Livestock Traceability Situation Analysis...2005/09/02 · Situation Analysis 2-Sep-2005 Page 8 of 82 2. Market access for some New Zealand meat products at the commercial level is

Livestock Traceability

Situation Analysis

Prepared for New Zealand Trade and Enterprise

Edited By

Bridgit Hawkins, MediaLab Limited

Andrew Cooke, Rezare Systems Limited


Situation Analysis 2-Sep-2005 Page 2 of 82

Acknowledgements

This report was prepared by Innovation Waikato Limited and Medialab Limited.

It was funded by New Zealand Trade and Enterprise, with contributions from:

♦ Telecom New Zealand Limited

♦ Livestock Improvement Corporation

♦ AgResearch Limited

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Contents

1 Executive Summary................................................................................................. 5

2 Introduction............................................................................................................. 6

2.1 World beef and veal trade ...........................................................................8

2.2 The Precautionary Principle ..................................................................... 10

2.3 Why implement traceability?.....................................................................11

2.4 New Zealand Working Group ....................................................................11

2.5 Report structure ........................................................................................ 12

2.6 Contributors .............................................................................................. 12

2.7 Definitions ................................................................................................. 13

2.8 References ................................................................................................. 14

3 Biosecurity Comparisons .......................................................................................15

3.1 What is required from traceability?.......................................................... 15

3.2 Comparing traceability systems................................................................ 15

3.3 Components of tracking and tracing systems ...........................................17

3.4 Process and information ............................................................................17

3.5 Country Comparisons ...............................................................................20

3.6 References .................................................................................................42

4 Market Perceptions ............................................................................................... 45

4.1 Introduction ..............................................................................................45

4.2 Legislative Requirements..........................................................................45

4.3 Market Perceptions ................................................................................... 47

4.4 Consumer role in traceability ...................................................................50

4.5 NZ Customers Study .................................................................................54

4.6 References .................................................................................................56

5 ICT Opportunities.................................................................................................. 59

5.1 Introduction ..............................................................................................59

5.2 Identification Methods..............................................................................59



5.3 Radio Frequency Identification ................................................................ 61

5.4 Biometric Procedures................................................................................66

5.5 Smart Devices............................................................................................ 67

5.6 Telecommunications .................................................................................69

5.7 Software solutions .....................................................................................70

5.8 Centralised databases................................................................................ 72

5.9 References ................................................................................................. 73

6 Biopharming Implications .................................................................................... 74

6.1 Biopharming and Compliance .................................................................. 74

6.2 TechniFarming – broader than Biopharming.......................................... 76

Appendix A Market Research Traceability Questionnaire, May 2005 ..................... 78



1 Executive Summary

In 2004, Innovation Waikato and the Farmgate group proposed a programme of

research and collaborative development activities around traceability and integrated

farm management systems. Established in 2003, the Farmgate group includes

MediaLab Limited, Fonterra, Wool Equities, Massey University, and Telecom New

Zealand. The programme of work has been funded by New Zealand Trade and

Enterprise, with matching funding from industry.

In April 2005, 38 representatives of government, regulatory, industry and

commercial entities operating across New Zealand in the agricultural sector met in

Hamilton to refine and extend our vision for the project. It became apparent that

there were a number of different understandings of both terminology, and the

specific drivers and implications of traceability for the New Zealand farming

industry.

This analysis of current state in New Zealand and overseas addresses the need for a

common understanding of both terminology and drivers.

In July 2005 the Animal Identification and Traceability Working Group proposed a

livestock tracking framework for New Zealand. This report complements that work,

providing further detail and comparison with overseas nations.

Our authors also explore the difference between the biosecurity drivers of

traceability and the perceptions of quality and safety in different markets.

Traceability systems may provide competitive advantage in some markets, although

this needs to be balanced against the cost of implementation. In comparison, the

potential for a disease outbreak to close access to all markets is a different order of

magnitude. Providing sufficient breadth, depth, and response times to mitigate this

biosecurity risk is an important role for a traceability system.

Finally, this report explores the technologies involved in traceability systems and in

more specialist uses such as Biopharming.

Our conclusion is that New Zealand has been well placed in the past as a leader in

food safety and biosecurity. In recent years our international competitors and

customers have begun to put in place significantly more comprehensive systems,

and this process is accelerating.

While there are now many technologies available to assist with identification and

traceability, it is important to define an architecture that supports more than just

the technologies available today. At the same time we need to leverage today’s



technologies effectively in order to put in place an efficient system that will continue

to deliver advantage to New Zealand.

2 Introduction

Traceability, as a term, is loosely used to cover many aspects of food safety

assurance and in New Zealand is often enmeshed in issues of individual animal

identification. Animal identification is but one component of meat and milk

traceability.

Traceability is the more comprehensive concept of tracking the movement of

identifiable products through the production, processing and marketing chain.

Animal identification and traceability are not in themselves food safety, animal

disease prevention, quality assurance or country of origin labelling programmes.

However, they may be important components of such programmes.

In its broadest sense comprehensive traceability requires knowledge of the

immediate production and processing environment the product was exposed to, the

status and integrity of the wider environment, the ‘events’ the product underwent

and any inputs into the environment or the ultimate product. The diagram below

schematically describes the relationship between these factors in the New Zealand

food production business.

Figure 1 New Zealand food production context

Inputs Inputs

Retail Consumer Farm Processing



In the mid-1990s Britain (and, indirectly, the European Union) suffered a massive

breakdown in consumer confidence in their food system as a result of the bovine

spongiform encephalopathy (BSE) crisis. This breakdown was attributable to the

fact that governments and scientists had assured consumers that no connection

existed between BSE and human disease. When the probable connection between

BSE and variant Creutzfeldt - Jakob disease (vCJD) became apparent, literally

thousands of BSE-infected animals had already passed through the food chain for

human consumption. In addition to BSE, there have been other widely publicised

food safety scares:

♦ The Escherichia coli 0157 outbreak in Lanarkshire, Scotland which killed 21

people (BMJ, 1996)1.

♦ Ongoing concerns regarding salmonellosis from poultry. On 3 December

1988 the British junior Minister for Health conceded that ‘most [of the] egg

production in this country, sadly, is now affected with salmonella’ (BBC)2.

♦ In 1999 hundreds of farms in Belgium received supplies of animal feed

contaminated with dioxin, a carcinogenic by-product from the manufacture

of herbicides (Channel 4.com)3.

Traditional food safety systems that were geared to identifying bacterial pathogens

were inadequate for dealing with the BSE and dioxin crises partly because these

problems originated from contaminants that originated off-farm.

In their submission to the Livestock and Animal Product Traceability System

(LAPTYS) AgriQuality succinctly summarised the international trends in traceability

from a New Zealand perspective (Moore, 2004)4:

1. The government and industries of our major trading partners (UK, Europe,

USA, Canada, Australia, and Japan) are investing significant resources into

animal tracing systems. Although current motives for this investment differ

from country to country (biosecurity risks, food safety assurance, prevention

of subsidy fraud, and productivity gains) this trend cannot be ignored given

New Zealand’s reliance on agricultural and food exports. For cattle, the trend

has gained impetus through the occurrence of BSE and has had flow-on

effects to countries other than our major trading partners (examples include

the South American beef producing states). Once a trading partner has

adopted an animal tracing system, the risk for exporting countries such as

New Zealand, is that there will be demands to have equivalent systems in

place.



2. Market access for some New Zealand meat products at the commercial level

is increasingly reliant on product difference. For example: beef exported into

North America competes with a cheaper South American product; this price

differential is overcome when the exporter is able to support claims for pre-

slaughter traceability (e.g. Greenlea Meats Ltd).

3. Consumers are exercising or are being encouraged to exercise their right to

have access to more information about the food they purchase. Although

difficult to apply to all animal-derived products, information about a product

and where it has been sourced over its lifetime is a clear trend. This trend is

reflected in the multitude of farm assurance programmes that operate and

are beginning to be adopted within New Zealand (see, for example, EuroGap

and BRC).

2.1 World beef and veal trade

Details of world beef and trade values, by exporting country, are shown in Table 1.

Table 1: World beef and veal trade, FAO figures fro m 2003.

Country Exports (million USD) Imports (million USD)

European Union a 350 1039

Argentina 462 7

Australia 2350 6

Brazil 1155 60

Canada 979 506

Chile 17 217

China 15 260

Japan 3 2137

New Zealand 946 16

Russian Federation - 621

United States of America 3069 2461

Uruguay 359 0 a Excluding internal trade.

New Zealand is a smaller player in the global marketplace and therefore cannot

dominate or dictate the standards and protocols that are associated with the trade.

2.1.1 Traceability

The European Union definition for traceability is found in paragraph 15 of Article 3

of EU General Food Law Reg. EC No 178/2002:



The ability to trace and follow a food, feed, food-producing animal or

substance intended to be incorporated into a food or feed, through all

stages of production, processing and distribution.

Opara (2003)5 defines traceability in an agricultural context as:

The collection, documentation, maintenance, and application of

information related to all processes in the supply chain in a manner

that provides guarantee to the consumer and other stakeholders on the

origin, location and life history of a product as well as assisting in

crises management in the event of a safety and quality breach. With

respect to a food product, traceability represents the ability to identify

the farm where it was grown and sources of input materials, as well as

the ability to conduct full backward and forward tracking to determine

the specific location and life history in the supply chain by means of

records.

Opara (2003)5 recommends that for agriculture and food businesses, an integrated

supply chain traceability system must encompass the following elements:

1. Product traceability to determine the physical location of items at any stage

in the supply chain to facilitate recall and/or dissemination of information to

customers and consumers.

2. Process traceability to determine the type and sequence of events that have

occurred during the production and handling of the product: what, where,

when. These include: (a) physical/mechanical, chemical, environmental and

atmospheric factors, treatments and formulations which could result in

transformation of the raw material into value-added products, and (b)

presence or absence of contaminants.

3. Input traceability to determine: (a) type and origin (source, supplier) of

ingredients used to create the raw product (seeds, stem cuttings and other

planting materials, fertiliser, chemical sprays, irrigation water, livestock,

feed), and (b) materials (additives, chemicals) used for the post harvest

handling, preservation and/or transformation of the basic raw food material

into processed (reconstituted or new) food products. Input traceability

includes the analysis of genetic constituents of products.

4. Disease traceability to determine the outbreak and monitor the epidemiology

of biotic hazards such as bacteria, virus and other emerging pathogens which



are potential risks to the humans through contamination of foods and other

ingested products derived from biological and agricultural raw materials.

5. Genetic traceability to determine the genetic constitution of the product,

including variety, type, origin and alterations in the basic DNA structure.

6. Measurement traceability to relate individual measurement results (such as

product quality and safety attributes) through an unbroken chain of

calibrations to accepted reference standards.

Production

Processing

Wholesaling

Retailing

Consumption

Traders (Domestic/Export)

Information

Raw material supply

Figure 2: Schematic diagram of the food chain.

2.2 The Precautionary Principle

Another consequence of the BSE scare has been the adoption of the Precautionary

Principle into Article 7 of EU General Food Law Reg. EC No 178/2002:

In specific circumstances where, following an assessment of available

information, the possibility of harmful effects on health is identified but

scientific uncertainty persists, provisional risk management measures

necessary to ensure the high level of health protection chosen in the

Community may be adopted, pending further scientific information for

a more comprehensive risk assessment.

Measures adopted on the basis of paragraph 1 shall be proportionate

and no more restrictive of trade than is required to achieve the high

level of health protection chosen in the Community, regard being had to

technical and economic feasibility and other factors regarded as

legitimate in the matter under consideration. The measures shall be

reviewed within a reasonable period of time, depending on the nature

of the risk to life or health identified and the type of scientific

information needed to clarify the scientific uncertainty and to conduct

a more comprehensive risk assessment.



The precautionary principle has long been associated with environmental protection

policy where it has been applied in the face of scientific uncertainty about an

outcome. For example the impact of oil spills on wildlife and the environment. The

precautionary principle allows policy to be made in the absence of conclusive

scientific proof and in the case of food products shifts the burden of proof of no

harm to the food product’s producer.

2.3 Why implement traceability?

For New Zealand, a country that exports 85% of its beef and a similar proportion of

other primary products, the overriding reason to adopt traceability is to ensure

market access and to remain competitive.

When a major beef importer decides to impose a mandatory

traceability system, it will require traceability on imported beef.

Assuming such systems are not successfully challenged at the WTO,

those countries adopting equivalent traceability systems will have

better access to the markets of such importing countries. Producers or

countries refusing to adopt equivalent traceability systems will lose

markets (Souza-Monteiro and Caswell, 2004).

At present the two most important red meat markets for New Zealand are the

European Union and Japan; these countries have some of the most rigorous

traceability systems in place anywhere in the world.

2.4 New Zealand Working Group

In May 2004, the New Zealand LAPTYS committee6 convened an Animal

Identification and Traceability Working Group to consider traceability and

identification needs within New Zealand7. The Working Group brief was to consider

systems for cattle and deer, but also to take into account other species such as sheep,

pigs, horses, and goats8.

The Working Group included appointees from Federated Farmers, Meat New

Zealand, the Meat Industry Association, DCANZ (dairy companies), Dairy Insight,

Livestock Improvement Corporation, Deer Industry New Zealand, the Pork Industry

Board, New Zealand Stock and Station Agents Association, the Animal Health

Board, MAF Biosecurity, and the New Zealand Food Safety Authority.

This Situation Analysis report was predominantly undertaken in parallel with the

considerations of the Working Group, which delivered its own recommendations in



July 2005. The Working Group’s initial proposal is that each animal be assigned a

unique number (including bobby calves), and each property or site be identified by a

Property Location Number (PLN). These numbers would be issued by a single body

with a central database, to which other industry databases could be linked. The

database would track tags issued, movements, and slaughter or death, and possibly

other optional data.

While the Working Group recommends standardisation of identification methods, it

refrains from specifying any technologies at this stage.

2.5 Report structure

This report discusses the two main drivers on New Zealand that will shape the

development of New Zealand’s traceability response. The first of these, competitors,

is covered in Chapter 3 Biosecurity Comparisons. This chapter discusses the

components integral to traceability and then reviews how New Zealand and other

beef exporting countries are progressing towards achieving “traceability”.

The second major driver, customers, is covered in Chapter 4 Market Perceptions.

This chapter reviews the perception of traceability and product safety in customers

of New Zealand’s food products and highlights incidents of food safety concerns that

have caused barriers to trade.

Chapter 5 describes the current and possible role of ICT in traceability systems,

particularly technologies that could be applied behind the farm gate.

Chapter 6 reviews the specific traceability requirements for applications of

Biopharming in New Zealand such as containment monitoring, biosecurity and

product integrity.

2.6 Contributors

This report has been compiled from contributions from four separate sources,

drawing on their various expertises. The Biosecurity Comparisons chapter was

authored by Kevin Lawrence and Dr Mark Stevenson, Massey University. Leith

Pemberton of Leith Pemberton Associates, contributed Chapter 3 Market

Perceptions. Chapter 4 ICT Opportunities was authored by Jeremy White and

Louise Hanlon, Rezare Systems. The final chapter, Biopharming and containment,

was contributed by Tim Hale and Shane Leath, AgResearch.



Our thanks go to these individuals and organisations for the work in preparing the

material to enable such a comprehensive report to be drawn together for New

Zealand.

2.7 Definitions

The following definitions have been used consistently through this report.

Traceability: The ability to track and/or trace product flows in both fresh

production and an industrial distribution chain. Traceability implies that products

are uniquely identifiable, that at critical points in the production and distribution

processes, the identity of product flows are logged, and that the information is

systematically collected, processed and stored.

Tracking: The ability to follow products in real time. In monitoring a distribution

process, one may want to know the current location of a product (for example online

parcel tracking capabilities are now routinely used by most major courier

companies).

Tracing: Reconstructing the historical flow of a product from stored records.

Typically, when a consumer encounters a defective product, one may want to know

the history of that product. This requires the analysis of registration and production

records in a traceability database. There are two types of tracing activities:

Upstream tracing: The history of a product is reconstructed from the ‘final

destination of a product’ back to its origin. The important question here is: ‘what are

the origins of my product, and can I identify which circumstance in that history is

responsible for the defect at hand?’

Downstream tracing: ‘Raw material’ is taken as starting point and the products

that contain that raw material are identified. If a batch of flour is polluted with

dioxin, which products are affected?

Animal identification: The marking of individual farm animals, or a group or lot

of animals, so that they can be tracked from place of birth to slaughter.

Consumer: The end user of a product, service or technology.

Customer: The party purchasing a product for distribution to consumers.

Biopharming: The use of Genetic Engineering (GE) or other novel techniques on

plants or animals to produce pharmaceuticals, or other products.



2.8 References

Each chapter of this document concludes with any references from the text as end

notes.

