Tracing Food...Who Pays?

[charliep]

Interestingly enough, had a conversation about tomatoes.

http://uk.reuters.com/article/healthNews/idUKN1745688020080718

Can any supply chain afford not to have a traceability system? The organic supply chain is short with easily identifiable participants and likely protocols at each stage. In the case supply chains with multiple participants, can the system go the same route?

Once a supply sorts out that traceability the next stages are who commits to what and how costs are minimized.

[charliep]

Perhaps part of differences is between organic and commodity markets. Organic is a consumer pull system where the customer tells the value chain (notice my word) what they want and the members of the supply chain work to make it happen (at profit for everyone). In the commodity world, farmers produce and hope to sell. There are few if any transfer of information/benefit up and down the supply chain (not value chain). Traceability is one of the steps along the road to better information sharing.

[parsley]

Dear Tomato Talker,

And if the product/grain/forage was sold clearly marked SOLD FOB FARM..................

What financial and legal responsibilities would farmers then have?

Zip.



Parsley

[charliep]

So a farmer who stores their canola in a bin treated with malathion (either accidently or on purpose) and jeopardizes the relationship with a Japan shouldn't be held accountable?

http://www.canola-council.org/pesticide_link2.aspx

[charliep]

To go back to sidvicious02, we have a good traceability system today in grain today and that allows us access to markets. If we consistently fell out of specification on grains, best case scenario will be that traceability is a requirement included in contracts by buyers (no choice then if Canada wants to do business) or worst Canada is locked out of markets.

Your point may be that current safeguards are enough and there isn't any need to do more. Thats fair.

[parsley]

No, charliep. Jeepers. Sigh. I forgot you're accustomed to dealing with the Board.

I was thinking more along these lines:

The farmer keeps a mutually agreed upon sample representing his responsibility.

He is only responsible for the production end,(and perhaps the cleaning, and value-adding or however long the grain remains in his hands).

Then the grain moves on.

When the grain then enters the transportation sequence, for example, or the elevator, for example, it no longer is the farmer's responsiblity to be paying for traceability or paying for clean-up disasters.

If the farmer poured on malathion, and had a recall, he would pay what his sample reflected.

If the elevator poured on malathion, though, the farmer would not suffer any action.

If the ocean vessel dumped diesel on the grain, neither the elevator nor the farmer would suffer.

It is prudent if the farmer sells FOB farm.

Cutrrently, if the CWB sells grain, well, you know what happens... demmurage, deer poop, whatever train wreck happens, the CWB will be more than willing to download the cost on the farmer. Including recall, I'll bet.

Does anyone know if grain has been recalled?

Parsley

[sidvicious02]

again i'm a little late with my response here, but lots of different points so i'll try to cover with MY OPINION on them (Parsley i'll take a shot at your numerous questions/points)

Costs of these sorts of programs are probably born by everyone in the supply chain to some degree...at least initially. In some cases the end user will pay if it's an unusual request and the premium may/may not trickle down to the producer for any additional work. However in enough cases it's just going to be born by the bottom end of the supply chain. End user requires it...and the customer is always right...even if they are unwilling to pay for it, and often it can still be better than losing the customer to the competition (i can think of one perfect example, but i'm not free to share unfortunately). For something like the sampling procedures to protect against unregistered varieties in CWRS the grain companies pay for the costs upfront. If this is the only way to resolve a potential issue in the multi-millions of dollars...it's a small price to pay for them. Now we can get into a discussion over whether those costs get passed down to the producer indirectly....but i'm not going to start that discussion.

As far as allowing producers to keep samples on their farm and for those samples to be binding i can't imagine that ever working. The reason the sample & seal process works at delivery is because both parties are present to sign verifying the sealed bag contains a representative sample of that load. If both parties aren't present there is potential for tampering of a sample and don't think there aren't some people out there that would do it. I've experienced it myself as a grain buyer catching a producer trying to misrepresent his grain. No one wants to get the broad-brush treatment, but you know there are bad apples out there.

Bottom line is, the program is designed to look after the worst case scenario that i can't imagine ever happening. The easier a problem can be traced back to the offending farm the better for everyone (even if you don't like the CWB i don't think anyone would want them to have to eat a 30million rejected vessel because some lunatic would sprinkle rat poison in the wheat - that comes out of your, and my pockets at the end of the day whether we like it or not). The potential for that $30mil bill finding it's way back to the bad apple should be a pretty adequate deterrant. And besides, customers are increasingly demanding traceability and if we don't provide it, someone else will and our market access will begin to erode.

[parsley]

Sid,

Thanks for taking the time to respond whilst you could be fishing for perch in these rainstorms when they like biting in certain places. Waist high in water casting with live bait.


My idea was that the sample would be taken at the delivery point, after the grain left the farm, with both present. That is quite often what happens now.

When the load is ready, it is taken to the elvator, and representative samples are taken when unloading with both elevator agent and farmer present.

Two samples would be sealed and tagged, and initialled/stamped/signed/whatever, one for each party to take and store. Mostly done all the time now anyhow.


For example, with regards to the Export Manufactured Feed Agreement samples, it has been done routinely since it's inception, because the CWB regulatory policy required it. Feed companies like Cargill, are required to keep a representative sample.

Of course, the farmer gets quietly stuck with the bill, because the CWB was more than pleased to approve of policy which would clearly stick the farmer with the bill for a corporation's exporting identification system. Not the corporation's fault, I might add , as it is the CWB who theoretically, is supposed to stick up for the farmer.

I would assume that in the future, the CWB would be more than willing to expand traceability, and completely download the cost on the farmer as they have already set the precedent.


HENCE MY BROACHING THE ISSUE OF WHO PAYS.

The customer is always right, sid. But the pre-planning beforehand will determine who actually pays to make that customer happy.

If the price for a farmer's grain is set FOB, the rest of the chain's payment-proportioning doesn't matter to the farmer.


Parsley

[bduke]

Each year more grain is hauled off of farms by commercial truckers. In fact I haven't accompanied one load of grain from last year's harvest. Therefore sampling would need to be done while loading.

Truckers are also backhauling and contamination could be in the trailers....fertilizer, meat meal, saw dust, other grains...whatever...Bill

[sidvicious02]

hi Parsley,
i'll be the first to admit, i am not much of a fisherman, but there is no better than fresh panfried, i will say that! No rain out our way the past few days though so no help there.

I think i may be misunderstanding you a little bit on a couple of your points. As far as buying the grain FOB farm, i don't think that can truly ever happen though because the system can't afford to test every load that comes in the elevator for every single potential contamination problem. Heck, I think DNA verification on a sample is something like $500 per. When you start adding in chem testing for certain contaminants the cost is going to skyrocket.

I do somewhat see your point on the CWB though, they will fold quicker than the Maple Leafs to a customers' will and not even try to push back. Though i must say from my experience, the CWB is quite good at ramming those costs back down the grain company's throats (see CWB malt protein premium program).

I don't suspect the system will get too much more complicated or costly then what we already have though. The sealed sample system works well to protect all parties at it is traceable through all links of the chain. I suspect someday it will be required that all producers keep every last minute detail on their individual production methods (ie fert rates, chem/date applied, etc, etc) but most do that already so not a big stretch.