pursue the price premiums of differentiated markets they have an uncertain, if not terminal future. Responding to consumer demands for traceability systems is a strategic opportunity to be taken advantage of or neglected at peril. While a minimalist intervention approach is judged to be most efficient the other extreme of zero intervention seems equally high risk fro a strategic perspective, especially as some of the NAP industries (e.g. poultry) have potential to transmit avian flue to humans and other animals.

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FACTORCONDITIONS

CHART 7.2: PORTER DIAMOND FRAMEWORK

RELATED &SUPPORTINGCONDITIONS

FIRM STRATEGY,STRUCTURE &

RIVALRY

DEMANDCONDITIONS

PORTER STRATEGY OPTIONS

COST LEADERSHIP DIFFERENTIATION

COST FOCUS DIFFERENTIATION FOCUS

RISK

GOVERNMENT

Facilitatorclusters

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8. Survey Results A short international survey was conducted to improve our understanding of international perspectives and opinions on the drivers and impact of livestock traceability systems. Appendix B contains more details and the highlights only are described here, noting that readers should interpret the results with caution because of the small number of responses. Presence of a traceability system in some form is relatively high. Over 80% of respondents indicated their country had a formal livestock traceability system, with over 50% indicating mandatory compliance in some or all activities. Over 50% indicated their system applied to the whole country and over 40% that it applied only to certain regions. Almost 20% indicated there were exemptions of some form for small producers. Imports are included in the traceability systems. Over 50% indicated all animals and meat products including imports are covered by their traceability systems with 17% indicating all animals and meat products, excluding imports are covered and17% indicating exports only are covered. Supply chain coverage About1/3 of respondents indicated their system would cover livestock from birth to the whole carcass in the abattoir only, while 1/3 indicated the system would eventually cover livestock from birth to the end consumer. Types of Devices The common form of identification device is a visual form with more than 50% indicating this was the main technology. Details on Devices Responses were as follows: 25% indicated a property of origin code was on the device; 8% indicated breeder/non-breeder status of the animal; 17% indicated year of birth; 1/3 indicated a unique individual identification number; and 8% indicated some other information. Device Costs Responses were as follows: 1/3 indicated the tag costs less than $US1.00/unit; 2/3 indicated the tag cost $US1.00 or more/unit. Relatively High Level of Dissatisfaction with traceability system In regard to satisfaction with their current traceability systems respondents indicated a high level of dissatisfaction with their systems. This dissatisfaction was judged to be highest among processors with 84% indicating processors to be somewhat dissatisfied, but for producers and consumers there was also thought to be 50% or more dissatisfaction. Opinions on Technology and Functionality: ● 40% agreed strongly and 40% agreed moderately that RFID technology would expand rapidly over the next 5 years. ● 50% agreed moderately that high frequency RFID devices are likely to replace low frequency RFID devices over the next 5 years. ● 2/3 of respondents agreed strongly that it would be better to have read/write capability on the RFID device, rather than just read only.

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● 1/3 of respondents agreed strongly that RFID technology for traceability systems has to be mandatory for it to be fully effective, but 50% indicated no preference either way. ● There was a Polarised view of the choice between RFID and visual tags with 1/3 agreeing strongly with the statement that it doesn't matter whether the ID device is based on RFID technology or a simple visual device, just so long as there is a reliable ID record that enables its history to be traced. In contrast, 17% disagreed strongly with the statement. ● 50% agreed moderately or strongly that all animal species should have mandatory traceability requirements. ● over 80% of respondents agreed strongly with the statement that ideally, the traceability requirements should extend from the use of farm inputs through to the end user. ● 2/3 of respondents agreed strongly with the statement that all imported livestock and meat products should have the same traceability requirements as domestic suppliers. ● 2/3 of respondents also agreed strongly with the statement that mandatory traceability systems are needed to enhance international competitiveness of livestock producing and processing industries. ● while 50% of respondents agreed strongly or moderately with the statement that the main reason for having a mandatory traceability system is to safeguard human health, a relatively high 1/3 disagreed strongly or moderately with the statement. ● over 80% agreed strongly or moderately with the statement that the main reason for having a mandatory traceability system is to help protect the bio-security of supply chains, though 17% disagreed moderately. ● 60% of respondents agreed moderately or strongly with the statement that the cost of compliance with a traceability system is a major factor in deciding whether to have one or not. The general survey results indicate traceability systems are here to stay and likely to expand gradually to cover all animal species over time. It’s of some interest to note that biosecurity and international competitiveness are seen as the main reasons for having an effective traceability system, with human health of lesser concern. It’s also of interest to note the presence of a high level of dissatisfaction across most countries with the existing traceability systems.