1 Christie, B (1996) E coli 0157 kills five people in Scotland. British Medical Journal

313:1424 http://bmj.bmjjournals.com/cgi/content/full/313/7070/1424/a. Last accessed 28

June 2005.

2 BBC on this day 1988: Egg industry fury over salmonella claim:

http://news.bbc.co.uk/onthisday/hi/dates/stories/december/3/newsid_2519000/2519451.stm.

Last accessed 28 June 2005.

3 Channel 4 Bad taste: food scares:

http://www.channel4.com/science/microsites/B/bodystory/bad_food.html#dioxin. Last

accessed 28 June 2005.

4 Moore, D., 2004. Support information services for animal tracing, Review of

position post submissions. http://www.biosecurity.govt.nz/pests-diseases/animals/animal-

tracing-system-submissions.pdf. Last accessed 28 June 2005.

5 Opara LU (2003) Traceability in agriculture and food supply chain: a review of

basic concepts, technological implications, and future prospects Food, Agriculture

and Environment 1(1): 10 – 106. http://www.world-

food.net/scientficjournal/2003/issue1/pdf/Agriculture/V1N1A101-106traceability.pdf. Last


6 The Livestock and Animal Products Tracing and Information System (LAPTYS)

Programme, Ryan T, Proceedings of the Food Safety & Biosecurity Branch NZVA, 2004

7 Support Information Systems for Animal Tracing, Hellstrom J & Moore D, April 2004

(discussion document available at http://www.biosecurity.govt.nz/pests-

diseases/animals/animal-tracing-system.pdf, and submissions at

http://www.nzfsa.govt.nz/animalproducts/publications/consultation/submissions/analysis

/laptys-review-post-submissions.pdf).

8 Terms of Reference for the Animal Identification and Traceability Working Group, 21 May

2004.

3 Biosecurity Comparisons

Kevin Lawrence and Dr Mark Stevenson, Massey University

3.1 What is required from traceability?

In most countries that have mandatory livestock and traceability systems the system

is designed for tracing back in the event of a problem and usually do not provide any

information on product attributes. However, as Dickinson and Bailey1 showed

traceability needs to be linked to quality assurance to gain consumer approval.

Australia appears to be adopting the approach of integrating assurance information

into their traceability system. This pre-emptive approach to traceability would be

similar to New Zealand’s abattoirs adopting Halal slaughtering techniques to assure

access to Islamic markets.

3.2 Comparing traceability systems

In 2004 Golan2 proposed a method of categorising traceability systems by

considering the breadth, depth and precision of each system. It is proposed in this

document to compare national traceability systems using the Golan system, an

approach first used by Souza-Monteiro and Caswell (2004)3.

Breadth is often described as the quantity of information that is maintained in the

traceability system. For example breadth might include issues such as what farms

the animal has resided on, how long the animal was on each farm, what other

animals the animal has been in contact with, what pastures the animal has grazed

and for how long, to what forages were contained in those pastures, the age of the

animal, etc.

Depth refers to the distance traceability is ensured either backwards or forwards

within the supply chain of the industry or firm utilizing the traceability system.

Depth may include questions regarding whether a particular meat product on the

retail shelf can be traced back through each location is has been from the

distributor, back to wholesaler, back to processor, back to all feedlots and auctions

the animal ever resided on, or even all the way back to its cow herd of origin and

parental animals.

Precision of a traceability scheme is the extent to which the tracing system can

isolate product flow through a particular transaction within the supply chain.

Precision refers to the detail with which any particular transaction can be traced to



every individual activity that a particular product has undergone; this may include

tracking a particular primal of a particular carcass half from a particular kill time

and slaughter chain slot (e.g. individual animal and product as opposed to lot

identification or the accuracy of the traceability system in precisely estimating when

the animal was at various locations in the production process).

The unique breadth, depth, and precision mix of a given traceability system is

chosen to be the arrangement that confidently provides the desired ‘tracing

capabilities’ at the lowest possible expense.

Table 2: Scoring system for breadth of traceability

Levels of information Breadth score

1 2 3 4 5

Farm identification

Individual animal identification: (tag or RFID)

Individual animal information: (breed, sex, sales history, age etc)

Farm management information: (feed, welfare, organic status etc)

DNA sample

Table 3: Scoring system for depth of traceability.


1 2 3 4 5

From farm of origin

To auction

To slaughterhouse

To home consumer

To port of export

Table 4: Scoring system for precision of traceabili ty.


1 2 3

Cannot trace processed product

Can traced processed product to herd, group, or farm

Can trace processed product to individual animal



3.3 Components of tracking and tracing

systems

Introducing tracking and tracing systems in food processing companies or chains is

sometimes regarded as just a matter of technology. The reality is more complex. It

appears to be crucial to embed tracking and tracing into the whole business chain to

realise its respective goals. A complete tracking and tracing system consists of the

following components: technology, process and information and organisation. The

design of these components connects with an analysis of the strategic objectives of

tracking and tracing, so that the ultimate implementation matches the relevant

business goals.

Tracking and tracing systems can employ different technologies. Major tracking and

tracing modules are: (1) identification, (2) registration and administration, and (3)

data processing. Infrastructure refers to topics like the harmonisation of bar-coding,

network- and web-interfaces and arrangements on data- and product-ownership,

transparency and liability between chain partners. The required technology and

data-processing depend on the requirements and goals of the stakeholders.

Chapter 4 ICT Opportunities describes in more detail the components of tracking

and tracing systems.

3.4 Process and information

Food processing chains deploy various types of processes. Three types of

information play a central role in food processing (Moe, 1998)4: information on

products (type, identity, product descriptors), information on product flows (weight,

volume, number), and information on processes (type, process data).

For traceability purposes, it makes a large difference whether product flow has the

character of a discrete, identifiable product (e.g. apples, boxes of rice) the character

of a (semi-) continuous product flow (e.g. commodities such as corn, tapioca or flour

and liquids such as milk or vegetable oil). Products can be identified with a tag, and

followed through the process with scanners.

Another focus point in process and information for traceability lies in processes.

Processes can, amongst other, be characterised by their product flow. Divergent

processes (where product flows diverge into a larger number of product flows, e.g.

butchering a carcass, or the subdivision of grain into bran and granules) and

convergent processes (where several product flows are combined in a compound

product, e.g. a pizza is comprised of dough, tomatoes and mozzarella cheese) play a



special role from a traceability point of view; in these processes, product identities

are created and deleted.

In order to keep proper track of product flows the notion of registration points is

helpful. In order to follow products in a production chain, it is necessary to establish

the presence of a product (time, location and product identity). This requires the

product to pass a scanner. The point in the process where a product identity is

registered is called the registration point. To realise traceability as accurately as

possible, it is necessary to include a registration point after every process. The

information that needs to be registered in a specific process depends on the

requirements of the (chain) organisation. The need to register a product is especially

required before and after convergent and divergent processes.

In the food processing industry, the main focus is on realising elementary product

traceability. A study conducted by the Food Standards Agency (2002) signalled that

specific sectors in the EU are under way in realising traceability based on a proper

process and information configuration. Examples are the meat sector and the large

multinational food industries. Legislation helps to push a sector towards

traceability; however recent food crises indicate that both the internal organisation

and the interface between organisations still falter.

3.4.1 Organisation

Notwithstanding the importance of a proper technology and process configuration, a

major aspect in traceability is control and organisation. With control, we refer to the

processes that direct the various traceability processes in a chain.

An important issue is how to configure the chain and interconnections of

organisations, and how to ensure final and correct information exchange. An issue

that is often encountered in practice is the desired co-operation in a chain where

enterprises with conflicting control mechanisms are forced to cooperate. Examples

are an auction, where a push market is transformed into a pull market, and a

slaughterhouse, where an animal is subdivided into meat products.

Apart from the mismatch in control strategies, there is also the risk of a mismatch

between a control strategy and the feasibility of traceability. A chain that is currently

unable to trace raw materials to the grower (e.g. because an intermediate trade link

is not able to provide the necessary information) will be confronted with serious

limitations in guaranteeing downstream traceability of compound products

containing that raw material. To be able to control a logistic chain, it is important to

configure the internal and external organisation such that efficient co-operation is



facilitated. Often, the most powerful actor (seldom a retail organisation) will impose

the traceability requirements as a chain director onto the rest of the chain.

Important organisational issues that arise in a chain are:

1. Which actor is responsible for a product in which part of the chain? The

same applies for process, activity, and registration points.

2. Which functions fall within each chain organisation? How are these

functions linked?

3. Which certificates suffice to meet the major requirements of my clients?

Table 5: Traceability Scores for Individual Countri es.

Country System type Total Traceability Score

Argentina Mandatory 8

Australia Mandatory 12 to 13

Brazil Voluntary 5

Canada Mandatory 9 to 10

Chile Mandatory 7 to 10

EU Mandatory 7 to 10

Japan Mandatory 11

New Zealand Mandatory 8 to 10

Uruguay Mandatory for export 10 to 13

USA Voluntary 8 to 9

Table 5 shows that, on the basis of this review, the traceability system currently in

place in New Zealand traceability is comparable to many of her trading partners.

However, not shown in Table 5 is that many countries are in the process of

implementing more advanced systems (or have systems which can be expanded if

necessary) whereas, at present, the New Zealand system is more or less static.

Of real concern to New Zealand should be the speed of change in South America:

Uruguay in particular, is well on the way to having a full traceability system.

It is important that what ever system is adopted by New Zealand, the question of

through abattoir traceability has to be resolved; the proposed Scanvaegt system for

Uruguayan abattoirs may require closer examination.



3.5 Country Comparisons

3.5.1 Argentina

Argentina has always been a net beef exporter, although in recent years an economic

recession and a large foot-and-mouth disease (FMD) outbreak have had major

impacts on export volume. The EU is an important buyer of Argentinean beef,

especially high quality fresh beef cuts imported under the Hilton Quota.1

Argentina is considered to be BSE free.

Animal diseases such as brucellosis and tuberculosis have yet to be totally

eradicated in Argentina (SENASA 2003). Due to the persistence of these diseases in

the north western provinces, Regulation 345/98 issued on 4 April 1998, modified

the requirements for beef and other ruminants exported to the EU. Every animal

destined for export is required to carry a document, signed by an official

veterinarian certifying that it is free of disease and did not originate from a foreign

country or province where disease persists. Resolution 625/2002, issued on 24 July

2002, requires that all animals exported to the EU must have remained in Argentina

for at least three months before slaughter and must have originated from a limited

number of countries. This resolution also requires that all facilities producing cattle

destined for export must have an approved sanitary status and all animals within

each facility must have an individual sanitary certificate assuring that it is free of

animal diseases.

In January 2003, Resolutions 001/2003 and 002/2003 were published to assure

traceability by creating procedures to register slaughterhouses, processing facilities,

and feedlots authorised to export beef. The central traceability regulation followed

in February 2003 through Resolution 15/2003 creating the Export Cattle

Identification System. This system requires that all animals for export must be

identified. All animals have to wear a tag bearing a unique animal identifier and an

identifier of the premises on which the animal was born. The animal must also be

branded with the National Sanitary Register of Livestock Producers insignia. Every

facility authorised to export must register the existence and all movements of

animals in a table of registries approved by the regional branch of the Argentine

National Service of Agro-Food Safety and Quality. The EU resolutions on

traceability took effect in May 2003.

1 The Hilton quota is an agreement with the European Union which allows for the importation of high value cuts of meat into the EU free of the €3.043/kg tariff. The current Hilton import quota for Argentina is 28,000 tonnes per year.



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 port of

export where carcasses or beef cuts leave the country. The system does not have the

same depth as systems in Japan, the EU, or Australia because it does not reach

retailers or import ports. The characteristics recorded are not as broad as those in

Japan, the EU, or Australia. The system is able to trace back to individual animals

and their respective farms of origin, but it lacks precision and accuracy since it relies

on information provided by operators and does not employ an integrated database.

Another issue with Argentina’s system is that it is of limited scope as it only applies

to export cattle.

Argentina is an example of how traceability is limited by economic conditions. The

economic crisis of 2002 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. Hence in the Argentinean

case traceability is mainly motivated by trade, as only beef destined for export

markets must be identified.

Argentine beef producers and exporters have successfully completed what they

describe as the European Union’s most demanding inspection of Argentina’s

traceability system to date5 (Lewis 2005).

The livestock/meat traceability system in Argentina has progressed further than

those of other South American nations, largely because of pressure exerted by EU

sanitation officials and European supermarket chains. The need for traceability was

underscored two years ago when EU inspectors discovered irregularities in

Argentina’s system for supplying beef under the Hilton Quota. At that point

European sanitation officials threatened to cut off the lucrative program unless

Argentine suppliers clearly documented their compliance with quota requirements

throughout the production chain. EU sanitation officials have expressed misgivings

over the inability of Argentina and its neighbours to eliminate livestock smuggling

across international borders. The illegal movement of livestock over Argentina’s

remote borders with Bolivia and Paraguay is of particular concern. By implementing

a nationwide cattle/beef traceability system, sanitation officials hope to eliminate

any disease-related threat to Hilton Quota sales. The EU inspection in April 2005

revealed that there is still room for improvement in tracking Argentine meat

products after they depart for foreign markets. Blame was not directly pointed at

Argentine exporters, yet the inspection team discovered that meat products destined



for Russia and other outside destinations were being diverted into the EU at the port

of Amsterdam. As a result, Argentine trade officials are taking steps to trace meat

shipments more carefully to ensure that they arrive at the proper foreign

destination. Argentina’s progress is putting pressure on other Hilton Quota nations

such as Brazil, Paraguay, and Uruguay to expand their traceability systems more

quickly.

Component Details

System type Mandatory

Date of full implementation In force

Depth 3

Breadth 2

Precision 3 (in theory)

Total score 8

3.5.2 Australia

Australia is the world’s second largest red meat exporter, with total beef exports

exceeding USD $2.34 billion in 2003 – 2004 (Meat and Livestock Australia, 2005)6.

Because the Australian livestock sector is so highly dependant on red meat exports,

the country has been proactive in developing traceability systems.

Australia has used a tail tag system for over 30 years to identify the most recent

property of origin for cattle. These tail tags cost producers about 1 US cent each,

have an estimated retention time of approximately 30 days and are required by law

to be applied to cattle prior to movement. This system, in its original form, was

limited in its traceability capabilities as the tail tag itself only indicates the Property

Identification Code (PIC) of the property from which the cattle were most recently

residing on. Furthermore, the tail tag is unique to pens or lots of cattle, and not to

individuals.

In 1996 25 farms in New South Wales were placed under quarantine following

detection of excessive residue levels of endosulfan (a chemical used to treat

Helicoverpa in cotton) in export stock (Spence et al. 19987, Global Pesticide

Campaigner 19998). This event prompted extension of the tail tag system with an

additional paper-based system referred to as the National Vendor Declaration

(NVD) program, now called the National Vendor Declaration and Waybill. Among

other things this declaration includes assurance by the cattle owner that:



Cattle that have been treated with a hormonal growth promotant were produced at

that location abiding to rules consistent with an independently audited quality

assurance program.

Cattle were born and raised on the vendor’s property and if not, it is known how

long they were resident on the vendor’s property.

Details of any by-product feeds offered in the last 60 days are recorded.

Cattle grazed on a property placed under grazing restrictions because of chemical

residue or cattle still within a withholding period for any drug or chemical treatment

in the last six months are declared.

This resulted in a NVD completed by the seller for each group of cattle being sold.

The form is not mandated by Australian legislation, but is demanded commercially

and is therefore widely used. The NVD is required for all animals destined for export

markets and because it is a legally binding document, it can be used for liability

recourse in the event of a legal claim by future owners of the cattle or beef for which

the NVD was completed. The NVD program is conducted using paper copies and to

date has not been integrated into an electronic system to facilitate transmission of

information.

The most recent update to Australia’s animal identification efforts has occurred with

the implementation of the National Livestock Identification System (NLIS). The

NLIS is a permanent whole-of-life identification system allowing individual animals

to be traced from their property of birth to their slaughter destination. The NLIS has

been designed to improve traceability, enhance food safety, ensure beef product

integrity, to allow and sustain international market access, and to provide

progressive livestock producers with enhanced managerial opportunities. The NLIS

is an enhancement of the tail tag and NVD systems and it moves Australia’s

traceability systems from primarily herd-based identification to electronic,

individual animal systems. The NLIS is managed by Meat and Livestock Australia

on behalf of industry and government.

The NLIS requires all calves to have a NLIS compliant, RFID device applied before

leaving the property on which they were born. RFID devices can be either ear tags or

rumen bolus/ear tag combinations. Each RFID device contains a microchip encoded

with a unique code that identifies the property on which the animal was born. RFID

devices are electronically read as the cattle move throughout the production system;

in particular, readings are mandated at each transaction of cattle. Over time, these

readings create a history of each animal’s movement, developing a very



comprehensive, electronically-based database to facilitate individual animal

traceability. Hence, the system is precise to both the individual animal and

geographical location. A single centralised database, maintained by Meat and

Livestock Australia (an industry-funded private service organisation funded by

levies obtained from livestock producers) contains all individual animal trace back

records for the entire country.

