Information Technology
in the Food System:
Identity Preservation and
Traceback
Thomas L. Sporleder
[sporleder.1@osu.edu]
Prepared for E-Commerce: Impacting the Way We Do
Business Conference, Nashville, TN, October 1-2, 2001
Information Technology
and E-Commerce
Information technology (IT) is a
broad class of technologies that
facilitate information collection,
processing, and dissemination
E-Commerce is a subset of IT
designed especially for buying
and/or selling
The Dynamics
New agricultural and food supply
chain
 Emergence
of coordinated systems
 Differentiation of products and
services
 Rise of intangible social attributes
Specific Dynamics of
Global Food System
Genetic engineering
(biotechnology)
Food safety
Animal welfare
Genetic Engineering
Creates small
specialized niche
markets
Identity preservation
and traceback
necessary component
of these markets
Food Safety “Events”
Foot-and-mouth
disease (FMD)
Bovine
spongiform
encephalopathy
(BSE)
StarLink [Cry9C
protein in Bt corn]
Foodborne Illness:
The Big Four
Salmonella
Listeria
E. Coli
Campylobacter
jejuni
Animal Welfare
Animal welfare is defined as
ensuring improved protection and
respect for the welfare of animals
across all species of meat animals
Areas under development: pen
size, slaughter conditions,
treatment during transport
Animal Welfare
Current concerns relative to meat
animals are similar to the
development of “dolphin-safe tuna”
some time ago
Federal regulations were
developed for dolphin-safe tuna
Specific Examples of
Information Requirements
What were the slaughter conditions
for this meat animal?
How much pen space did the layer
have that produced this egg?
Was this corn genetically
enhanced?
Is this soybean oil GM-free?
Problem for the Current
Food System
This information is NOT usually
collected or processed at various
points in the marketing channel
This information is NOT usually
passed along downstream as the
product moves toward the final
consumer
Dynamics Relative to IT
All these “events” lead to the same
requirement of the food system:
enhanced vertical information flow
How will this get done and who will
do it?
Complex problem with multiple
solutions
Consequences
of the Dynamics
Rapid consolidation
in the global food
system
Less commingling of
commodities but
more and higher cost
segregation and
vertical tracking
Consequences
of the Dynamics
Food system becomes more
globalized
Need for increased vertical
information flow and cooperation
Nomenclature by
Agricultural Commodity
Meat animals: Traceback,
transparency, and assurance (TTA)
Food and Feed Grains: Identity
preservation (IP)
TTA
Traceback is the ability to know
specific information on various
characteristics of the product (i.e.
feeding protocols, genetic
background, production origin)
TTA
Transparency is
 The
extent of coverage from
upstream industries to downstream
industries within the supply chain
 How apparent the information is to
downstream industries
TTA
Assurance is
 Quality
(is it palatable or nutritious?)
 Food safety (is it safe to eat?)
Identity Preservation
The ability to know specific information on
various characteristics of the commodity
and value added product produced from
the commodity
For example: genetic modification,
production origin, production protocols
(e.g. organic or natural)
Alternatives for Who Might
Collect, Process, and
Disseminate Information
Private firms
Individual firms in
the supply chain
 Third party firms

Government
Firm Strategy Problem
Signaling issue: how to
accomplish?
 Build
trust
 Bi-directional
 Firm
 Society
Consumer
Firm
Evaluating Alternative
Signaling Mechanisms
How can firms decide among the
alternatives?
 Question
of Trust
 Question of Efficiency
 Question of Risk Sharing
 Question of Manageability
Four Broad
Managerial Alternatives
Third Party
 Government
Unilateral
 Multilateral

