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sustainability and transparency of food supply chains – Current status and challenges


Advanced Engineering Informatics 25 (2011) 65–76

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Advanced Engineering Informatics
journal homepage: www.elsevier.com/locate/aei

Systems for sustainability and transparency of food supply chains – Current status and challenges
P.M. (Nel) Wognum a,*, Harry Bremmers a, Jacques H. Trienekens a, Jack G.A.J. van der Vorst b, Jacqueline M. Bloemhof b
a b

Wageningen University, Social Sciences Department, Management Studies Group, Hollandseweg 1, 6706 KN Wageningen, The Netherlands Wageningen University, Social Sciences Department, Operations Research and Logistics Group, Hollandseweg 1, 6706 KN Wageningen, The Netherlands

a r t i c l e

i n f o

a b s t r a c t
Food chains need to become more sustainable to regain and retain consumer trust after several food incidents and scandals that have taken place in the past. Consumers increasingly wish to be informed about the safety of their food, its origin, and the sustainability of the processes that have produced and delivered it. Sustainability comprises environmental issues (‘Planet’), social issues (‘People’), and expected returns (‘Pro?t’). With this paper we aim to explore the current status of information systems to support sustainability in food supply chains and communication towards essential stakeholders. In particular we identify current technical and organisational solutions and developments that aim to retrieve and provide information to consumers as well as decision makers concerning sustainability and transparency issues. Empirical research shows that information provision mainly regards the single isolated business actor. We explore the possibilities to extend the scope of information exchange towards sustainable supply chains. We explore the possibilities to upgrade present information systems to improve triple-P transparency by means of e-instruments. ? 2010 Elsevier Ltd. All rights reserved.

Article history: Received 15 March 2010 Received in revised form 1 June 2010 Accepted 7 June 2010 Available online 2 July 2010 Keywords: Food supply chain Sustainability Transparency Traceability e-Communication

1. Introduction Recent food crises have increased consumer awareness of the impact on public health of food production, processing, and distribution in Europe and beyond. Destruction of animals for example because of BSE has induced ethical concerns [22]. Crises like dioxin pollution, classical swine fever, and avian in?uenza, have fuelled consumer concerns about quality and safety of food production systems (see, e.g., [31]). Consumers have become more critical and wish to be informed about the origins and processes of food procurement, safety levels, production methods, hygiene, use of genetically modi?ed feed, application of pesticides, and other environmental issues like food miles and carbon footprints [36]. Nowadays, consumers include factors like quality, safety and environmental conformity in their buying decision, while much research is performed to determine if they are willing to pay more for sustainable products. Managers in the food industry and agribusiness will have to respond to these changing consumer demands by increasing sustainability of processes and products. Sustainability is de?ned as a situation in which the needs of the present generation are met, without impeding on the satisfaction of needs of future genera* Corresponding author. Tel.: +31 317485577. E-mail address: nel.wognum@wur.nl (P.M. (Nel) Wognum). 1474-0346/$ - see front matter ? 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.aei.2010.06.001

tions [10]. Sustainability information encompasses – among others – human health and safety (‘People’) and environmental impact (‘Planet’), within an economic context (‘Pro?t’). The economic effects (‘Pro?t’) of sustainable business management can be harvested by cost reductions and/or by means of increased revenues. To boost revenues, companies need to respond to public pressure by information processing and increased transparency for consumers to positively change the ?rms’ image [17]. Transparency of a supply chain is the degree of shared understanding of and access to product-related information as requested by a supply chain’s stakeholders without loss, noise, delay, or distortion [16]. This de?nition implies that data must be relevant, accurate, factual, reliable, timely, and available in an appropriate quantity. Moreover, quality information must be readable, while information exchange must be reasonable and properly arranged [16]. This de?nition poses strict requirements on systems that support communication towards consumers and stakeholders of a food supply chain. However, improving sustainability in the food production system usually leads to higher costs in the short term, while the revenues are uncertain. Creating added value by improved sustainability implies creating transparency, since consumers have to be convinced (and thus shown) that the often higher prices involved are justi?ed by the measures to improve sustainability. In the beef sector empirical research has shown that information

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provision indeed makes a difference in consumers’ willingness to pay (Napolitano et al., 2009). In the long term, integral costs may become lower, because emission costs may decrease and cost factors in the supply chain are better known. We will not assess completeness and consistency of systems for transparency as such. The goal of this paper is to explore the current status of (organisational and technical) information systems for transparency with respect to sustainability and identify challenges to improve transparency and sustainability of food supply chains. The outline of the paper is as follows. First, in Section 2, we brie?y discuss the need for sustainability and identify various stakeholders that need to be informed. In Section 3, we address the relationships between sustainability and transparency. We discuss two dimensions of transparency and relate them to the dimensions of sustainability. In Section 4 we address the environmental dimension. We show how improving transparency, with an emphasis on corporate reporting, plays a key role in bringing environmental sustainability to a higher level. We also describe approaches to compute the environmental impact of supply chains, namely through lifecycle assessment (LCA) tools. Next, in Section 5, we discuss transparency from the perspective of human health and food safety. We show how traceability can improve transparency and, in doing so, contribute to the social dimension of sustainability. In Section 6 we address the challenges for food companies to become more sustainable and transparent. Finally, in Section 7 we present conclusions and a discussion on instruments to be developed on the road towards sustainability and transparency.

2. The quest for sustainability Care for sustainability is inevitable in all industries if we want to maintain an environment in which our children and all children after them can live [9]. This environment encompasses all three aspects of sustainability: people, planet, and pro?t. A 1999 survey by Arthur D. Little has shown that 55% of senior executives regard product design as the most important mechanism for their companies to deal with sustainability. Similarly, scienti?c research under the headings of ‘Ecological Modernization’ (see e.g., [27]) and ‘Cradle to Cradle’ [23] regard product innovations as driving forces behind sustainable business performance (see also [9]). Future products need to be easy to recycle and built from durable nonhazardous materials. Also products need to be made under socially acceptable working circumstances, while workers share in pro?ts and participate in decision making. The same applies to food products. Agri-food and agri-business companies experience economic, environmental, and social pressure. For example, there is a danger of losing bio-diversity by modifying – for instance simplifying – genetic codes, which possibly leads to epidemic hazards. Agricultural land increasingly suffers from degradation. Water becomes scarcer also, which is a key element in food production [4]. In addition, the intensive use of anti-biotic medicine in pork and chicken supply chains endangers humans, because of increased resistance of bacteria to these drugs. Becoming sustainable is particularly a challenge for large companies and complex supply chains. Unilever Plc., for example, tries to transform its food production processes towards sustainability by applying the ‘triple bottom-line approach’ in sourcing its raw materials [4]: work towards social progress of people, environmental protection of the planet, and economic growth or pro?t in the supplying countries. As already indicated, consumers’ buying preferences in?uence management towards sustainability. However, not only consumers in?uence sustainable behaviour of companies. Other stakeholders are also impacting sustainable practices, like the government,