To comply with the NLIS, producers are required to identify each animal with an

approved NLIS device. The NLIS system also offers numerous management

opportunities to livestock producers who choose to take advantage of them. These

benefits can include the facility to record medical treatments, animal growth

performance data, and carcass details. These benefits are realised by those who

invest in information technology and purchase appropriate computer software,

RFID reading equipment, weight scales, Internet connectivity, and by utilising web-

access provided by MLA to an array of information pertaining to individual herds.

These additional benefits make the NLIS system comparable to Japan in breadth.

The NLIS system is being implemented on a state-by-state basis. Each of Australia’s

seven states are required to meet national guidelines as set in the NLIS program, but

each state is free to choose when the program will be implemented, with 1 July 2005

being the nationally mandated deadline for implementation. The precedent set by

those states currently using the NLIS system is to choose a date from which all

calves born on or after that date must be identified with NLIS approved devices.

Then, one year after this selected date, all cattle leaving any property in that state

must be identified with NLIS approved devices. Furthermore, on this date, all

saleyards, feedlots, and processing plants will be required to read all NLIS devices

and to transfer this information to the NLIS database. This implementation

procedure allows for firms in the livestock sector to transition into the national

identification program and thus provides these entities time to budget and plan for

the adjustments that need to be made for NLIS compliance.

The program is designed to track the animal from birth to the plant, but, like the

Canadian system, it does not provide a mechanism for tracking animals through the

processing system. Information available to producers includes the date of

slaughter; the NLIS tag number, the vendor’s property identification code, and the

hot standard carcass weight, or weight at slaughter. In other words, the system

provides a means by which the producer is able to identify when, where, and in what

condition an animal reached a processing plant. The system does not provide



information about the way the animal was processed, post-processing quality

characteristics, and similar information.

In September 2004 ISO granted Meat and Livestock Australia ISO 9000:2001

certification for the NLIS system (Food Traceability Report 2004)9.

Victoria, South Australia, Tasmania, New South Wales and Western Australia are

committed to full implementation of the NLIS system by 1 July 2005. Queensland is

about two years behind Victoria and should have full implementation by 1 July

2007.

It should be noted that questions have been raised by producers about the benefits

offered by this system in relation to its costs. The tags cost approximately USD

$2.70 and cannot be recycled or recovered by the producer. This aspect of the

system is proving to be a source of controversy within the industry. The implications

of this for New Zealand producers are:

♦ A mandated RFID tracking system will be a cost carried by producers.

♦ The benefits of a system that only provides tracking to the abattoir will offer

limited benefits to producers.

♦ Involvement and leadership by producers and other industry stakeholders in

such a system will be crucial for complete industry uptake.



Component Details


Date of full implementation In force (with exceptions)

Depth 5

Breadth 4 to 5

Precision 3

Total score 12 to 13

3.5.3 Brazil

Brazil’s ambitious plans to become the second largest beef exporter in the world by

2010 and eradicate FMD by 2006 were stalled recently when Brazil’s Ministry of

Agriculture Roberto Rodrigues announced that the System for Identification and

Certification of Origin for Bovine and Buffalo (Sisbov) will be handled on a

voluntary basis. SISBOV proponents had underestimated the economic and physical

resources needed to trace the world’s largest commercial cattle population,

estimated at 195 million head of stock.

The agriculture ministry is planning to merge the Sisbov system with the long-

standing Animal Transit Registry System. This would streamline the tracking of

animal movements and avoid duplication of paperwork. Agricultural officials in the

state of Parana have asked to host a pilot program for the joint programs. However,

they are demanding that the program be based on herd-level traceability,

undermining the original concept of Sisbov, which was to handle the tracing of

individual cattle.

Brazil’s strongest South American competitors – Argentina and Chile – have not

wavered from their ambitious programs for nationwide cattle traceability. Exporters

in Argentina and Chile anticipate that their traceability systems will be functioning

in 2005. Argentina has opted for a system that traces individual animals. If Brazil’s

agriculture ministry concedes to traceability at the herd level, Brazilian meat

exporters could find themselves at a competitive disadvantage (Lewis 2005a,

2005b)10.

Only producers and processors registered in Sisbov are permitted to supply the

European Union; it is estimated that Sisbov has about 45 million animals on

108,000 farms registered. At present Sisbov does not provide specific information

on the source and nature of feed used on farms.



In a meeting with Brazilian Agricultural secretary in June 2005, EU officials

restated their demand that animal feed data be included in the system and that

Brazilian products destined for Europe must meet the same traceability standards as

those produced in the EU (Lewis 2005c)11.

Component Details

System type Voluntary


Depth 2

Breadth 1

Precision 2 (possibly)

Total score 5

3.5.4 Canada

Canada is the fourth biggest exporter of beef in the world, with beef exports worth

USD $1.36 billion in 2002 (Canada’s Beef Industry Fast Facts)12.

The current Canadian approach to beef safety is at a midpoint between the EU and

the US systems. Full traceability from farm to fork is not mandatory but since 1

September 2003 cattle must be identified when they are moved from the farm where

they were born to another farm, slaughterhouse, or for export. In the past

mandatory animal identification was used to assist in the eradication of diseases

such as brucellosis and tuberculosis but the system was relaxed after 1985 when

these diseases were eradicated. In the late 1990s it was estimated that only 10% of

the Canadian cattle herd was identified.

In December 2000, Part XV of the Canadian Federal Health of Animals Act of 1991

was amended to include animal identification, to take force in July 2001. The

industry led Canadian Cattle Identification Agency (CCIA), established in 1998 as a

non-profit corporation, was mandated to administer the Canadian Identification

System. Section 175 of the Amendment requires that ‘every person who owns an

animal or has the possession, care, or control of it shall ensure that it is identified by

an approved tag applied to it before it is moved from its farm of origin.’ Section 186

specifies procedures for slaughterhouses. The operator of the facility is allowed to

remove the tags from animals to be slaughtered but must notify authorities of the

deaths of each animal and their corresponding tag numbers within 30 days.

Identification is also required for imported cattle, which must be given a Canadian

approved tag as they enter the country. In addition, Section 189 requires that all

existing information on imported animals must be referred to the administrator to



allow trace back to origin. Cattle exported from Canada must also bear an approved

tag; importing authorities may remove the tag as the animal enters the new country.

Ear tags contain a visible unique identification number, a bar code, and the CCIA

logo. The unique identification numbers are given to tag manufacturers by the CCIA.

Producers obtain tags through authorised service centres and other distribution

channels. The service centres maintain records about the numbers assigned to each

producer and submit this information to the central CCIA database. Once the tags

are applied to an animal, the identification number stays with the animal until it is

processed. Processing plants are required to maintain information about the carcass

to the inspection point.

The CCIA initially made use of bar code technology; however, as of January 2005,

the program began replacing bar code tags with RFID ear tags. RFID tags have the

numeric identification number imprinted on the surface of the tag and the

embedded RFID chip.

The Canadian Animal Identification System is not as complex as those in operation

in the EU or Japan. Only animals that leave the original farm must be identified and

it is only the system’s administrators that keep records. The system is not as deep as

those in the EU and Japan as it does not extend to retail. The system does allow back

tracing from points of export to farms of origin. For the domestic market only

linkage between slaughterhouses and farms of origin is mandatory. The database

maintained by CCIA was instrumental in the first Canadian case of BSE in May

2003 for identification of the offspring of the infected cow. Experts argue that the

system could be improved and officials say that if more information was recorded

1000 of the 2,700 animals slaughtered in response to the BSE case could have been

spared (Binkley 2003)13.

In terms of economic impact, the Canadian Animal Identification System proved

useful but by no means totally effective in preventing losses when a major crisis

arose (Caswell and Sparling 2004)14. Between May and June 2002, at the peak of

the BSE crisis, cattle prices dropped by over 50% and exports were totally banned

(Lawrence et al. 2003)15. This case helps explain why countries where exports are

important (such as Canada, Australia, Brazil, and Argentina) are determined to

introduce traceability and further quality assurance, as this is becoming a condition

for access to premium export markets. As in the EU and Australia, public authorities

have contributed to the introduction of traceability in Canada but the producers still

have to bear the cost of purchasing the tags and providing information to the CCIA.



Since traceability is not extended to retail in Canada, the impact on the supply chain

is smaller than that already visible in the EU and Japan. Since the system is

mandatory there are not the opportunities for beef supply chain competition for

domestic markets that exist in the cases of Australia and Brazil. However there is

international competition with supply chains of these former countries for high

quality beef markets. Finally, the design of the Canadian system enables authorities

to capture all the animal health benefits described above. However it falls below the

systems of the EU or Japan in terms of potential human health benefits as it does

not record information beyond slaughterhouses.

Component Details



Depth 3 to 4

Breadth 3

Precision 3

Total score 9 to 10

3.5.5 Chile

Since Chile’s first EU approved export abattoir Carnes Ñuble opened there has been

a steady increase in Chile’s beef exports from USD $0.3 million in 2002 to USD $15

million in 2004. Overall, Chile is a net importer of beef but they have a considerable

export infrastructure for fish, wine and fruit.

A livestock traceability program has been proposed and designed by the Chilean

ministry of agriculture, the Servicio Agricola y Ganadero (SAG, 2005)16. The

projected date for full implementation of the program is 31 December 2008 but it is

likely that this will be accelerated to take advantage of Brazil’s delay in

implementing traceability systems and the Japanese import ban on North American

beef. The potential for competition from Chile in export markets over the next

decade cannot be underestimated. It is widely believed that Chile and Argentina will

be the first Latin American countries to implement national cattle traceability

systems that meet Japanese standards.

SAG is about to combine the nation’s livestock/meat traceability system with its

three-tier Livestock Ranch Official Certification Program (PABCO), which ranks

producers according to the foreign markets they are permitted to supply. Producers

participating in the program are rated Level A, B, or C. In order to be certified at

Level A, producers must demonstrate that they have fully engaged in the national

traceability system for individual animals. They must also use official individual



identification devices that meet PABCO standards and are compatible with the

agriculture ministry’s traceability data base. Level A producers will be allowed to

supply foreign markets with the most demanding sanitation standards, and they

alone will be allowed to supply the EU. Traceability data recorded at these

establishments covers animal movement, production practices, and medications

used. In order to maintain an A rating producers must maintain uninterrupted

traceability records from farm to fork.

Level B producers are allowed to supply most foreign markets, with the exception of

those that call for uninterrupted traceability of individual animals. Most producers

at this level are in the process of implementing a comprehensive traceability system

but lack-isolated components. When Level B suppliers get their traceability systems

fully up and running, they can petition PABCO for a rating upgrade.

Most Level C producers are PABCO newcomers. They either have no traceability

system in place or are in the earliest stages of establishing a system. Their products

can be exported but are limited to foreign markets that require nothing more than a

certificate of origin. By joining PABCO, these establishments gain access to

technology and expertise that will eventually allow them to supply more demanding

foreign markets.

SAG is actively encouraging all of Chile’s livestock producers to join PABCO,

because certification requirements are viewed as effective weapons in combating

contagious livestock diseases that could put Chile’s livestock and meat exports at

risk. Chilean suppliers that lack PABCO certification are limited to serving the

national market.

Component Details


Date of full implementation 31 December 2008

Depth 2 to 3

Breadth 2 (PABCO A producers 4)

Precision 3

Total score 7 to 10

3.5.6 European Union

The European Union’s response to the BSE crisis was premised by the Single

European Act of 1986 (the first profound and wide-ranging constitutional reform of

the EU since the 1950s) that allowed the European Commission to propose

measures giving consumers of food from animal origin a ‘high level of protection.’



The January 2000 White Paper on Food Safety contained the road map for the

approach to food safety and new European legislation which specified deadlines for

the most important components of this legislation. This document considered the

sharing of information in a transparent, global, integrated, and harmonised way

along the food chain and between different Member States to be a primary means to

regain consumer confidence. Following White Paper proposals, legislation on the

safety of beef was issued in the summer of 2000: Regulation (EC) 1760/2000 of the

European Parliament and of the Council on 17 July and Commission Regulation

(EC) 1825/2000 on 25 August. Both regulations became effective on 1 September

2000.

Regulation (EC) 1760/2000 establishes a system to identify, register, and label

cattle and beef products. The objectives of this regulation are: 1) to establish an

efficient system of identification and registration of cattle at the production stage,

and 2) to define a common European labelling scheme for the beef sector based on

objective criteria at the marketing stage of the food chain.

Under Title I, a mandatory system of animal identification is detailed using two

individual ear tags, animal passports, and computerised databases in each Member

State to establish links between farms and slaughterhouses. All records must be kept

for at least three years, with records that are kept being verified by designated

national authorities. The system allows for a high level of precision in tracing any

problem identified in post-mortem inspections.

Under Title II, two labelling schemes are defined to assure traceability from

slaughterhouse to retail outlet. Section I defines the ‘Compulsory Community Beef

Labelling System’ and Section II defines the general rules of the ‘Voluntary Labelling

System’ which allows producers to extend the amount of information that is

provided to consumers. The compulsory system requires that each beef label must

include a reference number or code, to ensure a clear link between meat and animal

or groups of animals. Labels must also show the approval number and nationality of

the slaughterhouse where the animal (or animals) were slaughtered. If the carcass or

group(s) of carcasses is/are further processed, labels must indicate where those

operations occurred. The regulation includes specific details on the labelling for a

variety of situations.

All producers or groups of producers who wish to extend label information under

the Voluntary Labelling System, must send a specification for approval to the

competent authority of the Member State in which production or sale of beef in

question takes place. This specification must include all information placed on the



label, measures taken to assure those indications are accurate, a control system to

verify the truthfulness of the indication along the food chain, and the name of an

independent body complying with European Standard EN/45011. Through a

procedure described in Article 17, producers in third countries may use a voluntary

label system to export beef to the EU.

Commission Regulation 1825/2000 specified detailed rules for the application of

Regulation 1760/2000 in regard to compulsory and voluntary labelling schemes for

beef and beef products. This regulation defines traceability as an identification

system held by all groups of operators in the same or different parts of the beef

supply chain, such that it allows for the establishment of links between meat and an

animal or animals. This identification system must at least record information on

any arrivals and departures of livestock, carcasses, and/or meat cuts between

operators so that correlations are guaranteed. The regulation also defines the

required reliability of information contained on labels and in all types of registers.

Finally it establishes sanctions for non-compliance, which may include removal of

beef from the market.

Overall, the mandatory EU traceability system for beef is precise and deep through

its mandatory animal identification and compulsory labelling schemes. A possible

pitfall of this system occurs in cutting plants where links are established with groups

of animals rather than individuals. The system’s breadth is narrow, though a

supplementary voluntary scheme may further extend the breadth, depth, and even

precision of traceability to include information demanded by consumers or retail

chains on production practices, feed, cattle breeds, and other attributes. System

precision may be further enhanced if DNA testing to confirm the information in

databases is implemented as is being considered.

In its present state the EU traceability system generates most of the economic

impacts discussed in this document. The system of animal identification through

passports enables authorities and producers to track animal diseases easily and

quickly because the passport records every place the animal has been. Since the

animal identification system is combined with compulsory labelling, human health

hazards are also quickly identified and (in theory) more easily controlled. The EU is

leading the introduction of traceability systems worldwide and is a main driver in

establishing world standards. Mandatory traceability is likely to have significant

impacts on beef supply chains within the EU, although this effect may differ based

on the sophistication of existing systems that operate in individual sectors of the

industry.



European Community legislation requires identification and registration of cattle,

pigs, sheep and goats. For within-community trade animals must be accompanied

by a health certificate providing identification and health status details. Cattle must

also be accompanied by a passport. The required identification is harmonised on a

community-wide basis with the aim of ensuring traceability for veterinary purposes.

In the UK the British Cattle Movement Service (BCMS) an Agency of Defra, runs the

mandatory cattle identification and registration scheme. All cattle must be

registered and those born after 1 January 1998 have their movements traced from

birth to death.

Cattle must be identified with two ear tags bearing a unique identification code.

Pigs, sheep, and goats must be identified with a single ear tag or tattoo identifying

the farm of origin. A reinforced system for sheep and goats based on individual

identification with two tags will apply from 9 July 2005.

EU funded projects in traceability

Three projects have been carried out within the EU framework to investigate the

feasibility of replacing the current conventional methods of cattle identification with

electronic identification. These projects are the FEOGA, AIR3 2304 and IDEA.

The FEOGA project

The FEOGA project was carried out between 1993 and 1994 to establish whether or

not existing technologies were able to support the implementation of an electronic

identification system in livestock species that receive subsidies from the EC. In the

FEOGA project, commercially available electronic identification devices were

compared under laboratory conditions, and those with the best performance chosen

for a series of field experiments. Different body sites for subcutaneous injection with

glass-encapsulated injectable transponders were studied, and devices were

evaluated in terms of resistance to breakage, losses, tendency to migrate through the

body, ease of injection and animal welfare.