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9. Analysis and Discussion of Results From the review of traceability systems in different countries and the survey results it is evident that the adoption of traceability systems is growing, very rapidly in developed economies and also in developing countries, and that the major importing countries will increasingly insist on all imported product being traceable, eventually back to the feed and other input supply sources. The European Food Law and US Bioterrorism Act are setting new standards for traceability and the mood is spreading. China’s new Animal Husbandry Law stipulates that farmers will maintain records of breeding, feed use and other inputs. Other countries are following and exporters are introducing matching requirements. There are several drivers of the growing adoption of livestock traceability systems, but the single most important influence is the introduction of regulations to meet consumer concerns about the health and security of livestock and food in the supply chain. While some animal species such as poultry may be viewed as higher risk groups than others it would be a very high risk strategy to ignore having some form of traceability system for other animals. While either manual or automated traceability systems can be and are used across different countries and animal species a key decision criteria is just how important responsiveness is to a disease event and how effective the different systems are in enabling a quick and reliable response. For some species like poultry it is of prime importance to be able to respond quickly to an event. For other species that are less prone to disease it may be less important, though even here consumer and importing country regulations and perceptions have to be considered. Concerns about bioterrorism would seem to apply equally across all species. Even when the response period is important it does not automatically follow that the solution should be based on the latest and most expensive technology such as RFID. Chicken processors in Australia, for example, claim to be able to respond within 2 hours to a disease event and they simply use a barcode on a box which identifies, among other things, the day of processing, with internal records showing which livestock were actually processed on that day. Poultry processors know the production and feed records for all their stock on any day. Nevertheless, it is also important to recognize the somewhat unique nature of the organizational structure of chicken processing. They are, at least in Australia and most developed economies, typically closely vertically integrated organizations which contract out the live production and actually keep ownership of the birds at all times. Once the organizational structure starts to fragment and ownership of the livestock reverts to producers and their geographic location spread widely then a different scenario emerges. In these circumstances more details may need to be known, at least about the property identification and then about livestock identities, either as a group or an individual, and then livestock movements. The cost of a traceability system is clearly an important consideration and it’s complicated by the fact that consumers may be more willing to pay higher prices for products delivered through high cost traceability systems. It’s not simply a matter of tag costs. The benefits of traceability have to be recognized. A clear understanding of consumer willingness to pay and the exact attributes they are willing to pay for is an essential requirement. Previous research has shown a relatively high willingness to pay for traceability systems that can be shown to be based on high standards of food safety and high standards of animal welfare management. Chart 8.1 sets out a generic decision tree of a conceptual nature for livestock industries considering whether or not and how to set up a traceability system. The first step is to answer the question of just how important the industry considers it is to have an effective traceability system.

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Chart 8.1: Traceability Decision Tree: Where are you positioned now and where do you want to be in the future?

Very Important

Do not know

Quiteunimportant

Importance ofQuick Response to

Events

Adequate privateinvestment in

traceability systems

Under-investmentin traceability

system

Mandatory controlsto enforce investment

& compliance

Ask human &animal health

regulators Examine currentinvestment in traceabilitysystems by your supply

chainTest customer

willingness to pay

Monitor changesin regulations

Monitor changes incustomer

willingness to pay

Monitor practicesof competitors

Limited market failure,strong brands and high

level of capture ofreturns

Market failure, weakbrands, poor regulations

and uncoordinatedsupply chains

Efficientregulatorystructure

Inefficientregulatorystructure

Growing regulations toenforce traceability

Growing demands byleading supply chain

operators at both retailand processing level

Growing consumerwillingness to pay for food

from safe, secure andtraceable supply chains

Rapid changes in technologyincluding prospect for lowcost RFID and improved barcodes

Do nothing and goout of business

Low Risk

High Risk

The selection of technology is or should also influenced by the demands of supply chain requirements. It’s not simply a matter of selecting a technology that satisfies regulators. In this context RFID may have more to offer the chicken meat industry and other large volume products where there are potential efficiency gains from reading large numbers of products at the one time.

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10. Implications for Further Development and Implementation The first step in starting down the traceability path is, at an industry level, to understand broadly what is involved with a traceability system and what the broad costs (investment and operating) and benefits involve (willingness to pay and capturing the willingness to pay). From this position it should be possible for an industry to make some informed judgements about how important traceability systems are to them. As noted above, in tightly organized and vertically integrated supply chains, with a strong brand presence it is more than likely there is already a high level of private investment in complying traceability systems. If there is not then it may be simply a case of investment in training to help people implement the traceability system. In addition, industry members would be likely to gain from developing a voluntary Industry Protocol that describes member undertakings (e.g. compliance with ISO standards, response time of 24 or 48 hours etc.) in terms of traceability systems. ISO 9000 (7.5.2) states, under Quality Management Systems: Fundamental and vocabulary: “The organization should take steps to identify the status of the product/service in so far as concerns the required measurement and verification activities and should, where necessary, identify the product/service using the appropriate means throughout the process. This should apply to all parties involved in the product/service where their interaction has a bearing on the conformity to requirements. When traceability is a requirement the organization should control and record the unique identity of the product and/or service.” The following four components will be required in any credible traceability system: ● Identification: at either individual or batch level. ● Systematic and continuous capturing and reliable recording of data. ● Linkages managed through the supply chain. The traceability system is only as good as the weakest link. ● Communication. The flow of information that satisfies the traceability requirement should accompany the physical flow of good/services. The most limiting constraint to achieving adoption for the NAP industries is likely to be with the vertically less integrated firms which feature a large number of relatively small producers and processors without any brand recognition. It’s suggested a gradual step-by-step approach be adopted for these industries: Step 1: Establish an industry based Traceability Working Group (this would comprise members along the supply chain: feed materials to production, processing and retail). Step 2: Assign responsibilities to members according to expertise. Step 3: Analyse the current situation and outlook for traceability systems among domestic and international markets. Step 4: Initiate willingness to pay market research to identify market segments and precise requirements. Step 5: Identify and examine the organizational (including regulations) and technological options and their respective costs and benefits and make a choice to proceed or not. Step 6: Reach industry agreement on the recommended solutions.

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Step 7. Implement the recommended solutions. Step 8. Monitor, review and revise progress and the solution. It is recommended that RIDC assist the NAP industries to implement the steps outline above. These steps fit within the existing NAP 2006-07 strategies which include: ● to encourage further interaction between enterprises in the value chain by increased liaison, planning and implementing R&D. ● to continue to encourage national and international linkages for industry and research personnel. As a general guideline to further research it is recommended that a preference be given to non-mandatory, market driven measures, which enhance brand development through traceability systems. There are three main problems with mandatory systems: ● lack of integration along the whole supply chain. ● lack of response to technological change. ● lack of accountability for performance outcomes and control of performance. These limitations imply having minimal regulations to achieve the requirements for animal and human health security and improved response to disease outbreaks, but to not distort commercial incentives for private investment in traceability systems. Government interventions should ideally have a neutral impact across the different species with most attention on those species that pose the biggest threat including, for example, poultry. At present, most of the government funds to assist the development of traceability systems have been allocated to beef, sheep, goats and pigs, seemingly on the basis of industry value. Yet it is poultry (including ducks and turkey and squab and wild birds) that constitutes the main threat through avian flu. A recent estimate by McKibbin and Sidorenko (2006) of the impact of an avian flu outbreak indicated the world human death toll could be as high as 142 million (equivalent to 2.2% of the world population), including 40,000 Australians, and $6 trillion in lost annual production. In the context of the threat posed by avian flu there seems to be a compelling case to help the smaller industries improve their capacity to respond to such an event. More generally the impact of the current funding program to improve traceability systems will, to a large extent, only be as good as the weakest link across all species.

