view current print edition




Grower-shipper groups voice concern over PTI

by Tim Linden | March 31, 2010
Some trade associations representing the grower-shipper community have raised concerns about the Produce Traceability Initiative, specifically its cost, the commitment of the whole chain to its enactment and the timetable.

Joel Nelsen, president of California Citrus Mutual, a Visalia, CA-based organization that represents the growers and packers of that commodity category, recently sent a letter, which he made public, to the presidents of both the United Fresh Produce Association and the Produce Marketing Association, asking that the PTI implementation timetable be postponed. In addition, Mr. Nelsen has advised his own membership to put the brakes on their individual PTI efforts until he can get some answers to some basic questions.

While others in the industry have not gone that far, an informal survey of grower-shipper organizations revealed that the concerns run deep.

Admittedly, Mr. Nelsen did not begin a detailed look at the voluntary traceability initiative and what is involved in compliance until earlier this year as the result of discussions during a CCM board meeting. But since then, he has surveyed the California citrus industry and discovered that the combined cost to the roughly 85 packingsheds involved would be in the neighborhood of $25 million. Before that money is spent, the CCM president said that there needs to be some assurances that this initiative will achieve traceability and that the companies at the end of the supply chain - namely retailers - are going to do their part.

"We are being asked to invest this money with no assurance that the retailers are going to do their part. And in any event, we don't think this will achieve traceability for us."

Mr. Nelsen argued that most citrus is sold in bulk, so once it hits the retail shelf, all connection to the traceable GTIN on the carton is lost. He added that for the citrus-packing industry, PTI is almost an unworkable program because of the large number of different GTINs each packer will have to have. He explained that almost every packer will require its own set of thousands of numbers because of the many different sizes and packing configurations that make up its offerings.

"Every packingshed is going to have to have employees at the end of the packingline dedicated to labeling cartons with the GTINs," he said. "It's not workable for our industry."

Mr. Nelsen said that discussions with experts in the field have not allayed his fears. "They tell me we can work around the large number of GTINs we need, but nobody has an answer to the point that we will not have traceability once our product is on display at retail."

Barry Bedwell, president of the California Grape & Tree Fruit League in Fresno, said that his organization has not formally asked for a postponement of the timetable, but he was aware of the CCM letter.

"We do think it is appropriate to raise these issues," he said.

Mr. Bedwell added that his group just concluded its annual meeting, and one session was devoted to PTI, with Tom Stenzel and Dan Vaché of United Fresh offering insight into the Produce Traceability Initiative.

"What really came out of that session is the realization that a lot has to get done," Mr. Bedwell said. "It raised a lot of questions. There is a very high level of concern."

He said that the league has not advised its members to delay their own efforts, "but we share the concerns that Joel [Nelsen] expressed. We aren't too far different than he is in his concerns."

Mr. Bedwell said that his members are very concerned that when it is their turn, retailers will not agree to adopt this universal effort. "We don't want a repeat of the third-party audit system, where each retailer has their own set of rules."

He added, "I understand that what happens legislatively is expected to mirror PTI, but our members think it makes sense to make sure that what we do is consistent with the legislation that is passed."

Mike Stuart, president of the Florida Fruit & Vegetable Association in Maitland, made similar points. "My members do have concerns about PTI. They are concerned about the cost and the [return on investment], and the complexity of it. They also want to make sure that the commitment is there through the rest of the supply chain. These are legitimate concerns [raised by CCM], and we are happy that they are being aired."

Mr. Stuart said that his board has not taken a position with regard to the pace of implementation but agreed that the timetable should be examined more closely, and he indicated that the PTI Steering Committee should take seriously the calls to examine the timetable.

Mr. Stuart did add, however, that his group recognizes the need for an effective traceability solution, and he noted that all the concerns being expressed about PTI do not indicate an unwillingness to adopt a traceability solution.

"PTI bubbled up as a traceability solution -- and that's a good thing -- but there may be other solutions that are more cost-effective," said Mr. Stuart. "There is enough concern at the grower-shipper level that we think this discussion should occur."

John McClung, president of the Texas Produce Association in Mission, echoed those same sentiments. "In the first place, we know that you cannot have an effective food-safety program without a traceability system. The growers and shippers in Texas are just like everyone else -- some are moving forward with PTI and many others are taking a wait-and-see approach. The concerns expressed by Joel [Nelsen] and others are legitimate. PTI is complex, and it is costly."

Still another grower-shipper representative -- Matt McInerney, executive vice president of Western Growers Association -- made similar points.

"Joel Nelsen has articulated concerns that we are hearing," he said. "We have heard from many in the shipper community who are concerned about this initiative. There is not a high level of confidence that their supply chain partners (retailers) will embrace the benchmarks as we move forward. Shippers are looking at the horizon and they do not hear their supply chain partners expressing enthusiasm as their own deadlines approach."

However, Mr. McInerney added, "I have not heard one shipper deny the need for a traceability program. They all know that an effective food-safety program must include traceability. They are just not certain that this one- size-fits-all concept works."

He added that the cost of PTI compliance at the shipper level is expensive. "These are difficult economic times, and the grower-shippers are wondering if this is just another situation of costs being dumped on them. They are questioning whether retailers are going to make that same investment when it is their turn."

The WGA executive said that many grower-shippers have embraced traceability on the consumer package level with clamshells and other packaging and are not certain they gain anything by adopting case-level traceability, which is what PTI advocates.

Mr. Nelsen said that virtually every firm in the citrus industry already has case-level traceability with its own systems. "I've been told [by my packer members] that if a problem arises [with a box of citrus], they can pinpoint the grove where it was grown within 30 minutes."

To the CCM executive, it begs the question: Will PTI do any better? Responding to the comments from the regional trade association representatives was Mr. Vaché, vice president of supply chain management for United Fresh. "They are raising some legitimate concerns," he said. "Cost is an issue. There are costs on both sides of the equation [for both shippers and retailers], and there is no guarantee that every trading partner will participate."

Mr. Vaché said that PTI is a voluntary program, and he urged grower- shippers to talk with their trading partners to make sure they are moving down the same path. "I can tell you that I know at least one of the top-five retailers is moving forward with the timetable, and they are expecting their suppliers to do the same thing. And I believe most of the top retailers are at the very least exploring what needs to be done."

Giving a pitch for the upcoming United Fresh convention in Las Vegas, Mr. Vaché said that one section of the exposition floor is reserved to explore the entire PTI issue and to foster interaction with service providers as well as trading partners up and down the supply chain.

"It is a great place to come and talk to your partners in a neutral setting and get some answers," he said.

Mr. Vaché said that he would not claim that all traceability solutions have been explored, but he said that PTI was developed by a group representing every sector of the industry, and this group did vet many different options before settling on the PTI solution as a standardized, universal option. He added that other plans, such as proprietary item-level coding, do not offer whole-chain traceability.

Regarding the argument that the industry moved ahead of the regulations, Mr. Vaché applauded that move. "There is no guarantee that the legislation will mirror what has been done, but the goal was to get out in front on this issue and let the government know how we think the issue should be solved."

The United Fresh executive said that traceability legislation that affects the entire food industry is coming, and while PTI is voluntary, eventually the produce industry will have to have a plan in place that is mandatory.