The AIR3 2304 project

The AIR3 2304 project was carried out between 1995 and 1998 and aimed to

complete and validate the results on passive transponder technology obtained in the

FEOGA project. The project explored the viability of rumen bolus and electronic ear

tags as well as injectable transponders. Results from the project showed that the

electronic identification systems used had higher retention rates and readability

values than conventional livestock identification systems (ear tags, tattoos, brands).



The IDEA17 project

The IDEA (Identification Electronique des Animaux) project was carried out in 1998

and evaluated the performance of electronic identification systems in livestock and

the required organisational structure for the future implementation of such system

for livestock industries. Throughout the project, one million animals from six EU

Member States (France, Germany, Italy, Netherlands, Portugal and Spain) were

tagged with electronic ear tag, bolus and injectable transponders. The recovery of

these devices in slaughterhouses was given extra attention due to the popularity of

bolus over other types of transponders. The project revealed that bolus losses were

low and the possibility of boluses entering the food chain was low as they were easily

recovered from the carcass. Results from IDEA project yield information about the

usefulness of the various electronic devices to combat fraudulent applications for

subsidies and to identify and administer livestock throughout the course of their

lives with precision.

Results of EU studies

On the basis of the three projects outlined above the EU has concluded that

electronic identification using passive RFID transponders is a reliable method for

the control and automatic registration of cattle. The IDEA project demonstrated that

substantial improvements in livestock identification can be achieved through the use

of electronic identification methods.

Component Details



Depth 3 to 4

Breadth 2 to 3

Precision 2 to 3

Total score 7 to 10

3.5.7 New Zealand

New Zealand beef exports in 2004 were worth USD $1.13 billion (Meat Industry

Association of New Zealand, 2004)18.

The compulsory national animal identification system (introduced on 1 July 1999) is

operated by the New Zealand Animal Health Board (AHB) as part of the National

Pest Management Strategy for tuberculosis. Under this scheme only ISO-approved

bar-coded ear tags are permitted and all cattle and deer over 1 month of age are

required to be identified with an identifier and herd number. All movements of



cattle and deer over 1 month of age are recorded on Animal Status Declaration

forms.

Details of New Zealand farms and livestock are held in two databases: details of

farm locations are held in AgriBase (Sanson and Pearson 1997)19 whereas details of

stock numbers present at each farm location are held in the National Livestock

Database (NLDB). AgriQuality (a state-owned enterprise) are contracted by the

Ministry of Agriculture and Forestry to maintain both Agribase and the NLDB.

Active management of bovine tuberculosis by the AHB has meant that the data in

both AgriBase and in NLDB is both used and actively updated.

The NLDB maintains a tag registry identifying all tag numbers created for beef cattle

and deer herds. Dairy herds that participate in herd recording schemes provided by

Livestock Improvement Corporation identify and tag animals using a unique

identifier system specific to that system. Details of dairy animals are recorded in the

MINDA database, maintained by Livestock Improvement Corporation.

Traceability from slaughter plant to export is carried out using Electronic

Certification (E-cert). Electronic certification is a tool used by the New Zealand Food

Safety Authority to provide assurances that products received by an importing

country comply with their standards. This is achieved by tracking the market

eligibility and product status from the time of production until export and the

approving of an Export certificate.

The Hon. Jim Sutton speaking at Retail Meat Conference on 11 March 2005 stated

the following:

International trends have been for increasing use of animal identification systems,

many incorporating radio frequency devices, and the maintenance of electronic

databases to enable fast trace back of value for biosecurity, food safety and other

commercial purposes. In New Zealand, we have no national animal identification

system for livestock. We do have several ad hoc animal identification and

traceability systems in place, but they are often manual, or, if electronic, the

information cannot be readily shared. Internal demand for identification systems

has been growing. One concern has been that, while New Zealand can provide

adequate information on animals, the international demand for more stringent

systems is growing, based on a concept of ‘farm to fork’. Major trading partners,

including Australia, the United States, Japan, Canada and countries in the European

Union have, or are in the process of implementing, animal identification systems,

with the requirements for these to become mandatory across livestock sectors. An



animal identification working group, chaired by Jeff Grant of Meat and Wool New

Zealand, has been set up with representatives of the cattle, deer and meat processing

sectors, Federated Farmers, MAF and NZFSA. Currently, most government

traceability system requirements are on a grouped animal basis with individual farm

registration. New Zealand has the technologies for identification at an individual

animal level, not just an individual farm location. PPCS, a local export meat

processing and marketing company, is currently using DNA animal signature

identification. Technologies NZ Ltd is supporting this identification system. The

DNA signature is taken while the animal is complete, before cutting and boning

occurs. It is evident that a DNA signature linked to a database with country, farm,

feed, individual animal ID and animal health data will be the minimum

requirements in the near future for post-boning meat ‘production trays.’ A tray can

hold the same cut of meat but from different animal sources. The current New

Zealand AHB animal ID (barcode) method does not provide for absolute tray

traceability in situations where there are cuts from different animals included on the

one tray. EID will enable DNA signatures to be electronically linked to a database

with absolute accuracy and this is vital for food chain traceability. The electronic

linkage can then extend back from the consumer purchasing the product to the

marketer, to the processing factory to the farm and to the individual animal. Such a

system would meet the consumer requirement for ‘farm to fork’ identification. IFMS

could provide the foundation to satisfy consumer traceability requirements totally,

now and in the future.

An industry-led working group, chaired by Jeff Grant of Meat and Wool New

Zealand, began in 2004. It includes representatives of the cattle, deer and meat

processing sectors, Federated Farmers, MAF and NZFSA. The working group is now

ready to consult with its wider membership and to draw in the other animal

livestock sectors. It has been developing a set of guiding principles on animal

identification and traceability.

Worldwide New Zealand is perceived as having a good track record in traceability,

FSA (2002)20 reported “New Zealand and Switzerland are world leaders in the

tracking of animals with the link between individual animal identification and a

spatial GIS database of holdings resulting in a spatial as well as informational trace

of an animal from birth to slaughterhouse”.

RFID tags are available in New Zealand and there has been some voluntary uptake

(e.g. Smart-Track)21.



Component Details



Depth 3 to 4

Breadth 2 to 3 (if combine databases)

Precision 3

Total score 8 to10

3.5.8 United States of America

The USA is both the largest exporter and importer of beef and veal products in the

world. Before 23 December 2003, when the first case of BSE was confirmed in

Washington State, federal authorities did not have a mandatory policy for using

traceability to prevent or diminish the impact of animal health or food safety

hazards.

In 2004 Golan et al.22 reported the existence of several beef traceability systems in

the USA. Though state authorities have promoted some, they have been mainly

private and market driven. Traceability has also been mentioned in connection with

requirements for Country of Origin Labelling (COOL) for beef, other meats, fruit,

and vegetables that are a part of the Farm Security and Rural Investment Act of

2002. The US Department of Agriculture (USDA) has proposed guidelines but final

regulations have not been issued and recently the US congress approved a 2-year

moratorium on this legislation. Furthermore, while the proposed COOL system

would track country of origin, enabling retailers to adequately label products it

would not provide traceability that could link a particular animal or product through

the supply chain. In fact, Section 282, (f), (1) of the COOL legislation states that

mandatory identification systems are prohibited.

The cases of BSE in North America have changed the US government’s perspective

on traceability. On 30 December 2003 Agriculture Secretary Ann Veneman

announced that the USDA will begin immediate implementation of a verifiable

system of national animal identification that will be uniform and consistent across

the country. A team of experts representing industry and state and federal

authorities worked on a proposal for the creation of the United States Animal

Identification Plan (USAIP). This effort was initially led by the National Institute for

Animal Agriculture and is now led by the National Identification Development

Team. The USAIP defines the standards and framework for implementing and

maintaining a phased-in National Animal Identification System (NAIS)23 for the



USA. It is not clear whether the system will be voluntary or mandatory (Clapp

2003)24.

There are currently no mandatory beef traceability systems in the USA. However,

private, voluntary traceability systems are widespread throughout industry (Golan

et al. 2003)25. In August 2003, the USDA launched the voluntary Beef Export

Verification (BEV) program that assures Asian buyers that products shipped

overseas come from animals that were slaughtered in the United States. Under this

program the Agricultural Marketing Service of the USDA conducts process

verification audits for operators eligible to export to Japan under the program.

Before the ban on US beef to Japan (December 2003) beef exports to Japan from

the USA were estimated to be worth USD $1.7 billion in 2003. Talks are currently

underway to resume exports to Japan (see the Embassy of the United States of

America in Japan web site for further details)26. Overall interest in traceability

systems is growing throughout the supply chain, particularly for the export market

and for serving specific consumer segments within the USA.

The goal of the NAIS is to be able to identify all animals and premises that have had

contact with a foreign or domestic animal disease of concern within 48 hours

following discovery. As an information system that provides for rapid tracing of

infected and exposed animals during an outbreak situation, the NAIS will help limit

the scope of such outbreaks and ensure that they are contained and eradicated as

quickly as possible. In May 2005 the USDA published a strategy paper on the

National Animal Identification System web site. The paper proposes a four-year

timeline for NAIS implementation, as follows:

Table 6: Proposed timeline for the implementation o f the NAIS in the USA, 2005 – 2009.

Year Objective

2005 Premises registration operational in all states by July 2005. Initiate animal identification number (AIN) system with tag manufacturers and managers by August 2005. Test animal tracking and automated data collection technologies throughout the year.

2006 25% of all premises to be registered by April 2006. AIN management system fully operational. Interstate Certificate of Veterinary Inspection (ICVI) operational in all states by July 2006. Focus on integration of management systems to forward animal locations/sightings.

2007 Premises registration ‘alert’ in April 2007 to create awareness of 2008 deadline. Animal identification alert in April 2007 to create awareness of 2008 deadline. Incentives instituted in April 2007 to report interstate movements of animals using ICVI or electronic movement permit system. Infrastructure established in October to collect animal termination records at high capacity slaughterhouses.

2008 All premises registered with enforcement by January 2008. Animal



identification required with enforcement by January 2008. Collect high percentage of animal termination records at processing plants by July 2008. Collection and reporting of all defined animal movements by July 2008.

2009 Enforcement for reporting of animal movements by January 2009. NAIS fully implemented; all components mandatory.

Component Details

System type Voluntary at present

Date of full implementation Mandatory by 2009

Depth 3

Breadth 2 to 3

Precision 3

Total score 8 to 9

3.5.9 Uruguay

Uruguay’s beef exports continue to rise from 318,000 tons in 2003 (worth USD

$379 million) to 404,000 tons (worth USD $625 million) in 2004 (INAC)27.

Uruguay has had an individual traceability system for exports to the EU since 2001.

The Ministry of Livestock, Agriculture and Fisheries (MGAP) has the primary

responsibility of administering animal and plant health programs in Uruguay. The

General Directorate of Livestock Services (DGSG) regulates and administers animal

health programs. The department consists of four divisions: Division of Animal

Health (DSA), Control of Stocks and Animal Movement (DICOSE), Veterinary

Laboratories (DILAVE), and Animal Industry (DIA). The mission of the DGSG is to

prevent, control, and eradicate animal diseases, protect public health and food

safety, and to provide expert advice and support to international trade of livestock

products.

The Uruguayan system of traceability related to meat and meat products is handled

by DGSG through two of its divisions, DICOSE and DIA. DICOSE was formed in

1973 and its duties were established by Law No 14, 165 of 1974. The main duties of

DICOSE are:

♦ To control the stocks and movement of cattle, sheep, pigs, and horses

throughout the country.

♦ To control the system of brands and marks.

♦ To control stocks of hides and wool and their movement throughout the

country.



Through DICOSE, farmers are given a code consisting of a region number, a police

station number, and a farm number. Every time an animal is moved, bought, or

sold, the movement must be recorded and the animal accompanied by its

paperwork. The system is similar to having a passport. Police sign all sales

documentation, with copies, going to the seller, the buyer, the Ministry, and the

police. Ministry inspectors check all trucks and documentation at each slaughter

plant before unloading, and farmers are audited at random every year.

With DICOSE Uruguay was one of the first countries in the world to be able to trace

animals back to their origins, and the Ministry could use the system to ensure that

farmers and slaughter plants were complying with sanitary requirements. Once

animals reach the carcass disassembly stage, however, it is virtually impossible to

track each cut because of multiple cutting lines in most plants. Thus, while an

individual cut cannot be traced back to an individual animal, it can be traced to a

specific lot number. On 28 June 2004 Scanvaegt (Denmark)28 signed a multi-

million Euro agreement with the government of Uruguay to supply the country’s 38

cattle slaughterhouses with state-of-the-art traceability equipment. This project was

due to be concluded in June 2005 (www.scanvaegt.com). The Scanvaegt system

should enable all 38 slaughterhouses to be online with the National Meat Institute

(INAC), which will be able to register not only all in-going cattle but also every cut of

meat from each.

Product differentiation is recognised as a key factor in enhancing demand for

Uruguayan beef in export markets. In 2001, the National Meat Institute (INAC)

developed the ‘Certified Natural Meat Program of Uruguay’, with the objective of

differentiating and increasing consumer confidence in Uruguayan meat products.

The program involves international certification of compliance with various

protocols in both the animal production and industrial phases of meat production.

In August 2004, the USDA announced that Uruguay’s Certified Natural Meat

Program’ was ‘process verified.’ The main components of the Certified Natural Meat

Program of Uruguay are food safety, traceability, animal welfare and environmental

sustainability. These are expressed in the following claims made for animals

marketed under the program:

♦ Source verification of animals and products. All cattle can be fully traced

from farm to harvest, fabrication and packaging. Identification of animals is

by means of individual plastic ear tags.

♦ No growth hormones of any kind have ever been administered. Growth

hormones have been prohibited in Uruguay since 1984.



♦ Not in-feed antibiotics. No sub-therapeutic antibiotics have been fed or

administered as a supplement in feed or water for the purpose of growth

promotion.

♦ No in-feed animal proteins. Animals have never been fed proteins of animal

origin except maternal milk. The use of animal proteins in feed has been

prohibited in Uruguay since 1996.

♦ Grass fed. All animals in the program have been grown, raised and fattened

on pasture. Restricted supplementation is accepted to support grazing.

♦ Animals never confined. Animals have never been confined to yards or

feedlots at any time in their lives, and are raised grazing open pastures year

round.

The Certified Natural Meat Program is voluntary: members (producers and

slaughterhouses) join with the objective of adding value to their product.

Independent certification firms verify that members are in compliance with protocol

claims and thus certification involves the entire production chain from animal

production to meat cutting, packing and labeling. The country brand is “Uruguay

Certified Natural Beef” and the label is the intellectual property of INAC and its use

is granted subject to endorsement of the accredited certifying firm.

Certification under this program links the product with its country of origin and

essentially attempts to establish Uruguayan beef as a brand identity (similar to that

of New Zealand lamb). Ultimately, the intent is to certify that the whole country

conforms to a process of producing high quality grass-fed beef.

In March 2005 researchers at the Technological Laboratory of Uruguay announced

that they had developed a DNA testing technique that can determine the tenderness

of meat by measuring the bovine calpain gene (Lewis 2005)29. In order to justify the

cost, DNA testing will be limited at first to producers that supply premium export

markets, and particularly to meat destined for the EU under the Hilton Quota

system.

The National System of Livestock Identification, which is the prime sponsor of

individual traceability, estimates that one million Uruguayan cattle will be included

in the individual traceability system by the end 2005 (Lewis 2005)30.



Component Details

System type Mandatory (for export)


Depth 4 to 5 (for export)

Breadth 4 to 5 (Uruguay Certified Natural Beef)

Precision 2 to 3

Total score 10 to 13

3.6 References

1 Dickinson DL, Bailey DV (2002) Meat Traceability: Are U.S. Consumers Willing To Pay For

It? Journal of Agricultural and Resource Economics 27(2): 348-364.

2 Golan E, Krissoff B, Kuchler F, Calvin L, Nelson K, Price G (2004) Traceability in the U.S.

food supply: Econmoic theory and industry studies. Agricultural Econmic Report Number

830, Econmoic Research Service, U.S. Department of Agriculture, Washington, DC.

http://www.ers.usda.gov/Publications/AER830/ . Last accessed 27 July 2005

3 Souza-Monteiro DM, Caswell JA (2004) The Economics of Implementing Traceability in

Beef Supply Chains: Trends in Major Producing and Trading Countries. Department of

resource Economics, University of Massachusetts, Amherst.

http://www.umass.edu/resec/workingpapers/resecworkingpaper2004-6.pdf . Last accessed

27 July 2005

4 Moe T (1998) Perspectives on traceability in food manufacture. Trends in Food Science &

Technology 9: 211-214.

