Will Buyers Ante Up For PTI?

By Jim Prevor, Editor-in-Chief, Produce Business

There is little question that the Produce Traceability Initiative (PTI) lays out a path of significant progress for the produce industry. Not only does it present a model for traceability in food safety, but the realization of an industry-wide standard will create exceptional efficiencies for trade. This will help the industry provide consumers better product less expensively.

At the same time, it is easy to see why so many are objecting. Though the objections are ostensibly about the cost, that is not the whole story. Part of the problem is the nature of standard-setting. Standards provide many efficiencies, but only when they actually become standard. Until that time they are just another expense. This is especially true if one is ripping up an existing system that functions well enough and making an investment one didn’t plan to make.

In other words, the PTI is most appealing to those setting up greenfield operations, where a company was going to install some kind of traceability solution anyway and now it has an industry standard to implement.

Yet the dirty little secret of the produce industry is that the major players actually don’t mind spending a lot of money to gain access to key buyers. Requirements for things such as compliance with the PTI are expensive and technically challenging, and these obstacles, if required to sell to major buyers, constitute a barrier to entry. Most major players benefit when such barriers are erected as it reduces the competition.

Aye, but there’s the rub! These investments pay for themselves quickly if they are really the price to pay for access to the customer. The fear among many reputable producers is that, when push comes to shove, buyers will waive the requirements in order to access cheaper product. They won’t demand that local growers meet the standards or that foreign growers meet the standards, and if PTI-compliant producers are more pricey than other producers, the fear is that buyers will opt for the cheaper product.

Recently, as deadlines approach, some key buyers, expressing sympathy with the plight of producers, have offered extensions on the PTI as long as producers show sincere intent to conform to the initiative. These buyers may be sincerely trying to help but, if so, they are going about it all wrong.

If buyers want to encourage adoption of the PTI, they should give no extensions. What they should do is reward those companies that have invested to become PTI-complaint by giving them the business, if necessary paying a premium to the small number of producers that have made all of the required investments. All it will take is for the industry to see that those who invested in conforming to the Produce Traceability Initiative have preferential access to buyers at profitable prices and one will be astonished at how quickly major sectors of the industry become PTI-compliant.

Of course, this is only half the battle. Even if every member of every national trade association in North America conformed to every aspect of the PTI, it would leave dangerous holes in the industry traceability systems.

First, the PTI is a case-level initiative, but the product is sold on an item-basis to consumers. So for the consumer who gets sick with the product that caused the illness in the refrigerator and an uncertain memory of where and when it was purchased, PTI just isn’t much help.

Second, the scanning is all a production and distribution center matter. PTI doesn’t call for any efforts at store or restaurant level. Yet this is an important link in the chain.

Third, those representing the “soft underbelly” of the produce industry — small producers, wholesalers, repackers, chop shops, purveyors… those not members of PMA or other associations — are highly unlikely to invest in traceability systems of any type. Of course, a food safety outbreak among this sector will not be distinguished by FDA, by the media or by consumers from an outbreak in the mainstream of the industry.

Which brings us to one titillating difference we have with Bryan, who says we have to do this to hold off government regulation. As he puts it: “…if we don’t act, they will.”

Yet, we would say government action here is inevitable… and desirable. Traceability is a chain and, at the risk of being clichéd, a chain is only as strong as its weakest link. This industry initiative needs the legal authority of government behind it. This is the only way of ensuring that big buyers don’t compromise on standards to get a cheaper product and that the informal sector of the trade doesn’t put everyone else at risk.

The real industry challenge is to get the government to adopt the Produce Traceability Initiative as its standard in the search for traceability. Only this will avoid still another round of duplicative spending.