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11. Conclusions and Recommendations The industries covered by this investigative report include farmed rabbit, ostrich, emus, dairy sheep, crocodile, water buffalo, camel, yabby, ducks, turkey, squabs, kangaroo and several others. The common feature of these industries is that they are relatively small industries in typically geographically dispersed locations. The main difference about the industries is their vastly different industry structures, ranging from tightly integrated firms with strong brand development and which dominate poultry production through to fragmented supply chains with minimal brand development. These underlying structural features affect significantly the level of private investment in traceability systems. The more fragmented the supply chain the less is likely to be the private investment in a traceability system, unless accompanied by regulations that compel wide participation. Nevertheless, the study finds there is significant potential to improve the capacity of enterprises in the industry so that there is private investment in traceability systems by each of the NAP industries. Mandatory systems are not favoured because of their inevitable detachment from commercial needs which include improved international competitiveness. The European Food Law and US Bioterrorism Act are setting new benchmarks for traceability system requirements and the trend is spreading to both importing and competitor countries. While there are several drivers of the growing adoption of livestock traceability systems, the most important influence are the introduction of regulations to meet consumer concerns about the health and security of livestock and food in the supply chain and the interest in using supply chain technologies and processes to gain a competitive advantage. And although some animal species such as poultry may be viewed as higher risk groups than others because of links with infectious human disease it would be a very high risk decision to ignore having some form of traceability system for other animals, especially with bio-security emerging (which is designed to protect supply chains more generally from faults and interference) as an important driver. Perhaps the most neglected areas of research into traceability systems is the measurement of user willingness to pay. This is a critical requirement for any sustainable business model, yet many countries seem prepared to implement mandatory traceability systems in an ad-hoc way without information on consumer requirements. Instead there is a pre-occupation with technology and using the latest automated devices regardless of benefits and costs. In fact, manual systems can meet the requirements of most regulations providing they are well organized and compliance is uniformly high. The Australian chicken meat industry has a barcode system (still quite advanced but not RFID) and processors indicate they can respond to a disease event within 2 hours. An industry protocol enables this type of system to work. For the future the NAP industries have an opportunity to start gradually developing traceability systems, if they are not already underway. RIRDC can play an important role in the development process by helping industry start the development process and improving their capacity to develop effective, market driven systems. This could start with the formation of NAP Industry Working Groups on Traceability Systems. Initially, it may be practical to include all industries in the working groups, but as more information becomes available then it’s likely that specialist specific-industry sub-groups would be needed. It is recommended that RIDC assist the NAP industries to develop their traceability systems. The development activities fit within the existing NAP 2006-07 strategies which include: ● to encourage further interaction between enterprises in the value chain by increased liaison, planning and implementing R&D. ● to continue to encourage national and international linkages for industry and research personnel. Further funding should also be made available through extending the NLIS or variations of it to other species.

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APPENDICES APPENDIX A. [Special permission to reproduce Client/Server Software Architectures—An Overview", by Darleen Sadoski, GTE © 2005 CARNEGIE MELLON UNIVERSITY is granted by the Software Engineering Institute.] Client/Server Software Architectures—An Overview (courtesy of Carnegie Mellon Software Engineering Institute, Pennsylvania)

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The term client/server was first used in the 1980s in reference to personal computers (PCs) on a network. The actual client/server model started gaining acceptance in the late 1980s. The client/server software architecture is a versatile, message-based and modular infrastructure that is intended to improve usability, flexibility, interoperability, and scalability as compared to centralized, mainframe, time sharing computing. A client is defined as a requester of services and a server is defined as the provider of services. A single machine can be both a client and a server depending on the software configuration. For details on client/server software architectures see Schussel and Edelstein [Schussel 96, Edelstein 94].

This technology description provides a summary of some common client/server architectures and, for completeness, also summarizes mainframe and file sharing architectures. Detailed descriptions for many of the individual architectures are provided elsewhere in the document. Technical Detail Mainframe architecture (not a client/server architecture). With mainframe software architectures all intelligence is within the central host computer. Users interact with the host through a terminal that captures keystrokes and sends that information to the host. Mainframe software architectures are not tied to a hardware platform. User interaction can be done using PCs and UNIX workstations. A limitation of mainframe software architectures is that they do not easily support graphical user interfaces (see Graphical User Interface Builders) or access to multiple databases from geographically dispersed sites. In the last few years, mainframes have found a new use as a server in distributed client/server architectures (see Client/Server Software Architectures) [Edelstein 94]. File sharing architecture (not a client/server architecture). The original PC networks were based on file sharing architectures, where the server downloads files from the shared location to the desktop environment. The requested user job is then run (including logic and data) in the desktop environment. File sharing architectures work if shared usage is low, update contention is low, and the volume of data to be transferred is low. In the 1990s, PC LAN (local area network) computing changed because the capacity of the file sharing was strained as the number of online user grew (it can only satisfy about 12 users simultaneously) and graphical user interfaces (GUIs) became popular (making mainframe and terminal displays appear out of date). PCs are now being used in client/server architectures [Schussel 96, Edelstein 94].

Client/server architecture. As a result of the limitations of file sharing architectures, the client/server architecture emerged. This approach introduced a database server to replace the file server. Using a relational database management system (DBMS), user queries could be answered directly. The client/server architecture reduced network traffic by providing a query response rather than total file transfer. It improves multi-user updating through a GUI front end to a shared database. In client/server architectures, Remote Procedure Calls (RPCs) or standard query language (SQL) statements are typically used to communicate between the client and server [Schussel 96, Edelstein 94].