5 Lewis S (2005) EU Inspectors scrutinise Argentine meat traceability. Food Traceability

Report 5:6

6 Meat and Livestock Australia (2005) Fast Facts: Australia’s Beef Industry.

http://www.mla.com.au/uploads/templates/publicationspdf/Beef_fastfacts_04.pdf. Last


7 Spence S, Murison R, Harden S (1998) Rate of decline of chlorfluazuron concentration in

the fat of cattle. Australian Veterinary Journal 76(1), 54 – 56.

8 Anon (1999) News Note: Endosulfan Residues in Australian Beef. Global Pesticide

Campaigner 9(1), 28 http://panna.org/resources/gpc/gpc_199904.09.1.pdf Last accessed 26

July 2005.

9 Food Traceability Report (11 October 2004) Australia’s livestock traceability scheme gets

ISO certification. 4:41

http://www.foodtraceabilityreport.com/ejournals/issues/view_issue.asp?asection=1066&vo

l=4&issue=41. Last accessed 21 June 2005.



10 Lewis S (2005a) Brazil backs away from mandatory livestock traceability Food Traceability

Report 5:1.

Lewis S (2005b) Brazilian officials propose new cattle ID system Food Traceability Report

5:6.

11 Lewis S (2005c) EU cools toward Brazilian livestock traceability Food Traceability Report

5:7

12 Canada’s Beef Industry Fast Facts: http://www.beefinfo.org/pdf/CBIFF_P.pdf. Last


13 Binkley A (2003) Canadian BSE Incident Highlights Trace Back Importance. Food

Traceability Report 3: 6 – 7.

http://www.foodtraceabilityreport.com/ejournals/issues/issue_km.asp?cf=periodicals/1065

/V3.I9.20030901.A99FB239-B5D4-4331-8812-C3D6E48F9E2E.pdf. Last accessed 21 June

2005.

14 Caswell JA, Sparling D (2004) Risk Management in the Integrated NAFTA Market:

Lessons from the Case of BSE: http://naamic.tamu.edu/cancun/caswell.pdf. Last accessed 7

July 2005.

15 Lawrence JD, Strohbehn D, Loy DD, Clause RJ (2003) Lessons Learned from the

Canadian Cattle Industry: National Animal Identification and the Mad Cow. MATRIC

Research Paper 03 -MRP 7 October 2003:

http://www.card.iastate.edu/publications/DBS/PDFFiles/03mrp7.pdf. Last accessed 17

June 2005.

16 Servicio Agricola y Ganadero (2005)

http://www.trazabilidad.sag.gob.cl/Bovina/Menu/Normativa/Documentos/Doc_Ingles/ma

nual_traza_ingles2enero.pdf. Last accessed 30 June 2005.

17 IDEA project final report:

http://idea.jrc.it/pages%20idea/index%20of%20final%20report.htm. Last accessed 7 July

2005.

18 Meat Industry Association of New Zealand Annual Report 2004.

http://www.mia.co.nz/pdf_files/2004/MIA%20Annual%20Report%202004%20-

%201MB.pdf. Last accessed 22 June 2005.

19 Sanson R, Pearson A (1997) AgriBase – A national spatial farm database. In: Proceedings

of the 8th International Symposium on Veterinary Epidemiology and Economics, Paris, pp.

12.16.11 – 12.16.13.

20 Traceability in the Food Chain A preliminary study (2002) FSA

http://www.food.gov.uk/multimedia/pdfs/traceabilityinthefoodchain.pdf



Last accessed on 26 July 2005

21 Smart-Track: http://www.smart-track.co.nz/animal_tracking.html#. Last accessed 21

June 2005.

22 Golan E, Krissoff B, Kuchler F, Calvin L, Nelson K, Price G (2004) Traceability in the US

Food Supply: Economic Theory and Industry Studies. Economic Research Service, US

Department of Agriculture, Agricultural Economic Report No. 830.

23 National Animal Identification System web site: www.usda.gov/nais. Last accessed 21

June 2005.

24 Clapp S (2003b) USDA Launches Beef Export Verification Program. Food Traceability

Report:

http://www.foodtraceabilityreport.com/ejournals/issues/issue_km.asp?cf=periodicals/1065

/V3.I9.20030901.A99FB239-B5D4-4331-8812-C3D6E48F9E2E.pdf. Last accessed 21 June

2005.

25 Golan E, Krissoff B, Kuchler F, Nelson K, Price G, Calvin L (2003) Traceability in the US

Food Supply: Dead End or Superhighway. Choices 17 – 20.

26 Embassy of the United States of America, Japan. What is the Beef Export Verification

Program (BEV)? http://japan.usembassy.gov/e/p/tp-20041112-80.html. Last accessed 21

June 2005.

27 National Meat Institute INAC: http://www.inac.gub.uy/inacingles/exportacionf.htm. Last

accessed 8 July 2005.

28 Scanvaegt: http://www.scanvaegt.com/default.asp?ID=3694 Last accessed 26 July 2005

29 Lewis S (2005) Livestock traceability gains momentum in Paraguay, Uruguay. Food

Traceability Report 5:4.

30 Lewis S (2005) Chile links meat traceability and quality certification Food Traceability

Report 5:5.

4 Market Perceptions

Leith Pemberton, Leith Pemberton & Associates Limited

4.1 Introduction

Safety has become one of the highest priorities in the food market globally. This

follows recent health scares such as Bovine Spongiform Encephalopathy (BSE)

(“mad cow disease”) and avian influenza (“bird flu”), the spread of foot and mouth

disease and grave concerns about dioxin contamination.

Food related health risks will continue to rise and are compounded by the issues of

food borne illness, genetically modified foods and threats of bio-terrorism in the

food chain. Due to the supply chain’s global nature, security and traceability have

become prominent international food chain issues.

In response to the greater perceived risks associated with food there are growing

lists of both legislative and consumer requirements with which suppliers to the food

chain must comply; the first list relates to market access, the second to market

acceptance.

4.2 Legislative Requirements

Legislative requirements are driven by both biosecurity, and by a desire to ensure

that products meet consumers perceived needs of safety and quality.

4.2.1 European Union (EU) Regulation

The dioxin contamination of poultry feed in Belgium in 2004, finally spurred the EU

into implementing the General Food Law, effective January 1st 2005. This meant

that all stakeholders within the food supply chain must now comply with the EU

general product safety directive (2001/95/EC1) and the regulation (EC 178/20022).

Within the EU groups have formed to respond to the challenges of meeting the

requirements of these new regulations.

EUfoodtrace

EUfoodtrace3 is the European Commission ‘action project organisation whose

primary objective is to develop a practical framework for traceability of food within

the EU organization’. The organisation is charged to develop this practical

framework for traceability of food and develop a framework to plan, model, validate

and implement the traceability system. As from January 1st 2005, regulation



178/2002/EC2 on General Food Law will require food and drink manufacturers to

trace products ‘one step up and one step down’.

ECR Europe

ECR Europe, consisting of retailers and manufacturers, has worked on a best

practice book, entitled “Using traceability in the supply chain to meet consumer

safety expectations.”4

“The booklet offers best practices and key business rules – the do’s and don’ts – of

tracking and tracing. With the emergence of international trade, it is important to

use one language to identify unique production locations, products, series, lots,

pallets. The same accounts for the language to communicate this downstream, to

clients.”5

Despite having guidelines for best practice, there is a widely held view that

manufacturers could be underestimating the scope of the legislation implemented

for the complexity of the traceability processes required. During production,

ingredients go through a transformation, pass through different vessels in the

factory and come into contact with different people. It’s not just a case of tracking

raw ingredients being delivered and products going out; it is tracking the complete

“genealogy” of created products.

There is a perception – yet to be tested – that if companies already meet high level

BRC or EFSIS standards, they automatically comply with the law. The new

legislation stipulates that companies should be able to access traceability evidence

‘on demand’.

4.2.2 USA Regulation

The Code of Federal Regulations (CFR) meets the concerns of reliability, security

and accountability for the USA. The requirements of 21 CFR part 11 deal with

security, e-signatures, and records management.

The Meat and Poultry Products Traceability and Safety Act of 2003 (108 congress

US1202 and US3546) are the relevant traceability jurisdiction documents currently

administered by the CFR.

4.2.3 Impact of Regulation on NZ Exporters Costs

New Zealand exporters are currently getting to grips with New Zealand legislation in

progress – the new Border Security Bill6 – that specifically deals with the

introduction of more stringent security measures by the US authorities in December



2003. This will directly add an estimated $600 to each shipment in New Zealand

Customs and other charges.

Through the Meat Industry Association, the meat industry is coordinating efforts to

avoid duplication and to ensure business compliance costs are minimised. These are

core attributes required for an industry traceability system.

4.3 Market Perceptions

4.3.1 Overview

Approximately one-third of global meat exports, or 6 million tonnes, is affected by

animal disease outbreaks as reported by Meat International 20047.

With the value of global meat and live animal trade estimated at US$33b (excluding

EU intra-trade), this could amount to world trade-losses of up to US$10b, if import

bans extend throughout 2004. Trade losses will likely accrue for the 12 countries

that are facing export bans or market constraints as a result of animal disease

concerns related to avian influenza and BSE.

4.3.2 BSE and Avian flu

The US and Canada account for more than one-quarter of global beef exports

(around 1.6 million tonnes, valued at approximately US$4b). US beef exports, after

reaching 1.2 million tonnes in 2003, are expected to drop to 100,000 tonnes in 2004

if bans remain for the entire year, according to USDA estimates.

As a result of poultry and beef import bans, FAO expects the demand for substitutes

such as pork to increase significantly. This is already visible in Japan, where

shortages of beef and chicken have led to pig meat prices surging 40% in February

following import bans on US beef and Asian poultry.

There are flow-on effects of these bans affecting consumption patterns in other

countries that are not directly affected by the bird flu. For example, chicken prices in

India dropped by one-third, fuelled by the Asia-wide concern over the disease. The

poultry industry was reportedly losing more than US$22m daily due to a crash in

demand for chicken and eggs.

US BSE Discovery

History was made when US secretary of Agriculture Ann Veneman announced on

December 2003 that a possible case of BSE had been discovered on US soil. The



announcement of the first case of BSE in the United States caused disarray in the

international beef trade.

The immediate effect of the announcement caused most of its trading partners to

ban the import of all bovine products from the USA. With these measures the US

effectively lost 90% of its beef export market. Most of these loses came from Japan,

South Korea and Mexico, who in 2002 received 32%, 24% and 26% of America’s

beef exports respectively7.

Beef exporting companies suffered immediate losses as shipments already en-route

to trading countries were turned back without payment. The US Meat Export

Federation estimated this meat to be valued at around US$200 million.

Market Reactions to US BSE

In contrast to what happened in Europe, where demand fell by some 40% after the

discovery of mad cow disease, beef consumption in the US stayed stable.

Japan, South Korea and Mexico who relied heavily on the US for its beef imports,

now looked to other possible sources. Japan sent delegations to New Zealand and

Australia, who as recognised disease free status countries, increased trade directly as

a result of the USA BSE discovery.

Statistics from The New Zealand Meat Producer Jan-Mar 2004 indicate that US

consumers spend over US$879 billion a year on food and the market is worth

US$2.7 billion FOB to New Zealand’s food and beverage exporting sector8. New

Zealand meat and meat products are one of the main exports – worth NZ$1.1 billion

FOB in the year ending June 2003.

Even before the BSE case, enhanced security arrangements, mandatory country-of-

origin labelling (MCOOL), Free Trade Agreements (FTAs) and obesity were four

major issues lying ahead for New Zealand’s meat producers and exporters servicing

the US market.

Canada BSE Impacts

On May 20, 2003, BSE disease was reported in one cow in Alberta. Canada. On

December 23, 2003 another BSE case was reported in the state of Washington in the

United States (Meat International, 20059).

These developments had major repercussions for the North American beef markets.

Specifically, lost export opportunities impacted trade, slaughter, consumption,

prices and production of cattle and beef in the Canadian markets.



Reduced access to foreign markets – particularly to the US from Canada – led to a

large drop in Canadian exports. The recovery has been limited to beef as the

continuing US import ban has meant that live cattle exports remain virtually non-

existent. This is an opportunity that NZ and Australia have both capitalised on in the

Chinese market particularly, where Canada has a significant animal genetics and

dairy technology presence. Developing effective animal traceability would help

ensure NZ maintains this current short term serendipity opportunity, where other

attributes of NZ cattle are permanently valued.

Canadian BSE Outcomes

Beef consumption in Canada increased by close to 6% in 2003. The large gain was

aided by low beef prices and various promotions mounted by the industry to rid the

market of excess supplies

Cattle prices plunged following BSE discovery. Prices were roughly 50% below

average levels in the first four months of 2003. In light of the reduction in access to

foreign markets and declining prices, the production of cattle and calves also fell

markedly. Farm cash receipts for the third quarter of 2003 were 60% lower than a

year earlier.

Receipts might have been lower had it not been for government support programs

that helped to underpin cattle prices and output. NZ abolished agricultural support

programmes in the 1980’s, unlike the USA and Canada who still have significant

farm subsidy programs.

The discovery of BSE has had a devastating impact upon the cattle sector in Canada.

Cattle producers have been hit by lower output, weaker prices, and narrowing

margins.

An integrated traceability system would reduce the financial risk to NZ Agricultural

produce (NZ$15.2 billion exports) whereby any international trading stand down

period due to animal disease notification would be minimised by a fully integrated,

computer based traceability system.

The longer term viability of the sector will also be dependent on the degree to which

international consumers remain confident in the beef supply. This will be impacted

by a greater public awareness about the disease along with the perception that

Canadian and US risk mitigation systems are reliable.

The ability for NZ to learn from the Canadian and USA experiences and then

collaborate with an appropriate solution would seem an appropriate activity for any

NZ traceability initiative to further investigate.



4.4 Consumer role in traceability

4.4.1 Overview

In response to growing consumer concerns about food safety in recent years, both

industry and the public authorities have developed quality and safety assurance

systems (Bredahl et al., 200110). Meat safety crises of recent years led consumers to

rethink their attitudes and behaviour with regard to meat consumption (Burton and

Young, 199611; Buzby, 200112). The emerging issues related problems pertain to

different stages of livestock production and the meat supply chain. Such a changing

environment offers opportunities for producers, who manage to add value to their

products through adapted competitive strategies.

The results from the NZ meat processors involved in this study confirm this concept,

however these added values require a platform of information to interface with the

consumer who ultimately determines “the value”, otherwise the new feature can

become a cost only to the producer in the value chain.

UK retail giant Sainsbury, for example, has introduced and promoted greater

transparency across its organic food chain supply, enabling customers to trace the

origin of all its domestic and worldwide organic produce back to the farm on which

it was grown. New Zealand lamb suppliers who have developed direct relationships

with these retail chains are worthy of farm review, to determine the level of

information these proactive food chain retailers require. The retail power that these

food suppliers hold by effective “safe food branding” cannot be overemphasized

within the food chain.

In the US, clean green organic is now an approximately $8bn industry with a large

and devoted consumer base supported by powerful food supply distribution agents

such as Whole Food Supermarkets in New York (Leith Pemberton & Associates visit

Oct 2004).

Shoppers (devotees) of the Whole Food Supermarket network have allowed their

food safety consumer concerns to be “left at the door “As they enter a store these

devotees have unconsciously moved their trust to the supermarket produce buyers.

There is an expectation of complete food safety satisfaction (branding) by the

supermarket for their consumer clients. This is achieved by the supermarket buyers

only having contracts with suppliers, whose food meets or exceeds the supermarkets

supply side standards. Whole Food Supermarkets control and deliver products

within a fully accountable food chain.



Food safety perception differs between countries (Patterson, 199013; Henson and

Traill, 200014; Buzby, 200112). Consequently, consumer concerns and acceptance of

measures to monitor food safety can be expected to differ.

Although safety issues and safety-related research are strongly intertwined with

traceability, for the most part they have not focused specifically on tracking meat

from the producer to consumer.

Wilson and Clarke (1998)15 and Jack et al. (1998)16 define traceability as the

information necessary to describe the production history of a food crop and any

subsequent transformation or process the crop might undergo on its journey from

the grower to the consumer’s plate.

The development of traceability systems have gained momentum largely as a result

of changes at the consumer level (Downey 199617), and received further impetus

through the rapid development of hardware, software and information technology

since then.

Still the greatest single driving force is considered to be consumers’ increasing

health and safety consciousness. This dates back to work done by (Downey, 199617;

Palmer, 199618; Meulenberg, 199719; Viaene et al. 199820; Northen, 200021; Bredahl

et al., 200110).

In the decade since these consumer traceability characteristics were first researched,

there continues to be a growing need for high integrity food data information. This

process is necessary to allow food trace back, to support a growing food safety

conscious consumer, who are now so well informed in other facets of their life that

they also expect food safety assurance with these consumable products.

