Do we need tracking of farm produce from paddock to plate food to satisfy consumer expectations? Phil Edmonds explores this vexed question.

There’s no question that a comprehensive traceability system is in the sights of those strategising the future growth of food production and export in New Zealand. And those close to international consumers believe that the landscape has changed this year with food brands set to face more demanding calls for more information on food origin.

The think tank Koi Tū, led by Sir Peter Gluckman among others, released a report titled “The Future of Food & the Primary Sector” in June noting traceability and “origin marketing” is becoming more important in the post-Covid-19 environment, and “New Zealand needs to develop and market a national accreditation scheme that reflects the nature of our future food production and is evidence based.”

But have you heard all this before? Almost certainly.

To a large degree, this plea is no more nor less than many have been seeking for some time.

Emulating the Irish

About five years ago there was a sense New Zealand needed to scramble quickly to replicate Ireland’s Origin Green traceability scheme, which was having success in both raising the profile of  Ireland’s food products and getting them fast-tracked onto shelves in offshore markets. But that urgency faded.

A national quality assurance scheme to match the likes of Ireland’s is no closer to becoming a reality than it was then. Why is that?

For a start New Zealand does not have an existing regulator that is mandated to take charge of such a system. Ireland made a step in this direction in 1994 when it created Bord Bia (the Irish Food Board), a state agency with the sole purpose of promoting Ireland’s food overseas.

The Ministry of Primary Industries took the initiative around 2017 to explore the possibility of matching Ireland’s scheme with our own national traceability system, but MPI has no role in accrediting food provenance – its remit is only to manage food safety and biosecurity.

This is an obvious block on the potential to develop mandatory provenance programmes.

We have a disconnect in New Zealand between MPI’s production and biosecurity, farm-focused approach and the growing need for a market-focused approach to providing quality assurance.

Recently egg producers wanted to introduce an industry egg traceability initiative to provide assurances about the conditions in which the egg originates, but have been told by MPI there is no basis for compulsion because it is not a food safety issue.

This barrier does not appear to be closer to being resolved. In the government’s recently launched Fit for a Better World strategy to grow the primary sector there is a lot about understanding consumer needs and preferences but no prescription on how to deliver on those needs with a partnership between government and industry. Traceability is not mentioned once in the founding document and, arguably, the nearest it gets to acknowledgment is through a reference to the importance of “investing in systems, data and decision support tools to help land managers make better environmental and biosecurity choices.”

Disconnect between production and biosecurity

Is industry-wide, mandated traceability just too hard for New Zealand?

At the moment, Lincoln University agribusiness expert Nic Lees regrettably thinks so, but to our cost.

“We have a disconnect in New Zealand between MPI’s production and biosecurity, farmfocused approach and the growing need for a market-focused approach to providing quality assurance.

“What it comes down to is we don’t do things until we have to. Without having suffered a crisis we have been content to continue trading on the perception that New Zealand is a sustainable place producing safe food and that we are well known in the marketplace. But Covid-19 shows that bad events do happen out of the blue and so we shouldn’t continue believing that perception is enough, or will last.

“The trouble is, it’s just very hard to put precautionary measures in place like traceability systems in advance and get farmer buy-in. M bovis has shown us that.”

Lees says the reluctance to come together is a shame because we have got great “sweet spot” attributes to convey via a mandated traceability system.

“Pasture fed, biodiversity – there are things coming into alignment with consumer expectations but we are not able to verify these attributes in a way that people can evaluate what we are doing.”

This perspective tempers the likelihood of Koi Tū and others getting their wish anytime soon.

But any block on progress shouldn’t be read as a blanket refusal by farmers to engage, says NZX Head of Analytics Julia Jones, who is conscious of a need to understand the demands of tracing provenance from a farmer perspective.

She says to be fair to farmers, the reluctance to invest in technology to support transparency across the supply chain is not helped by uncertainty about what we should be measuring and making more traceable.

Part of this is due to the diversity in consumer concerns – one minute it is animal welfare, the next it is climate change, and so on. “What is clear though is that consumers are never going to want ‘less’, or fewer guarantees about what they are buying. And they’re not going to start thinking ‘forget the planet’, or ‘never mind how we deal with sick cows.”

What is even clearer still is that consumers won’t expect to pay for more assurances.

Paul Ryan, CEO of Trust Codes, a New Zealand-based provider of traceability technology services that connect consumers with the product source, fully agrees. “I have never met a consumer who has said yes, I’ll pay more for product assurance. Imagine saying I am not going to tell you the best before date unless you pay a premium. Showing that you have your supply chain under control will become more of a norm and if a product can’t demonstrate this consumers won’t buy it.”

