The latest buzzword in the grain industry is "traceability." Another phrase for traceability is "identify preservation."
We are all looking toward the future and envisioning the ability to identify characteristics of the product from farm gate to consumer’s plate. Everyone looks at this process and says it certainly adds value and is definitely needed. But most of us are having trouble justifying the investment in the processes because the return is not yet obvious.
The return will be a function of the marketplace recognizing value and paying for it, being forced to meet the competition or reducing our internal costs to make us more competitive. If any three of these results, or combination of the three occurs, there is a benefit that can be compared against the cost of installing a traceability system.
Traceability is a business process that needs to be established in order to trace the characteristics of products from the farm gate to the elevator, miller or processor.
From the processor to the retailer/consumer, bar coding and inventory control systems form the basis of a traceability program. Once the product has been manufactured, the processor generally has a good delivery information system. This is the final component to a traceability program.
The early components of traceability require information to be gathered at the farm gate. HACCP and ISO programs require the setting up of processing and the documentation of these processes. In a traceability program, technology can be an enabler for gathering data about acreage planted and grain characteristics as well as applications that have been applied to the field. Prior applications and land use history also can be captured.
All of this can be done with a web-based backbone that enables the database to track land use, contract management and product characteristics to be captured in an online environment. This information is then available to the farmer and processor/miller through a web-based environment.
Once the information is online, it becomes very easy for a processor to be able to report grading and payment information through an individual farmer web site.
There will be costs to establish a traceability program in addition to maintaining and operating the program. The question is, can this program be an electronic contract management system that provides greater data, both in terms of history and current year’s management?
Agribiz.net, based in Guelph, Ontario, Canada, is one of the few technology companies that has applied Internet technology to contract management processes.
Data is available to the farmer through our web site, www.agribiz.com, by use of an e-contract system. The site can identify information around the certificates, including the characteristics of the load, the wagon and the field. Elsewhere in the database, the field number can refer to specific acreage and varieties as well as management practices. This allows the processor to understand what he is receiving.
A traceability program can become very processor centric. Agribiz.net has built a system that allows data to be gathered electronically as an e-contract system that delivers traceability information to the processor in a format they can use going forward. The processor generally has a distribution tracking system that provides information on the product going out the door.
The final frontier in the creation of a traceability system is to ensure the processor can track the product in a way that ensures the customer receives what was ordered. This will require a review of the processing operation to ensure that the characteristics gathered from the farm gate remain homogeneous throughout the processing operation.
Traceability systems are new. Many people are talking about them but not investing in them.
If you approach traceability on the basis that you are going to be gathering management information to help the farmer, processor and retailer in the management of their businesses, you have the foundation for a traceability program.
Once you have the information and it can be used to provide added value to the customer, you have a traceability program that can justify the cost.
Until the customer is prepared to pay for the value-add, the foundation of the traceability system has the potential to reduce 3% to 5% of the costs in the system.
As the world faces more issues around understanding the characteristics of food products, those players who become involved in gathering information and managing their business processes electronically will find they have a head start in adapting to the world of traceability.
There is nothing magic about it. If we want to know what’s in the end product, we need to gather the information along the way.
Technology has its challenges, but it does an excellent job of providing the information in real time when management and purchase decisions need to be made.
Grant C. Robinson is chief executive officer of Agribiz.net, based in Guelph, Ontario, Canada.