I recently came across traceablecoffee.org, a program that allows consumers, through a code on the bag, to identify their coffee grower. There are over 100 small growers on the site and for each one there is a brief description of their farm. Here, traceability is all about boosting the farmers' income. If you particularly like your cup of joe in the morning, you can send a tip directly their way.
It seems like a great program, but it raises some big questions about the state of our domestic traceability. If we can trace a bag of coffee from a small farm across continents, why can't I check if the carton of eggs in my fridge has been affected by the recent recall? The truth is, there just isn't much incentive for firms to do it. While thinking about my coffee being handpicked on a small farm in Peru might make it more appealing, nothing damages a brand like a daily contamination check. That's not to say there no benefit to domestic companies. Traceability can mean a lot to supply management, allow for product differentiation and better marketing, but it just doesn't offer a payoff for producers when it comes to food safety.
There are three primary causes for shifts in traceability. The first, as we already discussed, is the individual producer, who is usually motivated by product differentiation. The second common cause are industry groups. When industry groups create mandates for traceability, it is usually motivated by food safety. Contaminations that make the news affect the whole market, but fast identification of a source can reduce consumers' mistrust of a product. Finally, the government can change the traceability standards either through mandates or incentives.
On the surface there's good reason to believe that the consequences of unsafe food, if priced properly, will give firms the motivation to choose a socially optimal level of traceability. This notion, however, overlooks the serious barriers to an individual firm making consumer-side changes. It's bad branding to be the only company the apparently needs a health checker, and thats assuming that consumers even notice that sort of change on a single label. Imagine, instead, that the next time there's a salmonella outbreak among eggs news articles mention where to find the code and check if your carton is safe. Maybe you could even do a quick online check while you're in the store. Not only will this reduce the outbreak of disease, but the product-avoiding hysteria that often accompanies it. We might even see generally safer products as accountability increases. Of course, this all relies on the changes occurring one industry at a time, no small accomplishment.
What remains to be determined, is what we can do to get these changes happening. Increasing the cost of an outbreak to companies might increase each individual firm's incentive, but it doesn't mean much to an industry group. Of course the government can mandate these changes, but likely not as efficiently as an internal industry program. Offering incentives to industry groups raises a whole other set of questions. How do we reach the worst offenders without rewarding bad behavior? Are we creating unfair competition? Can we safely offer some deregulation in exchange? Grants that cut the cost of implementing new traceability standards could offer one of the less complicated solutions. As industry groups would still bear some cost in the process, there's little chance of totally unjustified traceability. Of course, there are hundreds of ways to work with industry groups, but it's time that consumers start to see some of the benefit of a technology that clearly already works.
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