Julia Jones says “It does come back to the consumer and what they want. With all consumers there is a hierarchy of wants, and there will be some that are deal breakers. For some it will be carbon free and Fonterra’s Carbon Zero Milk will obviously have appeal to that particular audience. But we still don’t really know what we need to measure.”

That does not represent an excuse not to act, however.

Jones says that putting provenance assurance in the too hard basket and relying on price, as we have been accustomed to doing, is not sustainable. “If we can’t get the price tomorrow that we have obtained today – so to speak – we have a problem. There will always be someone who will want to buy our product but they just won’t pay enough money to enable our businesses to survive.”

The trouble with high consumer expectations is that brands, in the battle for acceptance, tend to over-promise on things like traceability, which has the unfortunate consequence of raising expectations further still.

Paul Ryan says we need a dose of realism around what the consumer can rightfully expect from better traceability.

“There’s a lot of people out there promising the world – saying things like I can track a cow to your plate, for example. And that can be massively damaging to your story because it sounds great to say it, and it’s almost the ultimate promise of technology, but also exposes a heap of reality around how products are made.

“In terms of meat and dairy you can’t actually say a steak or glass of milk came from a particular farm. I don’t believe anyone can do that unless they’re a very small-scale producer.

“The fact is dairy and meat are produced under an aggregation model. But that doesn’t necessarily need to matter if we get back-end certification such as pasture-fed, water quality in a catchment, and so on.

“I think we can say that ‘regionally’ this is where your milk has come from. It’s like in the old days the local butcher would tell you they had lamb from Otago – we are going back there but in a digital way.”

Traceability – Cost or investment?

The ugly question about who in the supply chain should pay for the cost of complying with consumer wishes can’t be ignored. But a constructive consideration of this might focus on whether traceability should be seen as a cost or a form of investment.

Jones says traceability shouldn’t be seen as a cost because a cost is seen as something that adds no value to your business. If the task itself can be made easy, farmers should be able to see improved traceability as a win-win.

“The more we monitor, the more we have the ability to make better farming decisions.”

Nic Lees believes there’s grounds to treat traceability both as a cost and an investment without either having negative connotations. Like Jones, he sees the potential for farmers to put data figures around how farms are working and help them understand their own operations better. But it also has to be seen as an essential cost of getting products into the market. “Whether it is Nestlé, McDonalds or Danone, they require a level of verification on animal welfare and sustainability, and if you can’t provide it you can’t sell your product.”

Paul Ryan is unequivocal on traceability being seen principally as a cost of doing business. Working with brands that are closest to the consumer, Ryan sees brand owners faced with the immediate prospect of either complying with consumer wishes or letting their attention drift to a competitors’ offering.

Wherever the line item appears on your (or someone else’s) financials, Julia Jones says farmers shouldn’t be fatalistic about yet more compliance.

She’s optimistic that New Zealand farmers can and will contribute to a traceability system that satisfies the needs of consumers, partly by recognising there is a lot they do at the moment that doesn’t need to change – it just needs to be recorded.

Technology will enable that as long as it is strategic. “If you have six different scanners on a farm for different things that won’t help – it’s just as easy to continue writing things in a notebook.

There’s a lot of technology put in place with good intentions but might not be efficient. But a fit-bit for a cow, for example, means farmers are only being asked to validate data, not manually enter it.”

National traceability scheme for the New Zealand story

So, what chance is there of all participants, farmers though to brand owners, in partnership with government, coming together to develop a national traceability scheme as deemed essential to secure our market position and authenticate our New Zealand story?

Julia Jones has been a member of the Primary Sector Council, which has investigated the potential.

She says “I think a national framework would be great as long as it provides a ‘guiding star’ representing the values we want to project but not be prescriptive about how we get there. This would enable farmers to adhere to the values their own way. It wouldn’t work as a blueprint.”

While a firm believer in the merits of a national traceability scheme, Nic Lees warns that it would need to have some backbone to give consumers confidence it was meaningful. “Australia, for example, has developed a National Traceability Framework but it is pretty underwhelming, essentially business as usual, and nothing transformative.”

Paul Ryan, whose company Trust Codes works with Australian companies and who has been on traceability standards steering groups in Australia, does not think there should be a grand strategy in New Zealand. “The danger with frameworks is that they stifle innovation. All of a sudden you have a whole bunch of processes that look no different than each other.”

This risks food producers settling on a minimum standard and losing sight of what the consumer really wants. And it also takes away a motivation to differentiate products from others.

This is largely where we are now. Silver Fern Farms, Fonterra, Synlait, Zespri and others have all actively invested in traceability on their own terms to further their own commercial ends.

As much as we’ve got a lot to gain from telling a national, evidence-based story, it might take something even bigger than Covid-19 to realise it.