The remainder of this write-up provides examples of client/server architectures.

Two tier architectures. With two tier client/server architectures (see Two Tier Software Architectures), the user system interface is usually located in the user's desktop environment and the database management services are usually in a server that is a more powerful machine that services many clients. Processing management is split between the user system interface environment and the database management server environment. The database management server provides stored procedures and triggers. There are a number of software vendors that provide tools to simplify development of applications for the two tier client/server architecture [Schussel 96, Edelstein 94].

The two tier client/server architecture is a good solution for distributed computing when work groups are defined as a dozen to 100 people interacting on a LAN simultaneously. It does have a number of limitations. When the number of users exceeds 100, performance begins to deteriorate. This limitation is a result of the server maintaining a connection via "keep-alive" messages with each client, even

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when no work is being done. A second limitation of the two tier architecture is that implementation of processing management services using vendor proprietary database procedures restricts flexibility and choice of DBMS for applications. Finally, current implementations of the two tier architecture provide limited flexibility in moving (repartitioning) program functionality from one server to another without manually regenerating procedural code. [Schussel 96, Edelstein 94].

Three tier architectures. The three tier architecture (see Three Tier Software Architectures) (also referred to as the multi-tier architecture) emerged to overcome the limitations of the two tier architecture. In the three tier architecture, a middle tier was added between the user system interface client environment and the database management server environment. There are a variety of ways of implementing this middle tier, such as transaction processing monitors, message servers, or application servers. The middle tier can perform queuing, application execution, and database staging. For example, if the middle tier provides queuing, the client can deliver its request to the middle layer and disengage because the middle tier will access the data and return the answer to the client. In addition the middle layer adds scheduling and prioritization for work in progress. The three tier client/server architecture has been shown to improve performance for groups with a large number of users (in the thousands) and improves flexibility when compared to the two tier approach. Flexibility in partitioning can be a simple as "dragging and dropping" application code modules onto different computers in some three tier architectures. A limitation with three tier architectures is that the development environment is reportedly more difficult to use than the visually-oriented development of two tier applications [Schussel 96, Edelstein 94]. Recently, mainframes have found a new use as servers in three tier architectures (see Mainframe Server Software Architectures).

Three tier architecture with transaction processing monitor technology. The most basic type of three tier architecture has a middle layer consisting of Transaction Processing (TP) monitor technology (see Transaction Processing Monitor Technology). The TP monitor technology is a type of message queuing, transaction scheduling, and prioritization service where the client connects to the TP monitor (middle tier) instead of the database server. The transaction is accepted by the monitor, which queues it and then takes responsibility for managing it to completion, thus freeing up the client. When the capability is provided by third party middleware vendors it is referred to as "TP Heavy" because it can service thousands of users. When it is embedded in the DBMS (and could be considered a two tier architecture), it is referred to as "TP Lite" because experience has shown performance degradation when over 100 clients are connected. TP monitor technology also provides

• the ability to update multiple different DBMSs in a single transaction

• connectivity to a variety of data sources including flat files, non-relational DBMS, and the mainframe

• the ability to attach priorities to transactions

• robust security Using a three tier client/server architecture with TP monitor technology results in an environment that is considerably more scalable than a two tier architecture with direct client to server connection. For systems with thousands of users, TP monitor technology (not embedded in the DBMS) has been reported as one of the most effective solutions. A limitation to TP monitor technology is that the implementation code is usually written in a lower level language (such as COBOL), and not yet widely available in the popular visual toolsets [Schussel 96]. Three tier with message server. Messaging is another way to implement three tier architectures. Messages are prioritized and processed asynchronously. Messages consist of headers that contain priority information, and the address and identification number. The message server connects to the relational DBMS and other data sources. The difference between TP monitor technology and message server is that the message server architecture focuses on intelligent messages, whereas the TP Monitor environment has the intelligence in the monitor, and treats transactions as dumb data packets. Messaging systems are good solutions for wireless infrastructures [Schussel 96].



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Three tier with an application server. The three tier application server architecture allocates the main body of an application to run on a shared host rather than in the user system interface client environment. The application server does not drive the GUIs; rather it shares business logic, computations, and a data retrieval engine. Advantages are that with less software on the client there is less security to worry about, applications are more scalable, and support and installation costs are less on a single server than maintaining each on a desktop client [Schussel 96]. The application server design should be used when security, scalability, and cost are major considerations [Schussel 96].

Three tier with an ORB architecture. Currently industry is working on developing standards to improve interoperability and determine what the common Object Request Broker (ORB) will be. Developing client/server systems using technologies that support distributed objects holds great promise, as these technologies support interoperability across languages and platforms, as well as enhancing maintainability and adaptability of the system. There are currently two prominent distributed object technologies:

• Common Object Request Broker Architecture (CORBA)

• COM/DCOM (see Component Object Model (COM), DCOM, and Related Capabilities). Industry is working on standards to improve interoperability between CORBA and COM/DCOM. The Object Management Group (OMG) has developed a mapping between CORBA and COM/DCOM that is supported by several products [OMG 96]. Distributed/collaborative enterprise architecture. The distributed/collaborative enterprise architecture emerged in 1993 (see Distributed/Collaborative Enterprise Architectures). This software architecture is based on Object Request Broker (ORB) technology, but goes further than the Common Object Request Broker Architecture (CORBA) by using shared, reusable business models (not just objects) on an enterprise-wide scale. The benefit of this architectural approach is that standardized business object models and distributed object computing are combined to give an organization flexibility to improve effectiveness organizationally, operationally, and technologically. An enterprise is defined here as a system comprised of multiple business systems or subsystems. Distributed/collaborative enterprise architectures are limited by a lack of commercially-available object orientation analysis and design method tools that focus on applications [Shelton 93, Adler 95]. Usage Considerations Client/server architectures are being used throughout industry and the military. They provide a versatile infrastructure that supports insertion of new technology more readily than earlier software designs. Maturity Client/server software architectures have been in use since the late 1980s. See individual technology descriptions for more detail. Costs and Limitations There a number of tradeoffs that must be made to select the appropriate client/server architecture. These include business strategic planning, and potential growth on the number of users, cost, and the homogeneity of the current and future computational environment. Dependencies If a distributed object approach is employed, then the CORBA and/or COM/DCOM technologies should be considered (see Common Object Request Broker Architecture and Component Object Model (COM), DCOM, and Related Capabilities). Alternatives Alternatives to client/server architectures would be mainframe or file sharing architectures. Complementary Technologies Complementary technologies for client/server architectures are computer-aided software engineering (CASE) tools because they facilitate client/server architectural development, and open systems (see COTS and Open Systems--An Overview) because they facilitate the development of architectures that improve scalability and flexibility.