being a very important stakeholder in environmental matters, environmental organisations, which nowadays are involved in approving sustainable working practices, ?nancial institutions, as well as academic research and supply chain actors. Since many large food supply chains act globally, world-wide involvement, requirements, and consequences have to be taken into account. Robbins [34] concludes on the basis of the United Nations Benchmark Corporate Environmental Survey Report that transnational corporations (TNCs) react in different ways to global environmental challenges, which is re?ected in the way they report their behaviour to their stakeholders. The reactions range from mere compliance to environmental legislation and litigation via preventive towards pro-active management styles. The last-mentioned management style goes beyond environmental audits and accounting, by moving towards cradle-to-cradle analyses as well as environmental research and development and searching for green markets. The most pro-active style is called sustainable development management. It occurs in ‘ethical’ TNCs, which have a global vision and practice for dealing with environmental challenges. As introduced in Section 1, sustainability consists of three dimensions: the environmental dimension (Planet), the social dimension (People), and the economic dimension (Pro?t). In this paper we limit ourselves to the environmental and social dimensions of sustainability. The social dimension concerns impact of products and processes on people. In this article, we limit ourselves to the impact of food products and processes on human health, in particular consumer health. To support decision making and in?uence buying behaviour, stakeholders and consumers need to be informed about sustainability of the companies, products, and processes. In other words: food supply chains need to be transparent.

3. Transparency for sustainability Kalfagianni [21] has distinguished a horizontal and a vertical dimension of transparency in food supply chains. The horizontal dimension concerns requirements and legislation that apply to the respective companies in the various stages of the supply chain. This dimension regards the company strategy and operational processes within companies. The horizontal dimension also includes information provision of each company in a particular stage to relevant stakeholders and consumers concerning their policies and measures. Corporate reporting, increasingly required by legislation [42], is a way to convey information. Internet is a medium that is increasingly used for corporate reporting [19]. While many reports are still provided as text ?le, internet offers the necessary ?exibility to ?ne-tune content and presentation to various stakeholder groups (see also Section 4). The vertical dimension concerns requirements and legislation that apply to all companies in a speci?c supply chain. This dimension can also be called chain transparency. The requirements mainly address the input and output ?ows of the companies in a supply chain. How companies internally satisfy chain transparency requirements is often not speci?ed in the vertical dimension. Labelling of food products is compulsory in the EU. Labels are used to enable to trace the origin of products, but also offer assurance of intra-chain quality in transactions between supply chain actors. Examples are the IKB (Integrated Quality Control) and QS (Quality and Certainty) systems that apply to the largest part of food supply chains in The Netherlands and Germany, respectively (see also Section 4). Supply chains that wish to distinguish themselves from other supply chains, for example by means of a speci?c quality brand, often use labelling of the food they produce as an information instrument. Information about the particular distin-

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guishing characteristic of the product is added to the package information, with often a link to a website where additional information can be found on e.g., the safety, quality, environmental impact, composition, and economic value of the product. Examples of such information provision can be found in regional and specialproducts supply chains, like Ham of Bayonne (www.jambon-debayonne.fr), Eichenhof (www.eichenhof.net) and the Schw?bisch H?llisches Schwein (www.besh.de). Since labels are compulsory for each stage in the supply chain, they support the horizontal dimension of transparency. They also support the vertical information since all labels together provide information on all stages a product has passed. Information through quality labels also relates to the horizontal dimension of transparency, because in particular the farming stages (especially living conditions of animals and feed used are emphasised) are addressed, but it also supports the vertical dimension, because all supply chain actors need to be committed to the quality label. Lifecycle assessment (LCA) is a methodology to evaluate the environmental impact of all processes in a product’s lifecycle. In an LCA, the inputs and outputs of the processes in a supply chain, such as farming [30], production and transport, are systematically associated with a speci?c product (e.g., 1 kg of meat or 1 l of fresh milk). As LCA provides information to consumers and other relevant stakeholders on the environmental impact of a speci?c product, it adds to the horizontal dimension of transparency in the supply chain. Moreover, as LCA provides also environmental information on the processes that a product undergoes, it adds to the vertical dimension. Traceability is part of the vertical dimension. A good traceability system offers possibilities to follow a product and the processes it undergoes. This contributes to more transparency by making it possible to offer speci?c information to buyers and consumers. This again can play a major part in (re)gaining the trust of consumers in food safety and quality. Tracking and tracing systems are compulsory for food supply chains in the EU (General Food Law – 178/2002/EC) (see also Section 5). The two dimensions of transparency are related to the dimensions of sustainability as discussed in this paper. In Fig. 1 the relationships between transparency and sustainability are depicted. In the remainder of this paper we will identify where and to what extent the four transparency approaches, namely (1) environmental reporting (Sections 4.2 and 4.3), (2) LCA (Section 4.4), (3) labelling (Section 5), and (4) traceability systems (Section 5), are positioned in this ?gure. As already indicated in the previous section, in this paper we limit social sustainability to food safety and human health. Both dimensions, environmental and social, bene?t from creating transparency within the food supply chain and towards the end con-

sumer. In particular, technological and organisational instruments will be identi?ed which are used to support information exchange and communication. The pro?t perspective of sustainability is included in the discussion when relevant. However, this perspective is not explored in depth, because of space constraints. A cost-related form of LCA is the so-called Economic Input Output LCA in which both costs and environmental impacts are computed (see Section 4.4). 4. The environmental dimension of sustainability Environmental impact of food production has put pressure on food companies to improve the sustainability of business management. Improving sustainability requires cooperation between all actors in a food supply chain since ultimately the consumer at the end of the chain decides on the premium which is granted for all the efforts. Environmental impact can be regarded as a product quality dimension, just as technical product characteristics (like food safety), pricing, or social circumstances under which products are made and raw materials are provided. Not all quality dimensions are clearly visible to actors in the supply chain though. This is particularly true for the environmental dimension, since sustainable production circumstances cannot be revealed in the ?nal product without the provision of additional information (like traceability codes, quality labels on ?nal products, etc.). In the next subsection we elaborate on the tacit sustainability characteristics of food production and ways to create environmental transparency. 4.1. Environmental transparency and systems Technical (ISO) systems are available to monitor and control environmental impacts and technical product quality within the boundaries of the individual ?rm. However, impacts are caused by supply chains, rather than isolated business units. For instance, the consumption of beef involves different stages in the supply chain, which cause tacit environmental effects, like gas emissions by cattle, de-forestation to increase grazing ?elds, and soy production. Transparency of the negative effects of meat production and consumption, like the depletion of rain forest because of the production of soy (animal feed), is a prerequisite for spurring the ‘willingness to pay’ (WTP) of the consumer and, in doing so, creating incentives for ?rms to invest in alternative supply chain structures. Creating transparency, though, will be perceived by businesses as costly in the short run, since in many cases such effects will only occur in the long run. This is a barrier to the implementation of systems that make the environmental impact of products and processes along a supply chain visible to relevant stakeholders. Other barriers exist that obstruct the creation of transparency of environmental effects in food supply chains. First of all, there is a measurement problem. The positive ?nancial effects for pro-active companies are unclear. It is not obvious whether (and when) customers are willing to pay more for products from sustainable production chains than from ‘traditional’ chains. For food ?rms the question in this respect is not whether ‘‘pollution prevention pays”, but whether environmental projects will pay more than alternative business projects that compete for the same scarce resources. Investments to improve environmental care need to be balanced against other investments, while a solid quanti?cation of ?nancial effects is dif?cult. One reason for this is the connectedness of care systems like quality, social responsiveness and environment within the existing business structure. Second, if environmental impact is caused along the supply chain and measures are taken in one stage, it could easily be that costs and/or bene?ts of environmental pro-activeness fall in an earlier or later stage. Burning of package material and other waste

