International Symposium on Certification and

Traceability for Food Safety and Quality

Beijing, China
October 18-20, 2007

Presentation Title:
Methods for Protecting Granular Information
Ownership Along Complex Supply Chains

Presenter:
Steve Holcombe, CEO
Pardalis, Inc.
 U.S. Beef Livestock Supply Chain Demographics
U.S. Cattle Inventory ~100,000,000

U.S. Cattle Operations ~1,000,000

650,000 U.S. Operation have fewer than 50 Cattle

U.S. Livestock Markets ~1,200

U.S. Feeding Operations ~90,000

U.S. Packing Operations ~650

U.S. Slaughter Cattle ~35M (Annual)

Livestock Market Cattle Traffic ~15M (Annual)

Top 5 Packers Kill ~75% of U.S. Slaughter Cattle

(Tyson IBP, Cargill Excel, CongAgra, Smithfield Packerland, U.S.
Premium Beef)

Tyson IBP produces approximately one out of every four pounds

of beef, chicken, and pork consumed in the U.S.

Tyson IBP is the primary (if not the sole supplier) of beef to Wal-
Mart,
the nation’s largest food retailer.

U.S. meat from beef livestock at retail is an approximately a $50B

market.
 Significant Actions & Events: 2002 - 2007

October, 2003: United States Animal Identification Program

(USAIP) proposed animal identification guidelines to the
United States Animal Health Association. The objective of the
USAIP guidelines is to enhance animal disease surveillance and
monitoring systems, and improve traceback capabilities when a
reportable animal disease event occurs. The proposal calls for
a system that allows complete traceback within 48 hours of
a confirmed reportable disease event.
December, 2003: Mad Cow case in State of Washington.
USDA Secretary Venneman announces that the USDA will
expedite the implementation of a verifiable system of national
animal identification system (NAIS) (i.e., the USAIP).
May, 2004: The USDA announces it would spend $18.8
million to begin the three-stage process for setting up a national
animal identification system to help contain animal disease
outbreaks.

Oct, 2006: After years of postponing deadlines, USDA stops

issuing deadlines on the implementation of any of the three
phases. USDA will henceforth focus on voluntary Phase I -
Premises Identification without deadline announcements. The
‘supply chain’ treats this announcement as a ‘throwing in of the
towel’ by the USDA.

Feb, 2007: NCBA shuts down its USAIO.

 Why Has Mandatory Animal RFID
Not (Yet) Worked?

‰ Fear of an IRS Conspiracy (more opportunity for taxation)

‰ Agency Capture (by ‘Agribusiness interests’)
‰ Costs not determinable (who pays for it?)
‰ Value not determinable (‘sold’ by USDA as an ‘insurance
policy’)
‰ Information privacy (Who owns my data?)
‰ Fear of Liability (“What they don’t know can’t hurt me”)
‰ Fear of Vertical integration (like the chicken industry)
‰ Fear of Government/USDA regulation (“We’re doing fine
without it”)
‰ Supply chain fragmentation (Highly segmented production
practices)
 Yet, 48 Hour Traceback Only Scratches The Surface

‰ Consumers do not know where their meat was first

produced (“It’s from Tyson”)
‰ Tyson does not know where the slaughter cattle were first
raised (“Yes, but know what feedlot it came from”)
‰ Calf Producers do not know where their calves are
slaughtered (calves from small producers may be sold a
dozen times before slaughter)
‰ Beef livestock are sold ‘as is’ (yet consumers are ‘pulling’
for more and more verifiable information)
‰ Foreign trade of U.S. beef meat has been severely curtailed
since Mad Cow case (loss of competitiveness and billions of
dollars)
‰ Insurance companies do not provide disease insurance to
calf producers (not enough information from which to do risk
assessments)
‰ Banks are not able to confidently track cattle collateral
(higher risk means higher interest and less availability)
‰ Other agencies will follow suit (likely through additional
unfunded mandates)
 An Information Banking Model

Producer Customers

The Internet
Granular Informational Objects
Object

Object ID Owner Permissions

Per Element

Element 1 Unique ID

Element 2 Unique ID

Element 3 Unique ID

Examples:
• RFID No.
• Birth date
• Social Security No.
• Blood type
• Genetic marker
 Granular Information Ownership

‰ Uniquely ID every data element

o Create central, data element dictionary

‰ Attribute ownership to every data element

o Ownership, stewardship, trusteeship, custodial care, etc.

‰ Make every data element immutable

o Immutable as to the owner
 Supplemental:

• Chinese patent #ZL02820809.9

granted June 20, 2007. See
www.pardalis.com
• North Dakota State University,
Dickinson Research Extension Center,
USDA CalfAID PVP Program. See
www.ag.ndsu.nodak.edu/dickinso/
• Presentation paper: Banking on
Information Ownership
Steve Holcombe, CEO
Pardalis, Inc.
www.pardalis.com
(877) OWN DATA
steve@pardalis.com