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Appendix B. Survey Report: Livestock Traceability This survey was distributed as an automated on-line questionnaire to 28 people in a range of countries with the aim of improving our understanding of international perspectives and opinions on the drivers and impact of livestock traceability systems. While the response was only 25%, and not every respondent answered every question, the responses were mainly from informed people with influence in the policy development process, often decision makers. The results might be interpreted more as the outcome of a focus group, rather than a statistically significant sample. Nevertheless, readers should interpret the results with caution because of the small number. The questions and aggregated responses are shown only here. Some questions and responses could not be shown because of an undertaking to treat all responses with total confidentiality and to not reveal any respondents identity, directly or indirectly. 1. Does your country or do leading supply chain operators in it have a livestock traceability system (s)? [Traceability is the ability for the retrieval of the history and use or location of an article or an activity through a registered identification] Response: 86% indicated YES and 14% indicated NO. 2. If you answered YES for Q2, what type of enforcement is used for the traceability system? Response: 58% indicated compliance is mandatory and 42% indicated it was market driven.

3. Is there a national code or protocol for management practices and operations for the traceability system in your country? Response: 50% indicated there is a national protocol and 50% indicated no national protocol exists. 4. If the traceability system is regulated by government, does it apply to the whole country or certain regions/districts only? Response: 57% indicated the traceability system applies to the whole country and 43% indicated it applies to certain regions only. 5. If there is a mandatory traceability system in place, are any producers exempt from using traceability devices or tags in your country? Response: 67% indicated no exemptions; 17% indicated exemptions for small producers; and 17% indicated some other basis for exemptions. 6. If more than one species is covered by the traceability system in your country are there different rules (e.g. like notification of a health problem) for different species? Response: 43% indicated all species are treated the same; 14% indicated cattle are treated differently to other species; 14% indicated poultry are treated; differently to other species; 14% indicated pigs are treated differently; and 14% indicated some other species are treated differently.

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7. What types of livestock and meat products are covered now by the mandatory traceability system? [tick one box only] Response: 51% indicated all animals and meat products including imports are covered; 17% indicated all animals and meat products, excluding imports are covered; 17% indicated exports only are covered; and 17% indicated some other coverage basis. 8. What types of livestock and meat products are planned to be covered by the traceability system in future? [tick one box only] Response: 50% indicated all livestock and meat products, including imports, would be covered in future; 17% indicated all livestock and meat products, excluding imports, would be covered in future; and 33% indicated some other arrangement would apply. 9. Supply chain coverage. How far through the supply chain does the traceability system extend? Response: 1/3 indicated the system would cover livestock from birth to the whole carcass in the abattoir only; 1/3 indicated the system would cover livestock from birth to the end consumer; and 1/3 indicated some other coverage. 10. Which type of technology is used in the livestock identification device of the traceability system in your country? Response: 50% indicated a visual device (e.g. tail tag) only is used; and 28% indicated an RFID device is used; and 22% indicated some other device. 11. What information is contained on or can be contained on the traceability device used in your country? Response: 25% indicated property of origin; 8% indicated breeder/non-breeder status of the animal; 17% indicated year of birth; 1/3 indicated a unique individual identification number; and 8% indicated some other information. 12. What is the current cost to the producer of the traceability device or tag used? Response: 1/3 indicated the tag costs less than $US1.00/unit; 2/3 indicated the tag cost $US1.00 or more/unit. 13. In regard to satisfaction with their current traceability systems respondents indicated a high level of dissatisfaction with their systems. This dissatisfaction was judged to be highest among processors with 84% indicating processors to be somewhat dissatisfied, but for producers and consumers there was also thought to be 50% or more dissatisfaction. 14. Opinions on technology adoption and other change. ● 40% agreed strongly and 40% agreed moderately that RFID technology would expand rapidly over the next 5 years. ● 50% agreed moderately that high frequency RFID devices are likely to replace low frequency RFID devices over the next 5 years. ● 2/3 of respondents agreed strongly that it would be better to have read/write capability on the RFID device, rather than just read only.

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● 1/3 of respondents agreed strongly that RFID technology for traceability systems has to be mandatory for it to be fully effective, but 50% indicated no preference either way. ● 1/3 agreed strongly with the statement that it doesn't matter whether the ID device is based on RFID technology or a simple visual device, just so long as there is a reliable ID record that enables its history to be traced, but 17% disagreed strongly with the statement. ● 50% agreed moderately or strongly that all animal species should have mandatory traceability requirements. ● over 80% of respondents agreed strongly with the statement that ideally, the traceability requirements should extend from the use of farm inputs through to the end user. ● 2/3 of respondents agreed strongly with the statement that all imported livestock and meat products should have the same traceability requirements as domestic suppliers. ● 2/3 of respondents also agreed strongly with the statement that mandatory traceability systems are needed to enhance international competitiveness of livestock producing and processing industries. ● while 50% of respondents agreed strongly or moderately with the statement that the main reason for having a mandatory traceability system is to safeguard human health, a relatively high 1/3 disagreed strongly or moderately with the statement. ● over 80% agreed strongly or moderately with the statement that the main reason for having a mandatory traceability system is to help protect the bio-security of supply chains, though 17% disagreed moderately. ● 60% of respondents agreed moderately or strongly with the statement that the cost of compliance with a traceability system is a major factor in deciding whether to have one or not.