Sustainability

Environmental

Social

Horizontal

Vertical

Transparency
Dimensions-of Supports

Fig. 1. Relationships between (dimensions of) sustainability and transparency.

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to generate energy could be bene?cial for the energy plant, while other partners involved in the supply chain carry the collecting and transport costs. Vertical and horizontal redistribution of costs and bene?ts is necessary to engage supply chain actors in costly environmental care measures. This has been agreed upon in the energy covenant [26] of the Dutch Ministry for the Environment with industrial supply chains. However, the criteria for redistribution have necessarily been ?xed in an arbitrary way, since transparency of costs and bene?ts is lacking to a signi?cant extent. Third, social and technical rigidities can form a barrier in creating transparency to improve environmental pro-activeness. Companies in food supply chains are embedded in social and legal ties (leading to copying behaviour), and are often small in size. Both factors have a negative impact on innovativeness. In terms of Miles et al. [25], food companies are – in general – more defender than prospector, adjusting to observed technological innovations in the business environment. This outside-in in?uence (stimuli come from outside the company) mainly stimulates information gathering activities. In contrast, a key component of an inside-out strategic orientation (stimuli exist within the organisation) is the provision of information needed for increasing transparency of environmental behaviour. Food companies have excelled in creating rigid administrative control systems, which obstruct reaching higher levels of environmentally sustainable business management. A prominent way to improve systems control is the inclusion of certi?ed environmental management systems (EMSs) in the organisation, based on the ISOseries, BS7750 (British Standard) or EMAS (EU Eco Management Audit Scheme). Embedding systems like ISO14000 series improve the compliance of the ?rm with public environmental policy pressures [2,8,13,43]. However, putting such systems central could also act as a barrier for beyond-compliance performance (compare e.g., [33].

delinquency, like the absence of an environmental report for the public, violation of the rules, or provision of wrong or misleading information in the governmental report, private law does not penalise misinformation to the public unless identi?able damages have been caused and proven. As a consequence, the environmental report for the public can be used as a marketing instrument, rather than as an instrument for justi?cation and information. 4.3. The current status of environmental transparency in The Netherlands In 2001, data were gathered among 492 ?rms in the Dutch food and drink (F&D) industry about preferable ways to improve transparency by means of information provision. The sample proved to be highly representative for the Dutch F&D industry. The following policy alternatives have been evaluated [6]: 1. Providing environmental permits to a supply chain as a whole, instead of the present practice of permits for the single business entity. 2. Integrating environmental reports to identify all effects on a supply chain level, instead of reporting for the single business entity. 3. Integrating environmental reporting to governmental agencies with other compulsory reports in scope (supply chain) and content (social, environmental and ?nancial). Of companies with sales in 2001 of 25 million or more (N = 105), 29.5% perceived alternative 1 as an improvement (feasibility: 25.7% of the companies). Alternative 2 scored 47.6% (feasibility: 27.9%) and alternative 3 49.5% (feasibility: 48.5%). Given the positive effects on administrative burdens, it is not surprising that especially an integration of information processing was evaluated positively by private stakeholders. Environmental management systems (EMSs) can be distinguished in in-company systems (I-EMSs) and externally oriented systems (E-EMSs). In the 2001 study mentioned above, both types of systems and their components could be identi?ed. The results show that E-EMS elements (such as a tracking and tracing systems for environmental impact, environmental data collection and exchange in the supply chain) have only been developed to a low level, while I-EMS elements have been deployed to a larger extent. The results also indicate that government has an important role to play in redirecting the environmental policy of companies, next to inhabitants and clients. Consequently, to create transparency of environmental measures in a supply chain governmental in?uence is needed, next to pressures from other stakeholder groups. At present, the Dutch environmental policy is mainly directed at inhouse, operational requirements, rather than being externally oriented. For integrating environmental information, e-tools can be used to exchange data fast and ef?ciently (i.e., with low administrative burdens). In 2004, an electronic environmental reporting structure was introduced in The Netherlands. Haverkamp et al. [14] have performed an evaluation of e-environmental reporting before (ex ante) and after (ex post) the introduction of the system. In total 40 companies which volunteered in the evaluation of the system have been interviewed. The results are included in Fig. 2. Fig. 2 shows positive effects of the ?rst experiences with the system of electronic reporting, although the level of expectations and experiences is still rather low. Learning effects in the course of time have made the electronic system widely accepted and commonly used. According to Isenmann [19], environmental reporting has evolved rapidly towards sustainability reporting. From a survey research in 2000, involving 121 environmental reports, it is concluded that in early stages efforts focused on single, free-stand-

4.2. Improving sustainability with environmental reporting Several instruments for measuring and monitoring exist to provide information (inside-out perspective) to stakeholders in the business network, like GRI 2000 [12] and ISO 14031 [18], each with systematic sector-wide metrics. Currently, not many companies fully follow such guidelines [29]. In The Netherlands, every year around 800 companies provide environmental reports on a mandatory or voluntary basis, while in many cases references are made to the Global Reporting Initiative1, founded by CERES in 1997 [5]. Environmental reporting guidelines have adopted generally accepted accounting principles, such as relevance, reliability, comparability and veri?ability, and absorb basic concepts from ?nancial reporting, like the entity-concept, accrual accounting, continuity, prudence, and materiality. Guidelines for environmental reporting have also been developed by the International Chamber of Commerce and the Business Council for Sustainable Development. In addition, business – in cooperation with accountancy, employers’ and employees’ organisations – has developed score cards and checklists for gathering information on environmental impact and management. Guidelines on environmental reporting can be found in the legal prescriptions of individual countries, which can diverge considerably. For instance, in The Netherlands the environmental report for private stakeholders is different from the report which is meant for public agencies, while in other countries an integrated reporting system is applied. It is not mandatory that the Dutch environmental reports are veri?ed by an external certi?ed accountant, while in some other European countries it is. Although shortcomings in exposure of information may be considered as an economic
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http://www.ceres.org/reporting/globalreporting.html.