Today’s traceability systems (e.g. Sanitel in Belgium) are still basically concerned

with animal health, disease and food safety control. However, they are gradually

extending into proactive management and marketing tools, either through the

feedback of information upstream or the labelling schemes with the traceability

system as backbone. In this way Sanitel enabled producers to comply with the

earlier compulsory EU beef and veal labelling regulations (EC 1760/2000 and EC

1825/2000).

Although the key issues of traceability are reasonably straightforward, their

implementation is complicated, primarily by the number of levels within the chain

and the numbers of producers supplying the chain (Timon and O’Reilly, 199822). A

further obstacle to installing traceability systems is the low degree of vertical



integration in certain livestock and meat chains in specific countries or regions

(Porin and Mainsant, 199823).

There is potential for traceability to delivery benefits at several levels in the supply

chain. Improved product traceability is considered an asset by the food industry,

since it provides opportunities through adding value by raising entry barriers to

restore consumer confidence in food safety (Fearne, 199824). It should also help

reduce production and transaction costs.

Economic benefits of the system include increased efficiencies and savings in several

areas: reduced disease levels, reduced compensation payments, and more efficient

allocation of testing resources. While the fact that traceability involves costs is

generally acknowledged (Calder and Marr, 199825; Hobbs and Young, 200026), there

is no mention of the level, quantification or distribution of these costs among chain

participants.

Such quantification is being developed in the case of genetically modified (GM)

foods. Huffman et al. (2001)27 have estimated that consumers are willing to pay

about a 14% premium for food they perceive as non-GM. This perception could

change with increasing development of GM foods with reduced susceptibility to air

borne diseases and increased shelf life due to genetic bacteria fighting capability or

processing improvements.

4.4.2 The Belgium Study

Meat traceability systems are being established and expanded in many European

countries, with the aim of restoring consumer confidence in meat quality and safety.

A study published in 200428 performed an analysis of cross-sectional consumer data

collected from a sample of 170 meat consumers in Belgium in June 2001. There was

a gender distribution of 60% female, 40% male respondents in the sample, as the

respondents were the main person responsible for buying meat in the household. A

structured questionnaire was used to collect subjective information on personal

health, safety, healthiness, animal and environmental friendliness, price and

traceability.

Hierarchical cluster analysis was used to segment consumers into groups using

behavioural and personal characteristics, and then evaluate perception about

various quality characteristics.

The cluster analysis yielded a three-cluster solution, with segments denoted

enthusiasts, cautious and pessimists.



Cautious consumers were the largest segment, 47.1% of the respondents. These

consumers consider the current quality of fresh meat to be safer and healthier than

the total sample mean.

The enthusiasts and the pessimists are similar in size, each constituting between

25% and 30% of the respondents. Enthusiasts score above average for all fresh meat

quality attributes except price, while pessimists score below average for all attributes

and give an extremely low score for the healthiness of meat compared to five years

earlier.

The following statements were evaluated:

Process Attributes:

♦ I have access to information regarding the medical treatment of the animal;

♦ I can check the animal production method;

♦ I can check the origin of the product (region, farmer, and slaughterhouse);

♦ I can check the meat packaging date;

♦ I have access to information regarding the health record of the animal.

Functional Attributes:

♦ Organisations responsible for monitoring public health can intervene in the

event of a problem in the meat chain (e.g. dioxin scare: only contaminated

products are removed from the shelves, not all products);

♦ In the case of abuses, individuals responsible can be clearly identified and

held accountable;

♦ The meat chain (from animal feed to the consumer’s plate) can be organised

more efficiently to further reduce costs.

The functional attributes of meat products are all, (bar one characteristic – supply

chain cost efficiency), more important to consumers than meat process attributes.

Extensions with respect to process attributes, such as production methods, are less

relevant to the broad public and only interest specific market segments. The

introduction of traceability is regarded as the most urgent in the case of meat

mixtures.

Despite the fact that the pessimists consume meat the least frequently, they regard

the introduction of traceability in the meat chain as the most urgent, meaning that

traceability could be an answer to their concerns. Traceability might contribute to



increased meat consumption (and hence an expanded market selling opportunity)

within this segment.

4.4.3 Consumer requirements

The consumer is not able to find out enough about the quality of food by looking at

it, smelling, and feeling it.

The consumer must trust the authorities to have a set of regulations and controls

that can provide sufficient safety and security. For the consumer, it is assumed that

there is confidence in the experts’ evaluation of risk, which is the basis for quality.

There are strong indications that consumers also place great emphasis on factors

other than price when they choose their food products. For example, they may

consider their own health, nature and the environment, or the health and welfare of

animals. What may appear to be irrational from a purely economic point of view

may be quite rational in relation to these other factors. A traceability system must be

able to deliver these currently known and future unknown consumer requirements.

Economic theories of rationality do not lend themselves to explaining and

understanding consumers’ choices of food. Interpretation of the concept of

consumer interest must include environmental and ethical dimensions in addition

to more individually oriented interests such as price, quality and healthier to the

consumer’s plate.

4.5 NZ Customers Study

A NZ Customer study was carried out by Leith Pemberton & Associates Limited

during the preparation of this report.

4.5.1 Methodology

Nine New Zealand food product companies, were solicited by telephone, then

delivered a follow up market research questionnaire, to provide information on

traceability within their sphere of the industry. The questionnaire provided was then

returned by e mail. The companies included meat processors, wholesalers and

retailers in the supply chain.

The questionnaire topics included:

Section Topic Questionnaire Page

Section One Company Profile Page 2

Section Two: Quality Control / Assurance Page 6



Section Three Business Competencies Page 7

Section Four Manufacturing Competencies Page 10

Section Five: Impediments to Industry Growth Page 12

The following New Zealand based companies were approached:

♦ Progressive Enterprises (Foodtown, Countdown),

♦ Foodstuffs (New World, Pak N Save),

♦ Resuaurant Brands (KFC),

♦ ANZCO Canterbury Meat Packers,

♦ Huttons,

♦ Hullabys,

♦ Mainland Products,

♦ PPCS,

♦ Verkerks

4.5.2 Responses

While the number of companies targeted was relatively small statistically, the

information received was of fundamental market value.

There was a concern at the initial telephone interaction component of the research

to disclose any traceability information to a Government / industry investigation.

This was born out with the lack of fully completed responses and their unwillingness

to supply traceability information that the companies generally regarded as

“confidential company marketing information”.

While the scope of this investigation did not allow personal 1:1 interviews to be

developed ( time and cost) this personal interview approach will be required to

substantiate traceability procedures and project recommendations within the NZ

meat industry participants in the future.

4.5.3 Results of the NZ Survey

1. Product diversification was noted as a high future business requirement by

80% of the responses. This was anticipated to be achieved by generating new

meat products with new technologies including a traceability capability

within their own businesses.



2. Food traceability was regarded by 90% of the responses as an “opportunity

to develop new markets” and currently regarded as a differentiated

marketing position from other NZ meat exporting competitors.

3. An appropriately written RMP (risk management programme) was the

primary local quality assurance control for incoming and outgoing meat

goods.

4. The USDA was regarded as the key international regulatory body of the meat

export businesses surveyed.

The major impediment identified to food traceability in the NZ meat processing or

marketing industry was there was no perceived value proposition for New Zealand

farmers to currently implement an on farm system, which is fundamental for an

integrated traceability system.

4.6 References

1 Directive 2001/95/EC of The European Parliament And Of The Council of 3 December

2001, published in the Official Jounal of the European Communities 15.1.2002.

2 Regulation (EC) No 178/2002 of The European Parliament And of The Council of 28

January 2002, published in the Official Journal of the European Communities 1.2.2002.

3 Website: www.eufoodtrace.org

4 ECR DACH, ECR France, ECR Spain, (2004): ECR Bluebook - Using Traceability in the

Supply Chain to meet Consumer Safety Expectations, (available at www.ecrnet.org).

5 Dariaius Battiwall :Are you on track (and trace)? November 2004

6 Border Security Bill (10 March 2004 No. 53-2), New Zealand Government (available at

www.knowledge-basket.co.nz)

7 MEAT International (2004), “Outbreaks hit global meat exports”.

8 The New Zealand Meat Producer , January-March 2004.

9 Meat International (2005)

10 Bredahl M E, Northen J R, Boecker A, Normille M A (2001): Consumer demand sparks the

growth of quality assurance schemes in the European food sector. In: Regmi A (Ed.):

Changing Structure of the Global Food Consumption and Trade. Market and Trade

Economics Division, Economic Research Service, US Department of Agriculture and Trade

Report, WRS-01-1, May, pp90-102.



11 Burton M, Young T (1996): The impact of BSE on the demand for beef and other meats in

Great Britain. Applied Economics 28, pp687-693.

12 Buzby J C (2001): Effects of Food Safety Perceptions on Food Demand and Global Trade: .

In: Regmi A (Ed.): Changing Structure of the Global Food Consumption and Trade. Market

and Trade Economics Division, Economic Research Service, US Department of Agriculture

and Trade Report, WRS-01-1, May, pp55-66.

13 Patterson E (1990) International efforts to minimize the adverse effects of national

sanitary and phytosanitary regulations. Journal of World Trade 24 (2) 93-102.

14 Henson S J, Traill W B (2000): Measuring perceived performance of the food-system and

food-related welfare. Journal of Agricultural Economics 51 (3) pp388-404.

15 Wilson N, Clarke S (1998): Food safety and traceability in the agricultural supply chain:

Using the Internet to deliver traceabilty. Supply Chain Management 3, pp127-133.

16 Jack D, Pardoe T, Ritchie C (1998): Scottish quality cereals and coastal grains: Combinable

crop assurance in action. Supply Chain Management 3, pp134-138.

17 Downey W (1996): The challenge of food and agri products supply chains. In: Trienekens

J, Zuurbier P (Eds.): Proceedings of the Second International Conference on Chain

Management in Agri- and Food Business. Agricultural University Wageningen, pp 3-13.

18 Palmer C (1996): Practical problems in building effective supply chain alliances. In:

Trienekens J, Zuurbier P (Eds.): Proceedings of the Second International Conference on

Chain Management in Agri- and Food Business. Agricultural University Wageningen, pp

223-235.

19 Meulenberg M (1997): Evolution of agricultural marketing institutions: A channel

approach. In: Wierenga B, van Tilburg A, Grunert K, Steenkamp J-B, Wedel M (Eds.):

Agricultural marketing and consumer behavior in a changing world, Kluwer Academic,

Dordrecht, pp95-108.

20 Viaene J, Verbeke W, Gellynck X (1998): Chain behavior and chain reversal of the

processed vegetable chain. In: Ziggers G W, Trienekens J H, Zuurbier P J P (Eds.):

Proceedings of the Third International Conference on Chain Management in the

Agribusiness and Food Industry. Management Studies Group, Wageningen Agricultural

University, 28-29 May 1998, Ede, The Netherlands, pp159-168.

21 Northen J R (2000): Quality attributes and quality cues: Effective communication in the

UK meat supply chain. British Food Journal 102(3), pp230-245.

22 Timon D, O’Reilly S (1998): An evaluation of traceability systems along the Irish beef

chain. In: Viau C (Ed.): Long-term prospects for the beef industry, INRA, Ivry-sur-Seine, pp

219-225.



23 Porin F, Mainsant P. (1998): Quelles stratégics pour les concurrents de la filière bovine

dans le contexte de l’après ESB? In: Viay, C (Ed.): Long-term prospects for the beef industry,

INRA, Ivry-sur-Seine, pp 125-135.

24 Fearne A (1998): Editorial. Supply Chain Management 3, 112-114.

25 Calder R, Marr P (1998): A beef producer initiative in traceability: Scottish Borders TAG.

Supply Chain Management 3, 123-126.

26 Hobbs J E, Young L M (2000): Closer vertical co-ordination in agri-food supply chains: A

conceptual framework and some preliminary evidence. Supply Chain Management 5 (3),

131-143.

27 Huffman W E, Shogren J F, Rousu M, Tegene A (2001): The value to consumers of GM

food labels in a market with asymmetric information: Evidence from experimental design.

Paper presented at the 5th International Conference of the International Consortium on

Agricultural Biotechnology Research (ICABR) on “Biotechnology, Science, and Modern

Agriculture: a New Industry at the Dawn of the Century”, Ravello, Italy, 15-18 June,

published at http://www.economia.uniroma2.it/conferenze/icabr/papers/.

28 Gellynck X, Verbeke W, and Vindarn J (2004), “Consumer Value of Traceability:

Opportunities for Market Orientation

5 ICT Opportunities

Jeremy White & Louise Hanlon, Rezare Systems Limited

5.1 Introduction

Any traceability system implemented by New Zealand is likely to need to be

compatible with our major importing countries’ domestic systems. The volume of

information required to be tracked and the level of its availability both in the sense

of time and in geography requires a technological solution.

When discussing a technology solution for improved traceability we are in fact

referring to an intersection of a variety of technologies in order to provide a suitable

solution. These technologies might be loosely divided into these different areas:

Identification methods (for example, tags), handheld and smart devices, software

and telecommunications. Each of these areas has specific limitations and benefits

for rural use.

Any specific mention of devices or brands in this section is intended to be

representative of what is currently available rather than a definitive list.

5.2 Identification Methods

The foundation of any traceability system is the ability to uniquely identify specific

animals. Historically this has been achieved through devices such as branding or

tattoos, and plastic or metal tags. More recent approaches include barcodes and

radio frequency identification (RFID). A number of biometric methods can also be

used for unique identification including retinal imaging and DNA fingerprinting.

A trial by Stanford et al in 20011 compared a number of different identification

methods. The results are shown in Table 7.



Table 7 Comparison of identification methods for ca ttle and small ruminants

a) Failure to read due to loss or breakage

b) Reduced speed due to the requirements for cleaning prior to reading

Number of stars indicates superiority of method for that trait, as follows: **** high, *** intermediate, ** moderate, * low

Traditional ear tags are cost effective, but are prone to loss, are susceptible to fraud

and data is labour intensive to load into an electronic system. Biometric methods

offer certainty of identification, but are expensive and slow to process. Biometric

methods or tamper-proof boluses will be necessary for high-value animals, but are

unlikely to be used more widely at present.

RFID tags of various sorts are more expensive than traditional tags, but far quicker

and less laborious to load into an electronic system. Once there is a requirement to

enter data into an electronic system then the higher cost of RFID is justified due to

the savings in labour.

The following sections describe identification methods in more detail.

5.2.1 Brands and tattoos

Brands are not commonly used in New Zealand and are only practical in small

numbers of animals (e.g. thoroughbred horses) due to the time consuming nature of

their application. Hot-iron branding has been prohibited in the UK due to animal

welfare concerns, and less stressful identification alternatives such as de-pigmenting

compounds and freeze branding have been investigated.

Method Ease of application

Ease of reading

Success of reading (a)

Afford-ability

Data transfer speed

Protects from fraud

Protects from entry to food chain

Lack of pain/stress to animal

Ear tags

Plastic dangle **** *** ** **** * * **** ****

Plastic bar code **** * ** *** **(b) * **** ****

Metal ear clip **** ** *** **** * * **** ***

RFID **** **** *** ** **** * **** ****

Injectable transponder

Base of ear *** **** *** ** **** *** ** ***

Axilla ** **** *** ** **** *** * ***

Biometric

DNA fingerprinting *** * **** * * **** N/A ****

Retinal scanning ** *** **** * **** **** N/A ****

Other methods

Rumen bolus ** **** **** ** **** *** ** ***

Hot-iron brand ** ** **** **** * *** N/A **

Freeze brand ** ** ** *** * *** N/A **

Tattoo * ** ** **** * *** N/A **

Ear notch ** *** *** **** * *** N/A **

Photograph/sketch * * *** ** ** *** N/A ****



Tattoos (usually in the ear) are commonly used as permanent identification of pure-

bred cattle, sheep and goats. It is typically restricted to small herds and flocks due to

the laborious application process and difficulty in reading on darkly pigmented

ears1.

5.2.2 Plastic or metal tags

Plastic and metal tags are currently the most commonly used method of

identification in New Zealand. Plastic tags are cheap and easy to read, but are

susceptible to loss or fraud and are labour intensive in a situation where electronic

records need to be kept.

Metal ear clips have been widely used in cattle and small ruminants as a back up to

plastic tags, as these tags are less costly and resistant to loss from tearing than a

plastic tag. However, care must be taken during application, as excessive crimping of

the tag or a failure to allow room for ear growth has resulted in infections which

necessitated the removal of more than 10% of metal ear clips in a study involving

500 sheep in Scotland1.

If these remained the major methods of identification, the high labour cost of

manual data collection and retrieval would limit trace back to a single management

or marketing decision instead of addressing multiple issues such as growth

performance, animal health, genetic improvement and carcass quality.

5.2.3 Barcodes

Barcode style tags are currently required by the Animal Health Board as part of the

national tuberculoses control program. The ability to read the barcodes is affect by:

♦ quality of readers/scanners (ruggedness);

♦ direct sunlight;

♦ environmental conditions (i.e. cold, rain, etc.);

♦ dirt/manure contamination of tags;

♦ quality and size of bar codes;

♦ contrast between the bar code and the colour of the tag.