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APPENDIX C: Estimated Costs of a Radio Frequency Identification (RFID) System [Investment and operating costs only]

Average herd size, number of head 250 Interest rate, % 8.0% RFID Components Initial cost, $ RFID Cost

Description Total Per Head Useful life, yrs

Salvage value, $

Annual Cost, $

Percent to RFID Total

Per Head

eID Transponder (electronic tag) Electronic tags --- $2.25 --- --- $585 100% $585 $2.34 --- --- --- Tags for cows (life-time purchase) --- $2.25 5 0 $141 100% $141 $0.56 Electronic reader Wand/stick reader $400 3 0 $155 100% $155 $0.62 Data accumulator Laptop computer $800 3 200 $249 50% $124 $0.50 Software / web-based analysis and storage Computer software $700 5 0 $175 100% $175 $0.70 Other Internet access $480 --- --- $499 25% $125 $0.50 Subscriptions/upgrade fees $250 --- --- $260 100% $260 $1.04 Labor $500 --- --- $520 100% $520 $2.08 --- --- Total annual cost $2,086 $8.34

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Total Annual RFID System Cost, $/head Size of Herd, percent of base RFID Components Base 25% 50% 75% 100% 250% 375% 500% Size of Herd, number of head Description 250 63 125 188 250 625 938 1250 eID Transponder (tag) Electronic tag $2.34 $2.34 $2.34 $2.34 $2.34 $2.34 $2.34 $2.34 Tags for cows (one-time purchase) $0.56 $0.56 $0.56 $0.56 $0.56 $0.56 $0.56 $0.56 Electronic reader Wand/stick reader $0.62 $2.46 $1.24 $0.83 $0.62 $0.25 $0.17 $0.12 Data accumulator Laptop computer $0.50 $1.97 $1.00 $0.66 $0.50 $0.20 $0.13 $0.10 Software/ web-based analysis and storage Computer software $0.70 $2.78 $1.40 $0.93 $0.70 $0.28 $0.19 $0.14 Other Internet access $0.50 $1.98 $1.00 $0.66 $0.50 $0.20 $0.13 $0.10 Subscriptions/upgrade fees $1.04 $4.13 $2.08 $1.38 $1.04 $0.42 $0.28 $0.21 Labor $2.08 $8.25 $4.16 $2.77 $2.08 $0.83 $0.55 $0.42 Total annual cost $8.34 $24.49 $13.78 $10.14 $8.34 $5.08 $4.35 $3.99

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Glossary ANIMAL HEALTH AUSTRALIA. Animal Health Australia (AHA) (www.animalhealthaustralia.com.au) is a non-profit public company established by the Australian, state and territory governments and major national livestock industry organizations. The company's mission is to ensure that the national animal health system delivers a competitive advantage and preferred market access for Australia's livestock industries. AUSTRALIAN QUARANTINE & INSPECTION SERVICE. AQIS — the Australian Quarantine and Inspection Service — is part of the Australian Government Department of Agriculture, Fisheries and Forestry. AQIS provides quarantine inspection for international passengers, cargo, mail, animals, plants and animal or plant products arriving in Australia, and inspection and certification for a range of agricultural products exported from Australia. AUSVET. AusVet was established in early 1996 to be a leader primarily in the changing spectrum of animal health service delivery through its specialist expertise in epidemiology and program management (http://www.ausvet.com.au/). AVIAN INFLUENZA. Avian influenza, or “bird flu”, is a contagious disease of animals caused by viruses that normally infect only birds and, less commonly, pigs (http://www.who.int/csr/disease/avian_influenza/avian_faqs/en/index.html). Avian influenza viruses are highly species-specific, but have, on rare occasions, crossed the species barrier to infect humans. In domestic poultry, infection with avian influenza viruses causes two main forms of disease, distinguished by low and high extremes of virulence. The so-called “low pathogenic” form commonly causes only mild symptoms (ruffled feathers, a drop in egg production) and may easily go undetected. The highly pathogenic form is far more dramatic. It spreads very rapidly through poultry flocks, causes disease affecting multiple internal organs, and has a mortality that can approach 100%, often within 48 hours. Influenza A viruses have 16 H subtypes and 9 N subtypes. Only viruses of the H5 and H7 subtypes are known to cause the highly pathogenic form of the disease. However, not all viruses of the H5 and H7 subtypes are highly pathogenic and not all will cause severe disease in poultry. On present understanding, H5 and H7 viruses are introduced to poultry flocks in their low pathogenic form. When allowed to circulate in poultry populations, the viruses can mutate, usually within a few months, into the highly pathogenic form. This is why the presence of an H5 or H7 virus in poultry is always cause for concern, even when the initial signs of infection are mild. BARCODE A machine readable picture of information on a product surface. They are read by barcode readers or optical scanners. BOVINE SPONGIFORM ENCEPHALOPATHY (BSE). Transmissible spongiform encephalopathies (TSEs) are a family of diseases of humans and animals characterized by spongy degeneration of the brain with severe and fatal neurological signs and symptoms (http://www.who.int/zoonoses/diseases/bse/en/). In animals, scrapie is a common disease in sheep and goats. Mink and North American mule deer and elk can contract TSEs. Bovine spongiform encephalopathy (BSE) is also a TSE, affecting a number of species (cattle, human, cats, some types of animals in 300 settings).BSE is a transmissible, neuro-degenerative fatal brain disease of cattle. The disease has a long incubation period of 4-5 years and it is fatal for cattle within weeks to months of its onset. The nature of the BSE agent is still being debated. Strong evidence currently available supports the theory that the agent is composed largely, if not entirely, of a self-replicating protein, referred to as a prion. It is transmitted through the consumption of BSE-contaminated meat and bone meal supplements in cattle feed.