 Private
Firm Name and Location
System Coverage
Name
Headquarters
Traceback
Transparency
SO.VIBA
France
Producer
Genetic
Solutions
Australia
IdentiGEN
Other Features
Assurance
Currently
Operating in the
U.S.
Primary
Commodity
Coverage
Producer,
processor,
distributor
No
Pork, beef
Producer
Processor,
distributor
No
Beef
Ireland
Producer
Processor,
distributor
Licensing
agreement w/
Silliker
Laboratories
Beef
AgInfoLink
Global, Inc
British Virgin
Islands
Producer
Processor,
distributor
Yes
Beef initially
eMerge
Interactive
Florida
Conception
to harvest
Processor,
distributor
Yes
Beef, pork
Identity
Preserved
South Dakota
Producer
Yes
Crops
MediGenomix
Germany
Producer
Processor,
distributor
No
Beef
Encos
New Zealand
Producer
Processor,
distributor
No
Crops and
livestock
Farm
Four Broad
Managerial Alternatives
Branding
 Intermediation
Direct (certification)
 Vertical
 Co-branding
 Reputation
 Warranties
 Advertising

Four Broad
Managerial Alternatives
Insurance and/or Bonding
 “Passive”
firm strategy
 Assures in a legal sense; minimizes
financial culpability, especially
regarding food safety
 Does nothing relative to TTA or IP
Four Broad
Managerial Alternatives
Supply Chain Coordination
 Vertical
Integration
 Strategic Alliance
 Contracting
TTA Example: The
Swine-Pork Subsector
Where in the system and
how can information be
collected?
Who will collect it?
How will it be processed?
How will it be
disseminated?
Schematic of Swine-Pork
Marketing Channel
FAFH
Market Hog
Producer
Slaughter and
Processing To
Boxed Pork
Processing
Final
Consumer
Retail
TTA: What Information?
FAFH
Market Hog
Producer
Slaughter and
Processing To
Boxed Pork
Processing
Final
Consumer
Retail
Lot Tracking
DNA Tracking
TTA: Where and
What Information?
Data
Intercept
Pig
Champ
DNA
Lot
Info
Market Hog
Producer
FAFH
Slaughter and
Processing To
Boxed Pork
Processing
Final
Consumer
Retail
Lot Tracking
DNA Tracking
TTA in the Global
Food System
Comparative
analysis by
country indicates
some countries
are more
advanced than
the United States
TTA in Swine, U.S.
Assurance- Quality
Assurance- Food Safety
Traceback
Producer
Processor
Distributor
Transparency
TTA in Swine, U.K.
Assurance-Quality
Assurance-Food Safety
Traceability
Producer
Processor
Distributor
Transparency
TTA in Swine, Canada
Assurance- Food Safety
Transparency
Assurance-Quality
Producer
Processor
Distributor
Taceback
TTA in Swine, Japan
Assurance-Quality
Assurance-Food Safety
Traceability
Producer
Processor
Distributor
Transparency
TTA in Swine, Denmark
Assurance-Quality
Assurance-Food Safety
Traceability
Producer
Processor
Distributor
Transparency
TTA in Swine, ANZ
Assurance-Quality
Assurance-Food Sefety
Traceability
Producer
Processor
Distributor
Transparency
Conclusions and Implications
for the Global Food System
Conclusions
IP And TTA are core IT and E-Commerce
issues
E-Commerce trend is consistent with the
information need if IP and TTA
Firm strategy relative to IP and TTA is as
a tactical question as well as a policy
question
Obsolescence of U.S. Government Role
Conclusions
Obsolescence of USDA Government
Role
 Slow
 Best
at setting minimums for standards
 Current pattern is relative to
commodities, not food products
FDA more modern but centered on
safety
Conclusions
U.S. government compartmentalized
and consequently specialized
 USDA
 FDA
 EPA
Makes it difficult to take aggregate
supply chain approach for regulation
and standards setting
Conclusions
Broad-Based Third Party Limited in
the Long-Term
 High
transaction costs
 Conducive to commoditization of
Attributes, not specialized attributes
 Inconsistent with rent seeking and
innovation
Key Implications
Food production and processing will
generate more information
TTA and IP will be more expensive than
the current system
Consumers “right-to-know” will
dramatically influence IT and ECommerce in the global food system
Agribusiness
and
Farm Income Enhancement
Programs