5.3 Radio Frequency Identification

A radio-frequency identification (RFID, also termed Electronic ID) system consists

primarily of the tag (or transponder) itself, which houses a unique ID number and



potentially other data; and the transceiver (or reader) that reads it. The reader then

sends the unique ID on to a data accumulator (e.g. laptop, handheld) or smart

device. These components are illustrated in Figure 3.

Advantages

♦ Reduced labour needed for recording through automation of tag reading;

♦ Reduction or elimination of human errors in reading tags; and

♦ A reduced need to physically handle the animals.

Disadvantages

♦ Most stock handling facilities will need to be adjusted to take advantage of

the technology;

♦ Tags can fall out, or be removed (as for all ear tag technologies);

♦ Readers must be within the recommended range and orientation in order to

read reliably;

♦ Despite Standards, not all tags, readers, and software are compatible, unless

they have been purchased from the same supplier (trials are necessary); and

♦ RFID tags are more expensive than standard ear tags.

Potential actions:•Screen id/alert•Automatic drafting of stock (e.g. on weight)

Computeriseddata

management

Transceivercontrol box

Antenna

Transponder

1. Antenna emits a signalwhich energises transponder

2. Energised transponder emits identifying signal

Potential actions:•Screen id/alert•Automatic drafting of stock (e.g. on weight)

Computeriseddata

management

Transceivercontrol box

Antenna

Transponder

1. Antenna emits a signalwhich energises transponder

2. Energised transponder emits identifying signal

Figure 3 Sample RFID system



Transponder — the tag or device containing the electronic ID. Transponders for

radio-frequency identification (RFID) can either be active (requiring a battery) or

passive. The Australian beef industry uses passive responders, which possess no

power source of their own. Instead, the energy provided by the transceiver (reader)

enables the transponder to emit a signal back to the transceiver. This means the tag

can last the lifetime of the animal.

Each transponder contains an integrated electronic circuit (the chip) and a

capacitor, which captures and uses energy from the transceiver in order to send a

signal back. Electronic circuits in the transponder can be programmed as read only

meaning that information contained in the chip can only be read. Chips can also be

programmed as read/write, which enables information to be added, warehoused

and transferred to them. Some circuits support a read only part and a read/write

part.

Transceiver — Also known as the reader or the interrogator, transceivers send an

energising radio signal to the transponder, and also act as a radio receiver to listen

for signals from transponders. Transceivers can be powered by batteries or plugged

into a traditional power supply.

The transceiver is either physically attached to a data accumulator such as laptop or

scale head (tethered) or may transmit data to the accumulator wirelessly.

Transceiver units usually comprise a transmitter/receiver, antennae, control unit,

power unit, coupling element and the interface to the data accumulator.

Transceiver antennae can be incorporated into hand-held units such as wands, or

within stationery units such as panel readers that read tags as livestock flow past.

Data Accumulator — any device such as a laptop computer, an electronic scale

head or a hand-held computer, that is capable of communicating with a transceiver

and accepting the information from it.

Software and Databases —link RFID codes to items or animals, store that

information, and enable decision making and data sharing. Data may be managed

locally, or transferred to third party databases to add value and avoid the costs of

local database maintenance.

RFID tags can be used in a number of forms: as an ear tag, necklace, or leg band; as

an injectable implant; or as a bolus. Each of these methods has its own advantages

or disadvantages.



5.3.1 RFID Ear Tags

RFID ear tags may be a small button such as that shown in Figure 3, or they may

comprise part of a visual tag. RFID ear tags are attached to an animal’s ear in a

similar manner to visual tags. Sensible positioning of the tag can minimise ear

damage and tag loss.

5.3.2 Implants

Transponders have been injected into cattle, veal calves, sheep and goats in a variety

of body locations. Miniaturisation precludes battery use so injectable transponders

are generally passive. They are usually implanted in one of three areas: the lip, the

base of the ear, or the anal region, and are not susceptible to tampering or removal

after application.

Implantation at the base of the ear results in a high incidence of transponder failure

and migration from the point of injection. However, recovery of transponders at this

location after slaughter is relatively rapid and successful. Injection of transponders

into the lip of cattle is unsuitable for aesthetic and animal welfare reasons.

Furthermore, in a six-month study of 343 calves, the occurrence of lost and broken

transponders was found to be higher in the upper lip (14.0% lost, 1.3% broken) than

in the base of the ear (5.2% lost, 0% broken). Transponders in the anal region were

protected from failure, although retrieval of transponders from this location at

slaughter can be difficult1.

5.3.3 Boluses

Another method of electronic identification is the use of transponders in an intra-

ruminal bolus. Similar to injectable transponders, ruminal boluses are free from

tampering or removal after insertion. Rumen boluses also avoid physical damage or

pain to the animal which can occur after injection of transponders and avoid the loss

of saleable meat arising from migration of injected transponders.

Loss of rumen boluses through regurgitation is a concern, as regurgitation losses

have reached 46% in calves. However, modifications in bolus shape or weight have

resulted in a reduction in losses, resulting in retention rates of 100%, 98.8% and

99.7% for sheep, goats and cattle, respectively. Failure rates for intra-ruminal bolus

identification have ranged from 0% to 7%, which equal, and in some cases surpass,

the performance of injected transponders1.

Recovery of the boluses post slaughter is of concern to processors. Boluses are

generally recovered in the reticulum, as hanging the animals at slaughter causes



heavier components in the rumen or reticulum to gravitate to the reticulum.

Introduction of automated devices to strain ruminal contents at the abattoir would

probably increase the speed and success of bolus recovery1.

Digital Angel Corp produces implants and boluses which monitor an animal’s body

temperature. This would help managers identify and treat animals before they show

visible signs of disease.

5.3.4 Operating Frequencies

Transponders and transceivers can operate at a range of frequencies. Higher

frequencies may have better transmission ranges and read rates in some

applications. All operate in unlicensed radio spectra, but care is necessary when

selecting frequencies to reduce issues of signal interference with other devices.

Transponders can operate at low, high, ultra high and super high frequency,

although the only transponders proposed for livestock to date have been in the low

and high frequency ranges.

Low Frequency (LF) tags energise at 134.2 kHz and transmit at between 129 and

139 kHz. They are defined by the ISO 11785 standard (ISO 11784 defines a unique ID

format that is used with these tags). A read distance of 80 to 100 cm is appropriate

for livestock applications. Low frequency transmission does not suffer overly from

signal loss caused by body tissue and other materials containing water.

These tags are assembled from a separate chip and a compact wound copper

antenna, which means the tags are suitable for implanting. As the first standardised

RFID tags for livestock, low frequency tags are proven, robust, and a range of

readers are available at reasonable cost.

The ISO 11785 standard allows for both full-duplex (FDX-B) and half duplex (HDX)

tags, and requires that transponders support both variants. Half-duplex

transponders will reply to the transceiver when the transceiver stops broadcasting

the energising signal for a set time. In contrast, FDX-B transponders will reply to

the transceiver at any time. European trials have shown difficulties with mixing both

types of tag, and the Australian beef industry standardised on HDX tags.

High Frequency (HF) tags have been trialled on livestock at 13.56 MHz. These

have a similar read range to the low frequency tags but transmit data 200 times

faster so should in theory have a higher read reliability and more tolerance for

“collisions” (multiple tags within the reader range at once).



A significant amount of Standards definition work has been done in this area, as

13.56 MHz tags are used in other applications than livestock. There have been some

suggestions that HF tag signals are attenuated by body tissue, leading to reduced

performance and missed tag reads, and that metal can interfere with the signal.

Although this is more likely to occur at UHF frequencies, it would make rumen

bolus tags infeasible if this were the case.

Ultra High Frequency tags (UHF: 850 MHz to 950 MHz) are widely used in non-

livestock applications. The tags have high reading speeds and typically also have

long read ranges (greater than 27m). In part, the longer read ranges are achieved by

the use of active or semi-active tags (containing their own battery), which increases

cost and limits tag life.

Super High Frequency (SHF: 2.4 GHz to 2.5 GHz) are being trialled in non-

livestock applications. They are typically 200 times faster than HF, and may support

diversity antennas to reduce read interference. Tags in this space must use complex

“spread spectrum” technologies, splitting data packets across lots of narrow

frequencies. There is potential for competing traffic from wireless networks.

5.4 Biometric Procedures

5.4.1 DNA fingerprinting

DNA fingerprinting has been proposed as a future component of international

animal identification programmes and is presently used to validate the parentage of

highly valuable animals such as household pets, stud livestock and zoo specimens,

or to validate other identification techniques such as tattoos or tags. In New Zealand

Landcorp Farming uses DNA analyses in its elite sheep flocks.

While DNA typing is permanent and tamper-proof, it is still too costly and slow for

routine use in livestock identification. Automation of techniques is currently in

progress and DNA fingerprinting may become a viable option for large-scale

identification of cattle and small ruminants in the future.

DNA fingerprinting is provided in New Zealand by Genomnz (www.genomnz.co.nz)

and Ovita (sheep – www.ovita.co.nz).

5.4.2 Retinal imaging

A retinal image is a photograph of the pattern of blood vessels on the retina at the

back of the eye. Each eye’s blood vessel pattern is unique and does not change



throughout an animal’s life. A special digital camera uses near-infrared light to

photograph the retina while the animal is restrained in a crush.

Figure 4 Unique retinal vascular patterns of 9 indi vidual cows

OptibrandTM provides this service, encoding image data with date, time, and GPS

location into bar code. Some expertise is required to carry out this operation

efficiently, although Optibrand™ states that a trained operator can capture an image

in less than 15 seconds.

Advantages

♦ The identification can’t be lost (unlike tags);

♦ Identification is guaranteed to be unique.

Disadvantages

♦ Reader needs to be within 8 cm of eye to take the image;

♦ Expensive to set up – reader and software is approximately $3785USD;

♦ Skill is needed to take the images; and

♦ Labour intensive for large numbers of animals.

5.5 Smart Devices

Smart devices can be used in conjunction with animal identification to aid in data

collection and animal management.

5.5.1 Hand-held Devices

Handheld devices are a portable means by which to accumulate or access data.

Handheld RFID readers can collect information from transponders and transmit

them via a cable or wireless link to other systems. One Japanese company is already

marketing a cell phone with an inbuilt RFID reader. With adequate coverage a



farmer or inspector could transmit an ID code to a centralised database and receive

back information specific to that animal.

Some software vendors have released products which allow a PDA (personal digital

assistant) to work in conjunction with the main farm management system. One

advantage to using a PDA rather than a regular cell phone is in the larger screen

sizes enabling clearer presentation of any information. However, these devices can

be fragile, so they may not cope with wear and tear out on the farm.

5.5.2 Drafting Gates

Automatic drafting gates can check the RFID tags of stock as they move through

them. This can be used to draw off specific animals requiring attention, or for sale.

For example, animals can be drafted by weight or animal health treatment.

5.5.3 Automatic Milking Machines

RFID allows automated “robotic” milking systems to

accept animals for milking or to divert those not due

for milking (or within milk withholding periods). The

system collects data about the performance of each

cow. This type of milking is spread over the whole 24

hour period with cattle voluntarily choosing to be

milked. Dexcel operates a fully automated milking

shed at its Greenfield site. It has performed above

expectations, but issues such as pasture layout and optimal herd size are still being

researched.

5.5.4 Automatic Markers

These devices can visually mark an animal if it meets specific criteria. For instance,

if the machine is unable to get a reading it can mark the animal so that further

investigation for lost or broken tags can be carried out.

5.5.5 Electronic Weighing Scales

Modern weigh-scales have a number of sophisticated features. Walk over weighing

allows animals to walk across a platform at their normal pace while capturing their

weights. Such systems can also be connected to computers, printers, or other devices

such as drafting gates.



5.6 Telecommunications

While the collection of information on-farm is useful, there is far greater value in

utilising this across the entire farm, or collating certain pieces of information in

industry databases. In order to achieve this, robust communications networks are

required. Rural communities face specific issues in this area mainly related to cost,

coverage and connection speed.

Rural users have typically behaved as “home users”, and traditionally connected to

the internet with a dial-up modem and standard phone line. While theoretically

capable of up to 56kbps (thousand bits per second), rural connections typically

deliver between 30 and 40 kbps, and are only required by law to deliver a minimum

of 9,600 bits per second. Electric fences have been shown to dramatically reduce the

efficiency of dial-up connections, sometimes generating damagingly high voltages

within the telephone circuit.

ADSL (asymmetric digital subscriber line) is a broadband technology that utilises

the standard copper wire phone lines to provide higher connection speeds more

appropriate to business use (up to several million bits per second – Mbps or M-bit).

ADSL is only effective within three to five kilometres of an enabled exchange.

Wireless broadband is achieved using a receiving dish pointed at a local receiver

station. Providing clear line of sight is available, these links have a longer reach than

ADSL, and still achieve broadband speeds. A satellite version of this technology is

also available for very remote locations, utilising a larger dish to communicate

directly with a satellite that transfers information back to a New Zealand earth

station.

For some applications, the lower bandwidth provided by current cellular networks

(typically 40 to 60kbps) is quite sufficient. While coverage can be patchy with a

regular cellular phone, the addition of a short whip aerial will often ensure sufficient

reception for a permanently installed connection. The higher speed “3G” services

advertised by cellular network providers are not yet available in rural areas.

Finally, networks can be extended on farm by using low-power wireless links. With

directional antennas, these can extend hundreds of metres or more. Electric fences,

the enemy of dial-up modems, may even provide low cost, low speed transmission of

data in future.



5.7 Software solutions

Computer software has replaced paper records for most animal management

information, and is the most practical solution for the large amounts of data

involved in tracking and traceability. A number of farm management software

products have been available in New Zealand, although uptake has been limited. The

dairy sector has typically been better placed to justify investment in individual

animal recording software.

5.7.1 Dairy software

Protrack

Protrack farm automation software has been introduced by Livestock Improvement

Corporation (LIC). The Protrack system operates in rotary dairy sheds, and uses

RFID to identify cows as they enter bail. Monitors and keyboards at entry and exit

positions in the dairy provide feedback for staff. In combination with an RFID

enabled drafting gate, the system allows farmers to draft out cows during or prior to

milking (www.lic.co.nz).

MINDA-link

Is focussed on allowing farmers to upload data to the MINDA database managed by

LIC. MINDA-link provides limited feed back and analysis of data (cow

identification, calving dates, and dry off dates) (www.lic.co.nz)..

MINDA-pro

Provides the same uploading facility as MINDA-link, but also has far more

comprehensive reporting features, allowing the farmer to analyse calving dates,

mating, productivity, animal health and genetic worth (www.lic.co.nz).

DairyWIN

DairyWIN is a dairy herd health software package produced by Massey University,

that enables dairy farmers to record and report on all areas of dairy farming activity,

including individual animals (calvings, matings, treatments), herd (bulk milk

production), and physical farm events (soil tests and fertiliser applications)

(www.dairywin.co.nz).

M-NOTE

M-NOTE is a hand-held (palm) software tool that links with MINDA-link and

MINDA-pro to allow the user to view and record individual animal data in the field.

It checks data as you record it in the field. (www.lic.co.nz)



CowPAD

CowPAD allows the export of data contained in a DairyWIN database to a Palm

hand-held computer for review and recording. Events added or edited in CowPAD

can be uploaded into DairyWIN. CowPAD will also indicate which cows in the herd

are listed on the DairyWIN Guide reports (due to calve, due to cycle, not cycled, not

mated, due to dry off, and due to cull).(www.dairywin.co.nz)

5.7.2 Other industries (beef, sheep, deer)

The majority of New Zealand animal recording packages are either aimed at stud

breeding, or are a small part of a wider set of tools (financial, mapping, and crop

records), which adds complexity.

FarmWorks PPlus

This package replaces FarmTracker, which has been around a number of years. It

contains mapping, paddock/crop records and feed budget modules. In addition it

allows recording of stock at a mob level with an individual animal module due out at

the end of 2005. Currently at the mob level it allows recording of livestock feeding,

animal health, treatments, mating, pregnancy testing, births, production, costs and

revenues, and inventory. (www.farmworkspfs.co.nz).

Landmark

This package contains: a cashbook, farm map, paddock diary, financial budgeting,

feed budgeting, invoice, wagebook, and a stock diary. The stock diary is of interest in

terms of traceability, recording information about mobs, groups, or individual

animals. You can record production details for milk, meat, fibre and other stock

related tasks, and import data from electronic devices e.g. weighing scales, ear tags

and pasture measuring equipment (www.lm.co.nz).

Concepts Rural Suite

The livestock module includes livestock histories, importing RFID files, inventory,

animal health treatments, mapping, and planning future events

(www.computerconcepts.co.nz). This software replaces the Endeavour2 software

previously distributed by Computer Concepts.