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Fig. 2. Expectations and experiences with electronic environmental reporting, expressed on a 5-point scale (1 = disagree, 5 = fully agree) (Gas = Governmental agencies).

Fig. 3. Breath and focus of EM system deployment. The arrow indicates a growth path.

ing environmental reports, using printed media and targeting all stakeholder groups at once. Increasingly, these reports are published on the company website. However, companies are not using the full potential of e-reporting yet [19]. To limit environmental impact of food supply chains, not only individual supply chain actors need to foster company environmental management, but also concerted action is needed on a supply chain level. Companies need to change their strategy, organisation and systems to stimulate environmental sustainability within and across their boundaries. There is a potential for added value in increased environmental attention. Pressures from the stakeholder environment play a prominent role in the greening of management systems. Fig. 3 highlights the pathway towards improved environmental sustainability. The examples in Fig. 3 show, that a focus on operational systems is just a ?rst step to improve environmental management performance. While many companies take in-company measures on an operational level, globally operating MNCs (Multi-National Corporations) need to develop a strategic approach, align their environmental strategy with the overall corporate strategy, and involve the business supply chain and network to improve sustainable business management. 4.4. Lifecycle assessment in the supply chain A food product passes through several stages during its life: from design, sourcing and farming, through harvesting and/or processing, sales and use, and ?nally disposal or recycling. For each

stage opportunities to reduce the environmental impact can be identi?ed and measures can be taken. For each product, an environmental product declaration (EDP) can be made. This is a standardised methodology to inform users about the environmental performance of products or systems, based on ISO 14025/TR. The goal of this – trade-mark protected – system is to provide veri?ed, usable, and relevant information on the environmental aspects of products, so that these can be compared on environmental performance (www.environdec.com). Lifecycle assessment (LCA) results can be included in an EDP. The Life Cycle Assessment (LCA) approach is widely accepted in the area of food supply chains as a method to evaluate the environmental impact of processes like extracting raw materials, farming, slaughtering, and processing to produce a food product (see for example [3,35]. LCA is a method to assess the environmental impact of products by investigating the entire lifecycle of a product from cradle to grave or beyond with all different material ?ows that are relevant for that product. For an extensive description of the use of LCA for food chains see Mogensen et al. [28]. The method is de?ned in the ISO standards 14040 and 14044 [20]. LCA can be used for at least four purposes. First, LCA can be used to improve the overall lifecycle balance of environmental burdens of a product by identifying the resource- or emission-intensive processes within a product’s lifecycle. Secondly, scenario analysis using LCA will show the effect of changes in these processes for the total environmental burden, instead of taking measures that simply shift environmental problems from one phase of the lifecycle to another. Therefore, LCA will create more transparency with respect to environmental effects in food supply chains (see also below). Thirdly, LCAs of products can be used to compare with benchmarks in the industry. Under the same assumptions, system boundary and functional unit conditions, alternative products or processes can be compared, considering multiple parameters such as carbon footprint, land use, acidi?cation and toxicity. Finally, performing an LCA can be necessary to get a product registration such as the Eco Label from the EU or a Green-to-Gold-label from the US. The European Eco-Label products have to ful?l a number of requirements regarding total energy use (Cumulative Energy Demand), noise, use of hazardous materials, emission levels, etc. To guarantee the ful?lments, an LCA is necessary. The European Union moves away from treating emissions (air, soil and water) by ?lters etc., towards the so-called IPP approach (Integrated Product Policy), in which a holistic approach of environmental performance is obliged. Barriers for transparency through LCA in the supply chain are (1) the lack of reliable and open source data, (2) the issue of how to allocate environmental burden, as in food supply chains the major products are usually accompanied by the joint production of by-products, and (3) the de?nition of the scope of the supply chain, especially the start of the chain, as each supplier has at least one supplier also. Environmental burden can be measured by different indicators. Most commonly used, and available in all commercial LCA software packages (like Simapro (www.pre.nl), GaBi (www.gabi-software.com) and Umberto (www.umberto.de)), are the ecoindicator CED (Cumulative Energy Demand over all processes in the lifecycle) and supply chain carbon footprint. The last indicator measures the total amount of GHG (Green House Gasses) emissions associated with a product, along its supply chain and more and more including emissions from consumption and end-of-life recovery and disposal. It is expressed in kilograms of carbon dioxide equivalents. Legislative measures, like the EU Emission Trading Scheme and Carbon-Tax, make the use of LCA to decrease carbon footprints also economically attractive. Although LCA is basically focussing on the environmental impact of products, the EIOLCA (Economic Input Output LCA), developed by Carnegie Mellon (www.eiolca.net) gives the user the

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possibility to compare economic costs of the processes with environmental impacts of those processes. LCA clearly relates to the vertical dimension of transparency, since environmental impact of all supply chain processes in principle is taken into account. The horizontal dimension is also supported since environmental impact of each stage of a supply chain is also assessed. 5. The social dimension of sustainability In this paragraph we discuss transparency from the social perspective, focusing on tracking and tracing systems to improve human health through improved food safety. Food systems have become increasingly complex. First of all, consumers not only wish their food to be safe, produced with minimal damage to the environment, while it is still affordable, but also desire a wide choice of fresh and processed food. Secondly, food systems have become increasingly international, involving more small and large companies with long transport and supply times and lines to acquire feedstuffs, life cattle, or intermediate and ?nished food products. Measures to safeguard consumers against any food hazards, hence, need to be embedded in an international institutional context. 5.1. Transparency requirements for traceability Guidelines and/or regulations for identi?cation and tracing of livestock have been provided by multinational and supranational organisations [24]. These organisations are the World Trade Organisation (WTO), the World Organisation for Animal Health (OIE), the Codex Alimentarius Commission for Food Safety, the Food and Agriculture Of?ce (FAO) of the United Nations, and the European Union. Most of these organisations provide guidelines and advice, and emphasise at the same time that the ultimate responsibility for animal identi?cation and tracing in any country should rest with the government. National authorities, like FDA (Food and Drug Administration) in the USA, provide additional guidelines and regulations. In January 2002, the EU accepted the General Food Law (GFL – 178/2002/EC), applicable from January 1st 2005, while two years later traceability of packaging material was added. The basic article is art. 14: it is not allowed to bring unsafe food to the market. It imposes demands for transparency, in particular through traceability, to all actors in a food supply chain with the aim to safeguard consumers against food hazards. Article 18 of the GFL requires that food and feed chain actors should be able to identify incoming and outgoing material ?ows. To this end, systems and procedures are needed to be able to store and retrieve information. To facilitate traceability, all food and feed must be adequately labelled (e.g., with paper documents, barcodes, or electronically readable devices). Such labels also serve to inform customers and consumers about the origin of the food and feed. Traceability needs to be ensured in all stages of the food production chain in the EU (see text below). GFL requirements The EU General Food Law (GFL) Regulation contains clear requirements for traceability, stating in Article 18 [11]: – The traceability of food, feed, food-producing animals, and any other substance intended to be, or expected to be, incorporated into a food or feed shall be established at all stages of production, processing and distribution. – Food and feed business operators shall be able to identify any person from whom they have been supplied with a food, a feed, a foodproducing animal, or any substance intended to be, or expected to be, incorporated into a food or feed. To this end, such operators