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BROUGHT ON CATTLE. This is an NLIS term and refers to cattle that are on a producer’s property, but were not born there. Brought on cattle are sometimes referred to as ‘introduced’ cattle. CREUTZFELDT-JAKOB DISEASE (vCJD) is a rare, degenerative, invariably fatal brain disorder. Typically, onset of symptoms occurs at about age 60. (http://www.ninds.nih.gov/disorders/cjd/cjd.htm). There are three major categories of CJD: sporadic CJD, hereditary CJD, and acquired CJD. There is currently no single diagnostic test for CJD. The first concern is to rule out treatable forms of dementia such as encephalitis or chronic meningitis. The only way to confirm a diagnosis of CJD is by brain biopsy or autopsy. In a brain biopsy, a neurosurgeon removes a small piece of tissue from the patient's brain so that is can be examined by a neurologist. Because a correct diagnosis of CJD does not help the patient, a brain biopsy is discouraged unless it is need to rule out a treatable disorder. While CJD can be transmitted to other people, the risk of this happening is extremely small. vCJD is strongly linked with exposure to BSE DEVICE. Devices are used to identify and track a product or livestock births, deaths and movements and can be read electronically by an approved reader. An approved or compatible device could be in the form of an electronic ear tag or rumen bolus/visual ear tag combination. EAR TAG. NLIS approved ear tags have a unique number including the Property Identification Code (PIC) and are fitted with a microchip allowing them to be read by electronic readers. Ear tags come in two colours signifying when they should be used: White breeder tags – these are used for cattle that have been have bred and that are still on the breeder’s property. Orange post-breeder tags – use these for cattle you have purchased and that are not already identified with an NLIS device. EPC GLOBAl, a subsidiary of GS1, and is a not-for-profit organization entrusted by industry to establish and support the EPCglobal Network™ as the global standard for real-time, automatic identification of information in the supply chain of any company, anywhere in the world. The EPCglobal Network combines RFID technology, existing communications network infrastructure, and the EPC (a number for uniquely identifying an item) to enable accurate, cost-efficient visibility of information in the supply chain. The end result helps organizations be more efficient, flexible, and responsive to customer needs. For more information about EPCglobal visit: www.EPCglobalinc.org. FOOD STANDARDS AUSTRALIA NEW ZEALAND jointly run the Imported Food Inspection Scheme with AQIS. FSANZ develops food risk assessment policy and AQIS has operational responsibility for inspection and sampling. GLOBAL TRADE IDENTIFICATION NUMBER. This initiatives from the UCC began on January 1, 2005. It is the "fourteen digit U.P.C." In brief this extended the then existing 8 or 12-digit UPC barcode, to 13 and 14-digit barcodes. HDX Half Duplex, which enables the electronic transmission of data in both directions on a signal carrier (such as an RFID device), but only one direction at a time. The possibly more familiar two-way radio uses HDX, with one party speaking and the other listening. GS1. GS1 is a global not-for-profit organisation that creates, develops and manages the EAN•UCC standards jointly with the Uniform Code Council, one of its Member Organisations. These are open, global, multi-sectoral information standards, based on best business practices. By driving their implementation, GS1 and its Member Organisations play a leading role in supply and demand chain management improvement worldwide. For more information on EAN International, please visit: www.GS1.org.

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INTERNATIONAL STANDARDS ORGANIZATION. The world's largest developer of standards. Although ISO's principal activity is the development of technical standards, ISO standards also have important economic and social repercussions. ISO standards make a positive difference, not just to engineers and manufacturers for whom they solve basic problems in production and distribution, but to society as a whole (www.iso.org). . IRREGULAR STATUS. ‘Irregular status’ is an NLIS term and refers to a device that has become corrupted due to one of the following factors: It has been lost It has been damaged It is on a beast registered as stolen It is on a beast that has lost lifetime traceability National Livestock Identification System. The NLIS is Australia’s system for the identification and tracing of livestock. It is a permanent, whole of life identification system that enables individual animals to be tracked from property of birth to slaughter for food safety, product integrity and market access purposes. NLIS provides the facility for cattle movements to be logged in a secure central database. It also provides other benefits such as allowing carcass feedback from abattoirs to be viewed by producers. NLIS ID (visual number). An approved NLIS device has two numbers associated with it: ● The NLIS number (visual number) is printed on the electronic ear tag or on the management ear tag matching an NLIS rumen bolus. ● The NLIS ID indicates the property where the animal was identified and whether that was the property of birth or not. It also identifies the manufacturer of the device, the year of manufacture, whether it is an electronic ear tag or rumen bolus, and an individual animal identification number. National Vendor Declaration. The NVD is a voluntary food safety declaration completed by the person responsible for the husbandry of the stock. Property Identification Code (PIC) is a unique number identifying your property. It is issued by the State Departments of Agriculture in Australia. This is the same number as what was previously the producer’s tail tag number. The PIC is related to an individual property and the number can not be used on other properties owned by a producer unless they are amalgamated under the one PIC. Radio Frequency Identification (RFID). An RFID tag is a small item, with an embedded silicon chip and antenna, which can be incorporated into or attached to an animal, person or product. The silicon chip and antenna enables the tag to automatically receive and respond to queries from an RFID receiver. Passive tags, like those used by NLIS, require no internal source of power in the tag. Active tags (sometimes called beacons) do require an internal power source. RFID number (electronic number). In Australia an approved NLIS device has two numbers associated with it: ● The RFID (Radio Frequency Identification Device) number, also referred to as the electronic number and is the number scanned by a reader. ● The NLIS number (visual number), which is printed on the electronic ear tag or on the management ear tag matching an NLIS rumen bolus. The NLIS ID indicates the property where the animal was identified and whether that was the property of birth or not. It also identifies the manufacturer of the device, the year of manufacture, whether it is an electronic ear tag or rumen bolus, and an individual animal identification number. These two numbers are unique for each device and are linked in the NLIS database.

