Washington Insider --Wednesday

Better Tracking of Food Products

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

September 30 Farm Bill 'Deadline' Not Likely To Be Met

Senate Ag Chairman Pat Roberts, R-Kan., said this week that Congress will not clear a new farm bill before the current law expires September 30.

"I am afraid we are going to go past the September 30 date,” Roberts told reporters. “Miracles can happen. We are not giving up.” However, he said he did not want to talk of an extension as that would cause still-more delays in getting the bill done.

Roberts said the four ag panel leaders reconciled differences in the commodity title but are awaiting a score from the Congressional Budget Office. Indications are those changes would let producers in drought-hit areas to update yields, but there would also be a provision barring those who have not planted their base acres to a covered commodity since 2009 to no longer claim any farm program payments.

Roberts said no agreement is yet in place on work requirements and waivers relative to the Supplemental Nutrition Assistance Program (food stamp) policy. “I think if we could get the waiver challenge behind us, working with the administration, that would be very helpful. If we do that, I think we could get ourselves to a farm bill,” Roberts said.

USDA's Perdue Lays Out NIFA/ERS Move Timeline

USDA Secretary Sonny Perdue sought to reassure top ag lawmakers about USDA’s plan to relocate the Economic Research Service (ERS) and National Institute of Food and Agriculture (NIFA) out of Washington.

A six-page letter to Senate Agriculture Chairman Pat Roberts. R-Kan., and ranking member Debbie Stabenow, D-Mich., responds to questions from the two senators about USDA’s proposal.

Regarding the lack of cost/benefit analysis, Perdue said there is not enough data yet to project how many staffers will leave, but said USDA will pursue a “focused hiring effort” between June and December 2019 to re-fill those positions. Perdue dismissed criticisms that moving ERS from an independent research arm to under the Office of the Chief Economist (OCE) would make it vulnerable to political influence.

“We are confident that ERS will remain a trusted and objective source of information for the food and agricultural sector and provide policy relevant analyses with better coordination within OCE,” he wrote.

USDA wants to choose the new locations by January and open them by June. Potential sites have until October 15 to let USDA know they are interested.

Washington Insider: Better Tracking for Food Products

One of the most persistent food industry problems is exposure to contamination that sickens consumers. Even prominent national firms have suffered costly incidents recently and the industry has been reluctant to commit to increased surveillance because of its cost and impacts on the supply chain. This week the New York Times is reporting that a major firm is trying an unusual approach.

It says that when dozens of people across the country got sick from eating contaminated romaine lettuce this spring, Walmart did what many grocers would do: It cleared every shred off its shelves, just to be safe.

However, Walmart now claims “a better system for pinpointing which batches of leafy green vegetables might be contaminated.” After a two-year pilot project, it announced this week that it would be using a blockchain — the type of database technology behind Bitcoin — to keep track of every bag of spinach and head of lettuce.

By this time next year, more than 100 farms that supply Walmart with leafy green vegetables will be required to input detailed information about their food into a blockchain database developed by IBM for Walmart and several other retailers exploring similar moves.

The burgeoning blockchain industry has generated a great deal of buzz, investment and experimentation, the Times says. Central banks are exploring whether it would be good for tracking money flows and developing countries are considering such a system for food. Eastman Kodak has explored a blockchain platform that could help photographers manage their collections and record ownership of their work, while a group of reporters and investors are using the technology to start a series of news publications.

But essentially the only real-world uses have come from cryptocurrencies like Bitcoin, which use their own blockchains to store transactions, NYT says. Walmart is now trying to bring blockchain into the lexicon of everyday consumers. “It is the first real instance of doing this at scale,” said Brigid McDermott, vice president of IBM Blockchain.

For Walmart, the initiative fits squarely into two key strategies: bolstering its digital savvy and emphasizing the quality of its fresh food to customers. The blockchain could also save Walmart money. When another food-borne illness hits—like the E. coli outbreak affecting romaine—the retailer would only have to discard the food that was actually at risk.

The Times notes that the technology faces questions from critics, who are skeptical of whether the blockchains being developed by corporations are all that different from old-fashioned online databases.

The original blockchain was the online database on which all Bitcoin addresses and transactions were stored. The database is maintained and stored by a network of volunteer computers, so that no single institution, like a bank, is required to keep the records. Because several computers have the records, it is much harder to change or fudge the data after the fact.

Many large global corporations have been studying how they might use a similar database design to keep records among a wide array of parties — like the hundreds of people involved in moving spinach from the farm to the grocery shelf. The system that Walmart is using, IBM Food Trust, has been developed for consumer companies, including Dole, Wegmans and Unilever, to track products moving through the supply chain.

At each stop along the way, Walmart will require an entry on the blockchain, signing off when handlers receive it and then when they move it on. IBM and Walmart say they are already tracking other products like yogurt and poultry on the system.

Blockchains are supposed to make it possible to keep updated databases without any central authority in charge. But currently, all of the records for the Walmart blockchain are being stored on IBM’s cloud computers, for Walmart’s use. That has led to questions about why a distributed database like a blockchain is even necessary.

“The idea is right but the execution seems off,” said Simon Taylor, the co-founder of 11:FS, a consulting firm that advises companies on blockchain adoption. “IBM took new tech that doesn’t need a middleman and made themselves the middleman.”

McDermott said that the data would be encrypted in a way that will make it impossible for IBM to access or change it. Still, blockchain information tends to be limited. It can capture the digital record of a box of spinach. But cannot tell if someone opened the box and changed the spinach inside. “Blockchains won’t protect you from fraud,” said David Gerard, author of Attack of the 50 Foot Blockchain. “You need human inspectors who know the scams.”

Walmart says its blockchain will allow it to track food from the field, through washing and cutting facilities, to the warehouse and finally to the store. It will even be possible to pinpoint which part of the field and at what time the vegetables were harvested.

Frank Yiannas, vice president of food safety at Walmart, said the retailer is focusing on leafy green vegetables because, along with beef, they tend to have the highest incidences of contagion. “We can bring trust to the system,” he said.

Well, we will see. It is clear that challenges remain before the desired degree of safety is achieved in the U.S. food chain — but the level of detail promised by the new technology seems to promise better security and faster recovery when problems occur. This is a development producers should watch that could lead to better industry performance, Washington Insider believes.


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