shall have in place systems and procedures, which allow for this information to be made available to the competent authorities on demand. – Food and feed business operators shall have in place systems and procedures to identify the other businesses to which their products have been supplied. This information shall be made available to the competent authorities on demand. – Food or feed which is placed on the market or is likely to be placed on the market in the community shall be adequately labelled or identi?ed to facilitate its traceability, through relevant documentation or information in accordance with the relevant requirements of more speci?c provisions. – Provisions for the purpose of applying the requirements of this Article in respect of speci?c sectors may be adopted in accordance with the procedures laid down in Article 58(2). This general traceability requirement is non-prescriptive but encompasses all food and feed business operators including primary producers. Retailers of goods to the ?nal consumer are exempted from the requirements of forward traceability. In addition to the requirements from the GFL, national governments can impose legislation for safety and quality of food products. Moreover, private bodies add their own demands, like farmer, sector and retail organisations (as is the case with the Quality Management System Global Gap). Quality management systems (QMSs) enable the application and veri?cation of measures to assure the quality and safety of food throughout the supply chain. Several QMSs may apply to one production chain. While the focus of many QMSs is on processes to guarantee safe and healthy food, animal welfare receives attention also, as well as traceability through, e.g., ear labels, animal passports and ICT systems (see, e.g., [38]. Quality management systems, like the ISO-9000 series, which many manufacturing organisations have adopted, require that a product is traceable from the current stage back through all previous stages by means of accurate and timely record keeping. Nowadays, the requirement of paper documents has been relaxed by allowing computer records to be used as evidence [37]. The Food Standards Agency [11] has formulated traceability requirements for different stakeholders, like industry, government and consumers. Industry has to install procedures for compliance to legislation, diagnose problems, and avoid the use of hazardous substances. The government has to install proper monitoring and control mechanisms to protect public health while consumers have to be enabled (e.g., through labelling) to make proper choices in buying food, taking into account allergy, food intolerance, or lifestyle. van der Vorst [39] identi?es three chain traceability strategies for food companies: compliance (complying with governmental rules), process improvement (improving performance by benchmarking), and branding (creating added value in the market). Process improvement is possible due to the gathering and analysis of many process data, resulting in improved ways of working. Brands are made visible to consumers by means of additional information on labels and through websites on which consumers can ?nd additional information. Such information provision may increase consumer willingness to pay. In practice barriers to traceability exist, making full traceability in food supply chains very dif?cult and costly to achieve. Current status, barriers and existing systems are discussed in consecutive sections. 5.2. The current status of transparency through traceability In this section we discuss results of a 2002 survey into international performance of ICT traceability systems. The survey, an

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international benchmark study [40] was performed by the Dutch Ministry of Agriculture, Nature Management, and Fisheries, and the Ministry of Economic Affairs. The research aimed at gaining insight into international practices in food supply chains with regard to the use of ICT systems to support traceability of food products. The study has been carried out in The Netherlands, Germany, Spain, Sweden, the United Kingdom, Australia, and the United States of America. Each studied supply chain consisted of all actors from feed supplier through primary producer, processing industry, and retail, to consumer. The studied supply chains produce meat products, dairy products, fruit and vegetables, and grain/bread products. A typical food supply chain is depicted in Fig. 4. In addition, a food supply chain is also a network, since actors in a supply chain often have several, sometimes many, suppliers and customers. The research has proceeded in two steps. First, an electronic survey questionnaire was composed to gather data on the use of ICT for traceability systems to guarantee food safety. It was sent to best-practice organisations in the supply chain of each country. The questionnaire has consisted of the following elements: restrictions put on the supply chain by government and legislation, company and supply chain strategy with respect to traceability, organisation of the supply chain with respect to the degree of coordination, and the use of ICT in the supply chain, like bar codes, presence of scanning devices, planning modules, etc. In addition, traceability performance was measured using the number of links in the supply chain, the tracing unit (farmer, batch delivery or individual animal), time needed for tracing products and reliability of the tracing. Finally, the survey results were triangulated and enriched by interviews and desk research. Traceability initiatives on the internet have been gathered as well as initiatives from software suppliers, food companies, sector organisations, governmental institutes, and many others. Results of the benchmark study show that performance levels differ between supply chains. However, between countries the differences are not very large. The following conclusions have been drawn [37,39]):  In most cases companies focus on their own business instead of on the complete supply chain. Most companies have arranged some kind of traceability across company borders. However, because companies have multiple alternative suppliers, they are often unaware of the potential traceability. There is hardly any strategic information exchange with suppliers.  There are a number of best practices that provide almost full traceability in the supply chain. Most of them represent completely integrated or highly coordinated supply chains that comprise feed suppliers, farmers, processing ?rms and retailers, which have agreed on the use of speci?c standards and systems. Most of these best-practice chains achieve a higher level of quality than is required by the present legal food safety requirements. They try to distinguish themselves from competition (see also Trienekens et al. [36], for other examples of integrated and high-quality chains in the pork sector). Information systems and internet technologies play a key role in such supply chains [7].  Legislation is an important motive for companies to comply with traceability demands. European standards are the strictest of the world in this respect. As already was argued, the GFL