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RUMEN BOLUS. A rumen bolus is used as an alternative to an RFID tag for identifying cattle. A rumen bolus is a capsule that is inserted into the animal from three months of age. After application, the bolus comes to rest in the reticulum for the life of the animal. The bolus contains an electronic transponder that can be read electronically, and is issued with a matching non-electronic ear tag for manual reading and/or visual confirmation that bolus has been installed. SAFEMEAT. The Australian Government has established a partnership body, Safe Meat, to ensure that red meat products achieve the highest standards of safety and hygiene from farm to consumer and to provide strategic direction and policy advice to the red meat industry. Every sector of the red meat production chain in Australia is represented on Safe Meat, from cattle and sheep producers, to processors, to meat and livestock exporters, to government representatives (http://www.safemeat.com.au). TAG. The term ‘tag’ as used in the NLIS database refers to an NLIS approved beast identification device, being either an electronic ear tag or rumen bolus/visual ear tag combination. TRACEABILITY SYSTEM Defined in ISO 8402 as the ability for the retrieval of the history and use or location of an article or an activity through a registered identification. TRACING. Retrieval of information to reconstruct the history of a shipment, package, carton, container, consignment etc. Tracing is viewed as the capacity to follow-up trade items in both a qualitative and quantitative way from both a space and time perspective. TRACKING. Retrieval of the actual status of a shipment, package, carton, container, consignment etc. Tracking is viewed as the capability to follow the path of an item through every stage of the supply chain. Items are typically tracked for availability, inventory management and logistical purposes (EAN 2002) TRANSMISSIBLE SPONGIFORM ENCEPHALOPATHIES (TSE). See BSE above. UNIFORM PRODUCT CODE. The Universal Product Code was the first bar code symbology widely adopted (http://www.adams1.com/pub/russadam/upccode.html). Its birth is usually set at April 3, 1973, when the grocery industry formally established UPC as the standard bar code symbology for product marking. Foreign interest in UPC led to the adoption of the EAN code format, similar to UPC, in December 1976. The Global Trade Item Number initiatives from the UCC began on January 1, 2005. This is the "fourteen digit U.P.C." In brief this extended the then existing 8 or 12-digit UPC barcode, to 13 and 14-digit barcodes. UHF GENERATION 2 STANDARD. The EPCglobal UHF Generation 2 protocol, a consensus standard for a global UHF RFID standard built by more than 60 of the world’s leading technology companies, describes the core capabilities required to meet the performance needs set by the end user community (http://www.epcglobalinc.org/). The UHF Generation 2 standard will be used as a base platform upon which standards-based products and future improvements will be built. An EPCglobal standard ensures interoperability and sets minimum operational expectations for various components in the EPCglobal Network™, including hardware components. While EPCglobal oversees interoperability and conformance testing of standards-based products, the actual development of these products comes from leading solution providers around the globe. WAYBILL. A waybill (or Traveling Stock Statement (TSS)) is required to accompany stock movements in most States of Australia. It relates to ownership and description of the livestock as well as their source and destination. In some cases, the NVD and waybill may be combined into one document. WILLINGNESS TO PAY. The amount a user is willing to pay for a specified of unit of a particular good or service. It is calculated by response to stated or revealed preferences. Particular care is required in questioning to avoid bias.

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References ABC 2003, ‘Cattle duffers steal rare Bazadais stock’, The World Today, 12 June ABC 2006, ‘Beef producers seek independent NLIS audit’, ABC Newsonline, July 2nd, http://www.abc.net.au/news/newsitems/200607/s1676602.htm ABC 2006, ‘Charleville rides goat, roo boom’, ABC Landline, 23 July http://www.abc.net.au/landline/content/2006/s1692247.htm Alberta Agriculture 2006, ‘Reading Rate of Beef Cattle Radio Frequency Identification Tags – Frequently Asked Questions’, Contribution by Basarab J., Erickson L., Kopp J., Claypool K., Milligan D. and Smith B. Department of Agriculture, Food and Rural Development, Alberta Alliance Consulting & Management 2004, ‘Cost analysis of NLIS compliance for beef producers’, 4 May, Report for Meat & Livestock Australia Australia and New Zealand Food Regulation Ministerial Council 2005, ‘Principles and Protocols for the Development of Food Regulation Policy Guidelines’, Produced by the Food Regulation Standing Committee, Principles and Protocols Working Group For the Australia and New Zealand Food Regulation Ministerial Council, 31 March 2005 Department of Agriculture, Fisheries and Forestry 2005, ‘Primary Industries Ministerial Council Meeting’, Record and Resolutions of the 8th Meeting in Darwin, 14 April Animal Health Australia 2003, ‘Policy Paper: Livestock Identification and Traceability: Final’, Animal Health Australia, Deakin, Canberra Bowles D., Paskin R., Gutierrez M. and Kasterine A. 2005, ‘Animal welfare and developing countries: opportunities for trade in high-welfare products from developing countries’, Rev.sci. tech. Off.int. Epiz. 24 (2), 783-790 Childs L. 2006, ‘RFID Searches for a Home on the Range’. ChainLink Research June 20. Clemens R. 2003, ‘Meat Traceability in Japan’, Review Paper (IAR 9:4:4-5), Centre for Agricultural and Rural Development, Iowa State University Cooke J.A. 2005, ‘Wal-Mart’s suppliers are finding they can win the RFID race by taking it slowly and moving ahead, one step at a time’, Logistics Management, February 1 Dickinson D.L. and Bailey D. 2005, ‘Experimental Evidence on Willingness to Pay for Red Meat Traceability in the United States, Canada, the United Kingdom and Japan’, Journal of Agricultural and Applied Economics December 2005 EAN International 2002, ‘Traceability of Fish Guidelines’, Application of EAN.UCC Standards in implementing EU legislation and business requirements regarding consumer information and traceability. 7 November EAN UCC Traceability Implementation, February 2003 EC Regulation No 178/2002 of the European Parliament and the Council of the 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food

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