5.7.3 Australian software

There are a number of packages on the Australian market which will allow recording

of both groups and individual animals. As the farming systems are similar these

could work in New Zealand with some adaptation.



PAM (Fairport)

PAM has not been widely used in New Zealand until its recent selection by Landcorp

Farming. PAM contains mapping, cropping and planning components as well as

features aimed at livestock farmers. Mobs can optionally be nominated as having

individually identified animals. RFID codes can be imported from files, and trait and

mating data can be imported or entered in a customisable way. There are formulae

for trait calculation. Mob records include birth, supplements, sale and purchases,

and milk/wool records (www.fairport.com.au).

Phoenix

Phoenix (Ag-Data) was originally a financial package and now has a livestock

component, Phoenix Farms, aimed at fulfilling NLIS requirements. It supports

reconciliation with MLA records, and integration with a range of RFID devices, as

well as lifetime history and movement reporting (www.agdata.com.au).

Stock Recorder

This product from Saltbush Software gives the ability to record animal details such

as tag number, RFID, breed, weights, daily weight gain, and other traits and health

events. Stock Recorder is compatible with electronic data collectors for scales and

supports recording of mob movements both on and off farm (saltbush.une.edu.au).

Stockbook (replaces Cattle Plus) (Practical Systems)

Practical Systems Stockbook is a recording and analysis program for commercial or

stud livestock producers, and replaces their previous Cattle Plus product. It is

designed to performance record multiple species, and groups animals by mob,

paddock, and property, with many filtering and search criteria.

The stud version of Stockbook provides electronic links to breed societies and

Australian performance recording systems like Breedplan, Lambplan, and Kidplan

(www.psystems.com.au).

5.8 Centralised databases

The crux of a traceability system is the database where all of the farm and individual

animal data is stored. There are a number of databases used in different industries.

There are always issues of data access and privacy in centralised databases. Farmers

need to be sure that their information is secure before they will buy in to a

traceability system – however, this is balanced by the need for quick and easy

access, and interchange with other systems.



5.8.1 MINDA (LIC)

Introduced in 1985, the MINDA database stores information on both individual

animals and whole herds by farm. Farmers can use it to track the genetics,

productivity and health of their animals. The majority of the dairy industry (90%)

uses it.

5.8.2 Agribase (AgriQuality)

Agribase is a textual and geo-spatial database of farm positions, including legal

boundaries, and farm owners and managers. The database farm enterprise details

(livestock numbers and types) for about 110 000 farm units. The information is

collected for the specific purpose of a biosecurity response, rural emergencies and

disease and pest management.

5.8.3 NLDB (AgriQuality)

NLDB was created in 1995, and stores information on the Tb testing and histories of

approximately 75 000 herds of dairy and beef cattle and deer, as well as information

about other species. The primary uses of NLDB are: as a disease management tool

(particularly for the management of Tb and Enzootic Bovine Leucosis); as an animal

treatments information system and as the Pork Industry Board herd register.

5.8.4 SIL (Meat and Wool Innovation Ltd)

Sheep Improvement Limited, was set up in June 1998 by the Meat and Wool

Boards, to operate the SIL genetic database and provide breeding values and other

genetic information through registered Service Providers. With a growing

membership of over 700 flocks and over half of all rams used by the commercial

sheep flock, SIL has become the most important ram breeding tool in New Zealand.

5.9 References

1 Stanford K, Stitt J A, McAllister T A, Traceability in cattle and small ruminants in Canada.

Rev. Sci. Tech. Off. Int. Epiz. 2001, 20(2), 510-522

6 Biopharming Implications

Tim Hale & Shane Leath, AgResearch Limited

Biopharming is just one part of the growing Biotechnology industry which is

exploring and experimenting with different uses for both modified and natural

products worldwide.

TechniFarming is the process of integrating a variety of measuring and sensing

devices into the farm environment in order to provide better information for

decisions, and a more robust and precise view of the processes happening on farm.

6.1 Biopharming and Compliance

Because the process of Biopharming is designed to produce pharmaceutical

products it is generally carried out in specifically designed facilities that meet the

regulatory requirements for the location and in most cases also the regulatory

requirements of the intended market of the product produced. These requirements

are designed to minimize the potential risks through the process to the environment

and too both intended and non-intended end users.

In New Zealand Biopharming and other areas of Genetic Engineering are controlled

under the HSNO act which is monitored and enforced by the Environmental Risk

Management Authority (ERMA).

There is a strict process which has to be followed prior to gaining approval to work

in this area, and with an approval; controls will be confirmed which are currently

monitored by the Ministry of Agriculture and Forestry (MAF) for ERMA.

Controls are designed to ensure the provision, the monitoring, and the operation of

the Facility housing the genetically modified organism (GMO) is sufficient to

prevent the GMO being able to escape or be accidentally released out of its current

environment. Controls also specify the records that are required and the reports that

are to be submitted. They will also stipulate the Regulatory Standard to which the

Facility must operate (different organisms will require different types of facility and

a different standard of containment).

Approval also has to be gained before a GMO can be released from the housing

Facility to a different or the external environment.



While the above briefly describes the regulatory requirements in New Zealand for

Genetic Engineering, Biopharming will generally add extra requirements above

these specifically related to the product being produced. Farm Animals are likely to

be required to be managed in a Good Laboratory Practise (GLP) or similar

environment, and there is a possibility that animals will require specific diets, have

feed available analyzed, intakes monitored or be housed in controlled environments.

Raw material collection (such as milk) will likely need to take place in Good

Manufacturing Practise (GMP) compliant facilities, as will further processing.

Adhering to these approved standards will be requirements to gain compliance with

the United States Food and Drug Administration (FDA) or other pharmaceutical

approving authorities.

Key areas of concern are the ability to avoid contamination of the product at all

stages, and so satisfy the necessary levels of purity or quality, and to be able to

provide traceability via audit trails. Accurate records for all individual Animal

treatments are critical for this to be achievable.

The potential for the ability of products derived from clone animals and eventually

the products from genetically engineered animals (if approval to release is gained) to

be available for consumption by consumers will require compliance with the New

Zealand Food Safety Authority (NZFSA), FDA and other similar regulatory

authorities. While most of these products will be further processed prior to sale,

traceability will again be critical to maintain consumer confidence and clearly

provide the opportunity for choice.

If you add Nutraceuticals and other differentiated or specialty products to this area,

the potential requirements for sound systems of traceability and the ability to clearly

identify the source of a product become more complex all the time, and the ability to

meet these with current technology becomes questionable.

Holding genetically engineered (GE) animals in New Zealand requires that they are

kept in a Facility that meets the ‘MAF Containment Standard for the Field testing of

Animals’. For the physical containment of cattle this requires a double fenced

perimeter at least 2 metres high of specific sized netting. This perimeter is required

to be alarmed on the interior fence to detect attempted escapes and gates are

required to be hung a specific way and kept locked.

All animals are currently required to be double tagged and also identified with a

micro chip, animal locations must be recorded (within the Facility) and numbers

verified regularly. Animal Treatments and manipulations are required to be



recorded for all animals, along with genetic records, births, deaths and the

quantities of products produced.

While some of the requirements are extra and specific to this type of operation many

are also similar if not the same as those that are required to meet processor supply

requirements or recording requirements under the Animal Welfare Act which are

now required of all Farmers. As a Research, Training, and Testing Institute,

AgResearch also has record requirements around the ethics committee approved

animal programs.

Most of the current methods of recording require manual entry of some kind. This

may be entering an animal’s number into scales or milking plant interface, or

transposing paper records into computer software.

GLP and GMP records are mainly paper based as they require signatures of

personnel to verify events or validation of computer based functions.

For a number of years AgResearch has had in place a unique visual market

restriction tag system to identify animals that have a restriction on their use in the

Food Industry because of science programs. These tags are also used as part of the

identity for GE and Clone animals.

RFID and automated systems have the potential to improve the accuracy of records

and simplify compliance by automatically recording animal presence and linking

this to events taking place. There may be additional benefits such as dispensing

individual rations or recording the time of drinking or entry into covered areas for

shade.

If RFID identities are linked to DNA records it will be possible to verify the identity

of animals even if the physical tags or devices are lost or fail.

Savings in labour, improved efficiencies, less stress on animals, and accurate

traceability are all benefits in an industry with high compliance requirements.

6.2 TechniFarming – broader than Biopharming

Radio-frequency Identification is seen as a powerful enabling technology for

TechniFarming. TechniFarming involves integrating many measuring and/or

sensing devices into an integrated information system. Applications range in

complexity from single items such as scales/drafting gates through to integrated

farm management systems through to integrated supply logistics.



TechniFarming concepts offer potential for regular farms, and especially for

controlled farming environments. In this context, livestock identification must be

robust and reliable, and there must be absolute security over the identification (tags

where the ID can be modified are unlikely to be acceptable).

An internationally accepted information transfer protocol will be required for

reading the ID and transferring the data to other devices. A “one reader fits all”

solution is preferable, so compatibility with other radio-frequency identification

(e.g. drench pack, truck or tanker ID) and GPS, wireless networks, and PDAs should

be considered.

We note that RFID is only an enabling technology for traceability and tracking. Like

all technologies it should be expected to become obsolete (similar to RFID taking

over barcodes), therefore care needs to be taken to ensure that the “New Zealand

solution” can be split at the point of reading. Planning for obsolescence is important.

An acceptable secondary system needs to be in place to ensure certainty over animal

ID if a tag is lost. This is particularly true of Biopharming involving GE or clones.

DNA markers offer opportunities in this area. Absolute assurance over the

uniqueness and integrity of the animal identification is paramount – without this,

nothing else matters.

Appendix A Market Research

Traceability Questionnaire, May 2005

TRACEABILITY AND INTEGRATED FARM MANAGEMENT PROJECT: Market Research

Your company is being invited to participate in the New Zealand Trade and Enterprise Integrated Farm Management and Traceability business survey. This survey is designed to explore current Industry understanding, Industry initiatives and future sector growth opportunities relating to the traceability of NZ food products. Company/Organizations Name: Postal Address: Representative’s Name: Company Position: Contact Details: Ph: E-mail Contents

Section One Company Profile Page 2

Section Two: Quality Control / Assurance Page 6

Section Three Business Competencies Page 7

Section Four Manufacturing Competencies Page 10

Section Five: Impediments to Industry Growth Page 12

Section One: Company Profile Tick ONE of the following that apply best to your company √√√√

• Where in the Food Supply Chain is your major company activity

Research and Development �

Farming operation � Freight service � Processing � Food Supply/Distribution � Food Marketing � Other �

Describe other: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

• List Three Primary Company Competencies.

R & D Food technology / food safety � Market Research of consumer needs � Quality Assurance standards � Purchase of products for processing or resale � Manufacturer of product for Market � National Supplier � International Supplier � National Marketer � International Marketer � National Marketer � Other �

Describe other: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………



Tick any of the following that apply best to your company √√√√ • Product Quality Indicate the use group(s) where the majority of product quality standards are generated from for your products to comply to.

Suppliers of raw materials � Sales/Marketing � Contract Manufacturers � Distribution network � R&D (company) � R&D (outsource) � Competitive companies � Synergistic companies � Industry publications � University/ Institutions � Crown Research Institute � Government Agencies � Ultimate consumers of your products � Other �

Describe other: ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………

• Products and Technologies. The target audience for your company’s products is best described as consumers of products from:

Pharmaceutical Companies � Nutraceutical Companies � Cosmetics Companies � The Health Care Industry � Medicines Distributors � Food Producers � Food Manufacturer � Food Distributor � Food Retailers � Other �

Describe other: ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………

What if any, product diversifications are currently included in your business plan: Move upward through the current Product Value Chain � Diversify Through Product Variation � Generate new products with New Technologies � Generate additional consumers for a current product through diversified marketing � Other �

Describe other: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

• Future Technologies:

Is your company currently: Researching or Developing or Introducing Food Traceability as a core sales or differentiated marketing competency ?

No � Yes � if Yes, new technology for Pharmaceuticals � Nutraceuticals � Meat products � Vegetable products � Transportation of foods � New food products � Other �

Describe Other and or Technology being researched/developed or introduced ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………



Section Two: Business Quality Control and Quality Assurance

What Legislative Quality Control standards do INCOMING GOODS have to adhere to for your business ?

Please list as appropriate: a)……………………………………………………………………………………………………………………………b)……………………………………………………………………………………………………………………………c)……………………………………………………………………………………………………………………………

Describe ANY issues or problems with compliance of these incoming goods quality control standards ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………

What Legislative Quality Assurance Standards do OUTGOING GOODS have to adhere to for your business ? Please list as appropriate: a)……………………………………………………………………………………………………………………………b)……………………………………………………………………………………………………………………………c)…………………………………………………………………………………………………………………………… Describe ANY issues or problems with compliance of these outgoing goods quality control standards ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

What Business support departments are contained within your company?

Information Technology Department � Manufacturing Director/Manager � Financial Director/Accounting Administrator � Business Development Director/Manager � Quality Control / Assurance Manager �

Human Resources Manager � Marketing Director/Manager � Product/Project Manager/s � Other �

Describe other: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Section Three: Business Competencies Tick any of the following that apply best to your company √√√√

• Marketing Research

No � Yes � if Yes, what structure

National: Self desk, i.e. Internet � Self direct contact � Outsourced � Other �

If outsourced: explain who: ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………....

International Self desk i.e. Internet � Self direct contact � Offshore employee � Outsourced: �

Other �

If outsourced: explain who: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Describe other: ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………....

• Sales Department

No � Yes � if Yes, what type of sales structure: NZ sales �

Export sales –future plan �

Export sales �



Section Three: Business Competencies Tick any of the following that apply best to your company √√√√ EXPORTERS ONLY TO COMPLETE: CONFIDENTIAL

Annual Export $$ 1 50 K � 51 → 100 K � 101 → 250 K � 251 → 500 K �

501 → 1 M � 1 → 2 M �

2 → 10 M � 11 → 25 M � 26 → 50 M �

51 → 100 M � > 100 M �

Export Regions:

Australasia � Africa � Europe � North America � South America �

Asia �

Why have these √√√√ export regions been selected? ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Section Three: Business Competencies Tick any of the following that apply best to your company √√√√

What opportunities will an increase in FOOD TRACEABILITY capability have for your company ? None � Additional sales in current markets � New product(s) �

New product range(s) � Complimentary sales � New market opportunities � Other: �

Describe other: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Section Four: Manufacturing Competencies

Within your company what manufacturing regulatory bodies does your company adhere to?

European Pharmacopoeia (EP) � United State Pharmacopoeia (USP) � United Kingdom Pharmacopoeia (UKP) � United States Food and Drug Administration (FDA) � United States Department of Agriculture (USDA) � European Medicines and Health Regulatory Authority (MHRA) � International Conference on Harmonization (ICH) � Researched Medicines Industry Code of Practice (RMI) � Therapeutic Goods Association (TGA) � Medsafe � Other �

Describe other: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Section Four: Manufacturing Competencies Tick any of the following that apply best to your company √√√√ Within your company which of the following Government regulatory departments does your company have legislation policy to adhere to?

Regulation on Genetically Modified Organisms, Australia � Australian Government Department of Health Ageing And Therapeutic goods administration � NZ Hazardous Substances and New Organisms Act (HSNO) � Environmental Risk Management Authority (ERMA) � New Zealand Standards (NZS) � Ministry of Agriculture and Finance (MAF) �

What internal quality assurance regime does your company use, if any?

Good Laboratory Practice (GLP) � current Good Manufacturing Practice (cGMP) � Good Agricultural Practice (GAP) � Good Engineering Practice (GEP) � Other �

Describe other: ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………



Section Five: Impediments to Industry Growth Tick any of the following that apply best to your company √√√√ What do you feel are the major impediments to implement food traceability into the NZ meat processing or marketing industry?

Lack of market knowledge �

No value proposition currently for farmers to implement �

High Industry $ investment required � Company tax regulations on R&D � Lack of industry communication � ERMA regulations � Large Competitive International market � No complete industry traceability system has been developed � Difficult resource Consents � Lack of skilled Personnel � Other �

Describe Other:

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

What do you feel the major impediments to International sales growth for the NZ meat industry are currently ?

Tariff and free trade barriers � International food traceability requirements � Poor understanding of different market, product requirements � Lack of foreign investment � Business operating laws : ERMA , RMA � R&D taxation structure for companies � Other �

Describe Other:

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THANK YOU for your time and valuable information supplying data for this New Zealand Trade and Enterprise initiated Survey (NZTE). This is very much appreciated. If you have any additional comments that you wish to share, please note these below. Additional Comments: Meat Market Traceability: Market Research

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Additional Industry Contacts: Meat Market Traceability

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Documents

Livestock Traceability Situation Analysis...2005/09/02 · Situation Analysis 2-Sep-2005 Page 8 of 82 2. Market access for some New Zealand meat products at the commercial level is