requires registration of the origin and destination of all animal feed, raw materials, and products in all stages of production and distribution on a transaction basis. Companies often go beyond to what is required to comply by means of additional or stricter standards. Often these stricter standards are required by the large retailers, like Tesco. Tesco demands the same high standards from its local as well as from its global suppliers.  Most companies focus on the prevention of product recalls instead of traceability. Today’s legislation provides no clear rules for the required performance of traceability systems. Moreover, current QMSs (like ISO), focus at in-company traceability but not full supply-chain traceability. Therefore, companies perform supplier audits and install monitoring programmes. When risk of incidents is higher, consumer trust is at stake. Positively stated: when competitive advantage can be created, demand for traceability is usually higher.  Only few ICT applications have been designed speci?cally for traceability. In most cases, traceability is established via connecting existing registration systems like integrated enterprise information systems, such as ERP (Enterprise Resource Planning) systems. The research shows that there are only minor differences between ICT applications in different countries. It exempli?es that the ICT market is a global one (e.g., bar codes, RFID (Radio Frequency Identi?cation), XML).  Companies cannot always bene?t fully from traceability systems, because traceability results are sometimes not very precise. When incidents occur, retailers often remove all articles from the shelves and not just the articles from the speci?c lot concerned. One of the main reasons is that retailers have discovered that in time the number of products related to the incident increases autonomously and consumer con?dence in the product decreases. In addition, incidents often lead to general import restrictions without taking into account existing traceability systems. The results of the benchmark study have shown that The Netherlands and the UK are trendsetters, while the USA is lagging behind (see also [7]. The meat sector is ahead of other food supply chains because of the recent incidents that have taken place. In addition, meat and meat parts are easier to follow than dairy, for example. Dairy supply chains are more complex because of the mixing and rework. In the remainder of the paper, our focus is primarily on meat supply chains, because much is happening in these chains currently. The results show that costs of traceability are unclear, as is its added value. Consumers appear not to be willing to pay more for better traceability. Full traceability can only be achieved by means of suitable infrastructures, which are costly to install, and standards across all stages of the supply chain, which are dif?cult to achieve in large commodity supply chains with market relationships. 5.3. Complexity-increasing factors for traceability in networks of food supply chains Barriers to traceability exist which are different across supply chains in different sectors and markets. Supply chains have different characteristics on the basis of the level of predictability of supply of produce, quality variation, and the perishable nature of fresh

Supply of (raw) material

Farming, growing

Processing

Distribution, sales

Consumption, use

Disposal

Fig. 4. A typical food supply chain process.

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produce. Such characteristics in?uence the implementation of traceability systems. A summary of the factors with a signi?cant effect on complexity are listed below [37]:  Diverging and converging product streams make it dif?cult to follow the different raw materials that go into the product and the resulting end products (see the pizza example below).  Variability exists in quantity and quality of raw materials and intermediate products, due to, for example, weather conditions, biological variation and seasonality, but also as a result of variations in production processes. A typical characteristic of food products is their variability in form, shape, taste, etc.  Contamination occurs because of (many) different batches of raw materials. Because batches in food industries can be mixed, cross-contamination of batches is a general problem in the food industry.  Identi?cation differs between batch and continuous production. If production takes place in batches, identi?cation can be organised per batch. However, in the case of continuous production (like is the case with fresh milk), identi?cation can only be retained by time of production.  The number of sources of batches of raw materials (home and abroad) increases. Because of the internationalisation of food supply chains and networks, sourcing becomes more and more international.  The number of actors with formal and informal relationships in the supply chain may be large. In the food supply chain transactions often take place at arm’s length. Sound transaction administration is lacking in many cases.  Connections between physical and administrative product ?ows are often lacking. In general food supply chains and chain processes are complex. Consequently, implementing traceability and transparency is complex also.  Food products may be based on variable or multi-level recipes. Products can be based on more than one recipe. For example, different raw materials and use of different production assets can lead to similar products.  Rework is needed in liquid products processing, like dairy and beer, because leftovers in one batch are used again in the next batch to reduce (waste) costs on the one hand and to homogenise product quality on the other. This practice, however, increases the possibility of large recall batches due to spill-over effects.  Food products often contain active material. Active material (for example protein) is contained in other material components of the product and determines the value of the end product. The concentration, amount or percentage can vary. Registration of the total product quantity is therefore, not suf?cient, but rather the active component should be identi?ed separately.  Food products are perishable. For certain materials storage life constraints apply. As a consequence, using material according to ‘?rst in ?rst out’ (FIFO) may not apply and different batches of the same product, but of different age, cannot be grouped and must be handled and registered separately. Legislation and QM systems for traceability do not yet focus on the entire supply chain. They are mainly related to incoming and outgoing material ?ows. Traceability within the company is left to the responsibility of each single stage, which leads to different approaches and standards. In addition, full traceability is dif?cult to achieve, especially for complex meat supply chains and for products that need additional processing. A living animal is individually traceable to the farm where it was born and raised, as well as to its parents. Information on feed consumed and medicines applied can also be traced to the individual animal, especially when an electronically readable ear label (using RFID) is used connected to a

central information system. The link is broken, though, at the slaughter stage. In this stage an animal is cut in many different pieces, in contrast to the car manufacturing industry where a car is assembled from many pieces into one product. In most cases, after cutting, pieces of meat can be traced back to a batch of animals slaughtered on a particular day and coming from a particular farm. For products like sausages, pizzas and other composed products, traceability becomes extremely dif?cult, as is illustrated in the example below. Example pizzas Production and sales of pizzas take place all over Europe. Pizzas combine the end products of several vegetable and meat food supply chains. For example, ?our is sourced from corn supply chain, tomatoes from the fruit and vegetable supply chain, cheese from the dairy supply chain, sausages from the meat supply chain, possibly elsewhere in Europe, while also various herbs and spices are sources from many different suppliers and places around the world. It is hard to assess the origin of the different ingredients or the quality of the end product. Production takes place in a commodity-like setting under brand names, private label as well as in small-scale and locally-oriented shops and restaurants. Non-food chains, like packaging, also in?uence the quality of the product. In producing and selling pizzas transparency-related factors play a role like level of adoption and acceptance of standards as well as differences between countries in implementing EU-level guidelines.

5.4. Examples of systems for traceability and quality management In general, visible identi?cation instruments are applied for animal identi?cation, like numbered ear-tags, barcodes and/or tattoos. In the EU and also elsewhere [24], a computerised central database has been installed to record information which can be used to diagnose a local situation [1]. Data that need to be available should comprise farm location, farm type and practices, animal owners, animal stocks, movements, means of transport, documentation, legal framework (authorities involved and obligations), and establishments where animals are sold. However, analysis of a local situation in case of incidents still takes a lot of time, because organisational problems exist in keeping the database consistent and up-to-date. For a large part data entry is done manually, because documentation accompanying shipments, feed records, or medicine administration is dominantly hardcopy based. To improve database consistency and reduce administrative loads, the use of electronically readable devices, like RFID ear-tags, is increasingly promoted, for example by the FAO [24]. RFID improves traceability until the slaughterhouse stage. In the cattle sector, such tagging is already happening like in Australia and Canada. For sheep and goat RFID tagging is currently becoming compulsory, to record movements of herds. For pigs, RFID is not widely applied yet because of the costs incurred. Only for sow management on the farm RFID has proven to be useful. Pregnancy monitoring and feed control are enabled by connecting the tags to a sow management information system. The tags can be re-used, because the purpose of identi?cation is recognition of individual sows at the farm only. Pigs raised for meat require distinct identi?cation through a unique number. Such uniqueness requires either programmable RFIDs, which are more expensive, or disposable RFIDs, which need to be very cheap, because of the large numbers needed. Full traceability can be achieved with considerable additional efforts and against high costs. In Japan, for example, full traceability is required for cattle to safeguard quality and consumer trust (MAF, 2006). DNA samples are taken of each carcass and stored to allow full trace-back if needed. For larger sectors, like the intensive pork meat industry, DNA sampling is not cost effective yet.

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While traceability mainly aims at ?nding the origin of problems, the computerised information content incorporated in any traceability system is in many cases extended with data from systems for health, logistics, or quality management. In this way, improvements can be tuned to speci?c farms, herds, animal species, feed regimes, etc. In addition, results of data analysis are interesting for branch organisations and governments, with potential impact on guidelines and regulations. Current interesting examples of systems that contribute to traceability and QM are FarmingNet and Sanibase (see examples below). These systems typically apply to a limited segment of the supply chain. Sanibase, brie?y presented in the example below, is an initially veterinary support system aimed at recording the health situation on farms to allow veterinarians to check animal health before signing a prescription for medicated feed or other medication. The system appears to have functionality beyond veterinarian use (http://www.sanders.fr/porc/porc-informatiquesanibase.htm). Example Sanibase Sanibase is an inter-enterprise information system, set up to support health management in the pork supply chain. Sanibase contains data from several sources: – – – – – – – – – Visit protocols of veterinarians Visit reports of feed advisors History of prescriptions for medicines and medicated feed Slaughter data, like weight, quantity, meat percentage, sex, organ ?ndings Semi-annual balance of slaughter data Salmonella and Aujeszky checks Laboratory information from living pigs (e.g., blood samples) and slaughtered pigs Technical data (daily growth, feed conversion) provided by farmers cooperatives (groupements) Farm data, provided by groupements. Farm identi?cation is the VAT number.

While the system has originally been developed to support veterinarians in checking a farm situation before they sign a prescription for medicated feed or other medication, it appears to have larger potential in the supply chain for improving product and process quality and provide transparency to a wide group of actors. It also can be used to support quality management and risk-based meat inspection in the (near) future. Farmingnet (www.farmingnet.nl) is a system developed for VION Food Group to provide feedback to farmers on carcass quality of the pigs they delivered to VION. Besides justifying price deductions for any lesions detected in the carcass or meat, the system supports benchmarking and quality management on farm level as well as in the slaughterhouse. Example FarmingNet FarmingNet was launched in 2005 by VION. It is a web-based information system providing farmers with on-line access to data about the pigs they have supplied. Analysis of the data is performed by the VION slaughterhouse, which shows farmers the quality level and degree of uniformity of their pigs in?uencing their net pro?t. Cost savings are the result of lower failure costs. In other countries and chains intercompany information systems for the pork chain have been developed, in particular in the Western part of Europe, including France and Spain. Although most of these systems focus on the relation slaughterhouse – farmer, we see also chain-wide information systems emerging, including in the breeding and feed supply chain stages. These systems not only focus on better planning and control of operational processes in the pork chain, but also on mid- and long-term optimisation of various production and distribution processes. A recent study [15] into the economic value of using these kinds of systems found two advantages

for the slaughterhouse-farmer link: (1) An overview of body and carcass deviations per batch, and thus per stable, possibly provides better insight into climate control per stable. This information could lead to additional returns (increased pig growth and reduced throughput and cycle times), reduced costs (decreased number of deviations), and increased resource usage. (2) Using such a system could also contribute to improved accuracy of weight partitioning of pigs at delivery time related to pig pay-off. This information could result in additional returns (reduced throughput and cycle times), reduced costs (increased optimisation of weight at delivery) and increased harmonisation of market quality concepts. Traceability supports mainly social sustainability, especially food safety for human health. However, it also contributes to animal health and safety, especially in supply chains that aim at producing high-quality meat, because problems with food safety and quality can be traced back to particular farms and local situations. Transparency of the way animals are treated on the farm or during transport provides an incentive for improvement, because of potential reputation damage. Environmental sustainability can be connected to tracking and tracing systems when lifecycle assessment systems are in place (LCA), for example to measure the carbon footprint of the total production process. At present, though, environmental sustainability is still dif?cult to provide via food safety traceability systems. Traceability systems in principle belong to the vertical dimension of transparency. This dimension still requires further improvement, since currently the respective supply chain stages realise their own traceability solutions. Only in fairly small or highly integrated supply chains, chain-wide traceability is achieved. Technology like DNA sampling and testing combined with RFID ear labels is increasingly used for chain-wide traceability. As can be concluded from the elaborations above, barriers to achieve chain-wide traceability are not merely technological, but also organisational. In many food supply chains, especially in commodity chains, a large number of actors are involved, while material and information ?ows often cross several organisational and country borders. Harmonising information standards and implementation of inter-operable technology is dif?cult in such situations, especially without strong legislative enforcement. Moreover, consumer concerns also play a role, like was evident with attempts to use RFID boluses injected in the animal body. Consumers did not want running the risk of ?nding a bolus in their meat as was observed in the EU project IDEA (Identi?cation électronique des animaux – http://idea.jrc.it/HOME.HTM).

6. Common problems, common challenges Comparing environmental and social sustainability issues from the perspective of horizontal and vertical transparency, similar problems can be discerned. The problems call for integrated solutions to limit costs and maximise bene?ts. The ?rst common problem concerns the dimensions of transparency. Environmental information provision mainly focuses on the single business unit: the scope is limited to in-house environmental management and accounting. Environmental reporting can be characterised, hence, as mainly horizontal transparency, limited to individual actors. Vertical transparency is possible when the effort is taken to compare all environmental reports of actors in a food supply chain. Concerted environmental reporting does not yet happen. LCA can also be characterised as mainly horizontal, but allows for vertical transparency because LCA can be applied to several stages of a food supply chain including transport. The challenge is to gather the necessary data for performing the different analyses.

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Table 1 Current status of transparency approaches for sustainability. Approach Environmental reporting LCA Traceability Labelling Horizontal transparency Yes Yes Indirectly Yes Vertical transparency Indirectly Yes, but limited Yes, but still needs improvement Limited Environmental dimension of sustainability Yes Yes Limited Yes for quality labels Social dimension of sustainability Indirectly Indirectly Yes Yes

Traceability has clearly a vertical scope. However, traceability is achieved separately by the different actors in a food supply chain. Moreover, input and output traceability are compulsory, while actors are still fairly free in how they realise internal (horizontal) traceability. As such, chain-wide traceability is possible, but requires much effort and time. Only in integrated or less complex supply chains (small number of actors, short distances) examples are found of full traceability. Although not discussed in much depth, labelling is a device for information provision to consumers and intra-chain actors. Labels for traceability serve the vertical transparency dimension by indicating the source of the food and feed. Labels for consumers serve a different purpose. They are used to inform consumers of the value, quality, and environmental friendliness of production of the food they buy. Although this information concerns the whole supply chain in principle, most attention is paid to how food has been raised on the farm in terms of, e.g., animal welfare, environmental impact, and the special species used. Labelling for consumers has not been discussed in depth in this paper, because it touches upon extensive research in the area of consumer behaviour and marketing, which cannot be addressed because of space limitations. With respect to sustainability, the four transparency approaches, presented in this paper (see also Section 3), play different roles. Environmental reporting clearly supports the environmental dimension of sustainability, as does LCA. Traceability, on the other hand, serves mainly the social dimension of sustainability. Labelling is used to support both dimensions. In Table 1, an overview is given of the different support given to transparency and sustainability by the respective approaches. A ?rst common challenge for the transparency approaches discussed is to organise an integrated or shared supply chain approach consisting of common strategy development, integrated management systems, and integrated information systems. A second common problem is the dominant focus on legal requirements. Environmental as well as social sustainability are heavily in?uenced by legal rules. Legal interference is a major source of transaction costs: it is in itself a source for compliance costs. The challenge is to reduce costs and increase the bene?ts of information provision. Integration of information databases could reduce costs as well as make information available to a wide range of stakeholders. A third common problem is the tacit character of producing in a sustainable way. As social and environmental dimensions of food are not directly observable by the individual consumer, food products have the character of credence goods. This implicates that the compensation of sustainability efforts in pricing is problematic. It calls for the instalment of devices (e.g., quality labels and websites) to inform customers and consumers of the real business processes, incentive schemes to motivate supply chain partners to work together, and to convince customers and consumers of the superiority of sustainable production in comparison with ‘traditional’ production chains. The fourth problem is the lack of size in the food industry. The food supply chains, especially upstream, mainly consist of small and medium-sized enterprises, causing diseconomies of scale. The costs of sustainable production in supply chains can only be recovered by means of up-scaling present production.

However, increasing the scale of production may lead to a change or even loss of company identity, while innovative power may be at stake. Companies are required to adhere to generic quality requirements, while traditional (smaller-scale) production often does not ?t into schemes like HACCP, ISO, or Global Gap. With respect to animal health and safety and the environment only small food supply chains, integrated or with a small number of actors, address these issues currently. For example, organic food supply chains use environmental and animal welfare information to market their food products to consumers. Again, in large food chains this is not yet common, although many chain actors favour attention to animal health and environmental impact [21]. Incentives to install traceability for animal health and protecting the environment are still lacking and division of responsibilities between chain actors, government and other stakeholders are not yet clear. Administrative costs of traceability are very high. Moreover, large investments are needed. Since the EU and other worldwide organisations do not yet require electronically readable devices for all meat sectors, a lot of paper work is needed, and extensive manual data entry. Electronic devices are not used on a large scale yet. RFID ear tags are still fairly expensive and mostly used for sow management only in the pork meat sector. Efforts are going on to develop low-cost and robust electronic devices. There is also a lack of standardisation which hampers smooth exchange of information throughout the supply chain. In addition, food supply chain actors have different characteristics. This makes standardisation very dif?cult. Last but not least, farmers and growers spend a lot of money in processing technologies, but often lack the money for investments in their management systems. As a consequence effective exchange of information with chain partners remains dif?cult. 7. Conclusions and some solutions In this paper we have discussed transparency with the aim to show current efforts towards transparent and sustainable food supply chains. Each subject discussed in previous sections requires a full paper to characterise and describe its status and progress. We have tried to sketch a picture of the richness, complexity, and challenges of transparency and sustainability systems, as well as their inter-dependencies. We have also identi?ed barriers to sustainability which provide challenges for improvement. In this paragraph, we will discuss solutions for the problems and challenges which have been described in Section 6. These solutions consist of both organisational and technical approaches to improve the environmental and social dimensions of sustainability, including both horizontal and vertical transparency. 1. Use of e-information processing should be intensi?ed. Internet can facilitate the exchange of information between actors in the supply chain at low costs. Electronic devices like RFID can facilitate tracing as well as create transparency on the physical routes that products take through the supply chain. RFID facilitates creation of integrated information systems, although chain actors should take efforts to develop shared standards.

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2. Cooperation between supply chain partners and between companies and government can be improved. Information exchange can improve ?exibility and cooperativeness, since shirking and opportunistic behaviour within a supply chain is restricted. This can also be realised by concluding upon public–private agreements to cooperate in technological innovation while sharing costs and bene?ts. In this context, performance levels can be formulated for chain actors. An example is the already mentioned multi-year agreement made in the Dutch public–private agreement on energy reduction [26]. 3. Technical rigidities can be overcome by improved communication and information exchange on technological innovation opportunities, for example, through co-innovation. Chain-wide communication should lead to standardisation and sharing of costs and bene?ts. 4. Scale can lead to lower costs of measures. It can be gained by means of several instruments. Suggestions are: (a) Food safety is connected to contaminations of feed or medicine, problems stemming from animal diseases, transport conditions, and levels of hygiene in the supply chain. Environmental impact is not necessarily traceable directly for the end product. An extensive and user-oriented communication on environmental policy through company websites or through websites for speci?c quality labels can complement traceability systems. (b) Formation of vertical cooperation structures or the establishment of suitable chain-wide standards (see e.g., [41], providing a governance structure for addressing environmental goals. (c) Sharing and distribution of knowledge and expertise on sustainability and transparency via cooperatives and branch organisations that mediate between public demands and private concerns. 5. The role of the government is important for stimulating innovation and improving competitiveness, as was shown by Kalfagianni [21] and Porter and Linde [32]. Governmental legislation should be modi?ed from compliance-oriented to stimulation of cooperation in supply chains and networks, as is done in co-innovation projects. 6. Ways to limit administrative burdens are certi?cation and branding [7,40] as well as integrated information systems. Branding is a good way to make food product quality, provenance, and environmental care transparent for consumers and to achieve competitive advantage. It is clear that the way ahead is by means of improving the ICT capabilities of the food industry as well as organisation of information provision and exchange. Particular support should be given to farmers to invest in individual registration and identi?cation systems, like RFID combined with an integrated information system. This is in particular a challenge for crops and vegetables. We should avoid the pitfall of improving only what we have: control of processes inside the ?rm. To broaden the scope, information exchange should foster the whole supply chain and network. Since actors in a supply chain are not only connected to each other but are also dependent on the same source for value added, they should (1) share efforts to increase the value added by reducing administrative costs and other waste, and (2) ?nd ways in distributing it in a fair way to the bene?t of all. Technical solutions to create transparency are therefore not enough. Legal, organisational and institutional modi?cations are necessary to provide new ways of cooperation, to be able to bridge the knowledge gap between consumer and producer, and ultimately to increased sustainability through improved transparency.

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