Enabling Agricultural Traceability through Data Interoperability

Australian Organic Limited

Data Interoperability Framework Submission

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EXECUTIVE SUMMARY

As Australia and the world transition towards digital systems, the necessity for a robust data interoperability framework becomes increasingly apparent. Without such a framework in place,
Australia risks lagging behind its trading partners, potentially increasing the compliance costs for operators engaged in international trade.

In the organic industry, these challenges are already evident. Current data collection frameworks for organic operators are not aligned with those of our trade partners and, arguably, are not synchronised with the broader agricultural industry. This discrepancy is partly attributable to the lack of recognition of organic within existing data collection systems, making it difficult to assess the industry’s strengths and weaknesses and hindering engagement with stakeholders across the agricultural sector.

As the peak industry body for the organic sector in Australia, Australian Organic Limited (AOL) emphasises that certified organic products undergo rigorous processes throughout the entire supply chain to ensure the integrity of organic inputs. Consequently, the traceability mechanisms for organic products are already in place, accompanied by established data collection methods that can contribute to the improvement of product traceability systems within the broader industry.

AOL welcomes this opportunity to provide a submission regarding the Data Interoperability
Framework and to submit feedback on the current data interoperability challenges faced by the organic industry.

RECOMMENDATIONS

1. Ensure representation of organic industry stakeholders within the Governance Structure of the
Data Interoperability Framework.

2. Implement improved data collection methods that distinctly categorise organic products,
enhancing its visibility and recognition within data systems.

ORGANIC INDUSTRY OVERVIEW

Australia is an agricultural export nation with over 72 per cent of all production exported1. As its organic sector continues to evolve, there is a pressing need to expand market reach and diversify trade avenues for organic products.

1
Department of Agriculture Fisheries and Forestry 2023, Snapshot of Australian Agriculture 2023.
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Australia currently has over 53 million hectares of certified organic farmland 2 . This represents approximately 12.4 percent of arable farmland nationwide and about 60 per cent of the world’s organic land mass. These figures underscore the burgeoning significance of the organic sector within
Australia’s agriculture industry.

The Australian organic industry is currently worth a conservative total of $2.6 billion inclusive of direct and indirect contributions to the economy, constituting roughly one per cent of the global organic industry’s $220 billion value. With 3,035 certified organic businesses, this sector supports over 22,000 full-time equivalent workers at any given time3.

Domestically, there is a growing demand for organic products, with 35 per cent of surveyed consumers increasing their household budget allocation for organic purchases from 2021 to 2022 4.
Projections suggest that the domestic industry will more than double in the next five years, reaching
$5.8 billion from the current $2.6 billion total5. Moreover, Australian organic exports are forecast to grow at an annualised rate of 29 per cent up to the 2026/27 financial year6.

Of significance is the demographic most inclined to purchase organic products, which predominantly falls within the 18 to 39 age bracket7. This indicates a growing trend among younger generations towards prioritising origin and sustainability in their food choices.

Despite these positive domestic trends, a key challenge facing the sector is the devaluation of organic produce when sold into conventional streams due to limited market access. This disparity partly explains why the industry's overall value at $2.6 billion is considered conservative, as once organic produce enters conventional streams, it loses its organic classification.

Greater collaboration between the government, relevant departments, and the organic industry is crucial to surpassing growth projections and addressing the gap where Australia contributes only about one per cent of the global industry’s value, despite possessing around 70 per cent of the world’s organic farmland.

2
Australian Organic Limited 2023, Australian Organic Market Report 2023.
3
Ibid 2
4
Ibid 2
5
Ibid 2
6
Ibid 2
7
Ibid 2
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ORGANIC INDUSTRY AND THE INTEROPERABILITY FRAMEWORK

As outlined in the National Agricultural Traceability Strategy, one of its visions is the establishment of connected, aligned, and interoperable world-class traceability systems along supply chains 8 .
Certified organic operators in Australia adhere to the National Standard for Bio-Dynamic and
Organic Produce (The National Standard), necessitating compliance throughout the entire supply chain to maintain organic status9. Consequently, the organic industry is well positioned to provide insights into the requirements for the proposed interoperability framework, given that understanding the origins of inputs for organic products is a fundamental prerequisite for organic certification in Australia10. For a practical example of the challenges faced and the potential benefits of an improved interoperability framework, see the case study in Appendix A.

For the Data Interoperability Framework to be effectively designed, incorporating feedback from the certified organic industry will be vital, given the inherent requirements already in place. Within the organic stakeholder base, certifiers of organic products and organic operators possess valuable insights into how operability systems should be implemented and maintained, making them integral to a broader governance regime.

ADOPTION CHALLENGES FOR ORGANIC

The challenge facing the organic industry in Australia regarding data interoperability is two-fold, spanning both the domestic and export levels. At the domestic level, existing departmental surveys lack specific categories for organic products, making it challenging to accurately measure the industry’s size and the volume of organic products entering conventional markets.

Without dedicated categorisation for organic products, achieving data interoperability becomes a significant hurdle, as organic data is subsumed into pre-existing categories. This results in underutilisation of organic data within the broader agricultural landscape and complicates co- ordination efforts due to the need to gather data from different sources across the agriculture sector. For instance, AOL’s recent market report relied on various data collection formats, including surveys, certifier data, and information from other sources that were based on estimates11.

Improved interoperability would not only offer a clearer understanding of the organic sector’s landscape within Australia but also facilitate better co-ordination of data between organic and

8
Department of Agriculture, Fisheries and Forestry 2023, National Agricultural Traceability Strategy.
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Australian Organic Limited 2022, Certified Organic Audits: Why Trust Organic? https://austorganic.com/certified- organic-audits-why-trust-organic/
10
Ibid 9,
11
Ibid 1.
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conventional agricultural sectors, reducing reliance on disparate data collection methods and minimising uncertainty.

Domestic Level Challenges

Organic production data is not consistently collected by the relevant research and development corporations (RDCs) nor is it readily available to producers to understand current domestic production insights. This results in a limited understanding of:

• Potential production opportunities; and
• The overall contribution of the organic sector to the economy

Additionally, the lack of market opportunities for organic operators often forces them to sell their products to conventional markets, resulting in the loss of organic classification. This is in-spite of the product having gone through the process for certified organic products up until the point of sale.
Implementing robust data structures to ensure accurate information tracking is imperative for measuring organic produce, even if it is destined for non-organic use.

For example, as highlighted by Hewitt Agribusiness (see Appendix A for an example), the lack of differentiation in the NLIS for organic certification creates additional administrative burdens and complexity. Without proper data collection and integration, organic producers are forced to manually verify and track their products’ organic status, leading to inefficiencies and production losses.

Export Level Challenges

Concerns persist regarding data collection in the export market, primarily due to the fragmented nature of data availability across the organic industry. Presently, data collection for organic exports relies heavily on certifiers, making it difficult to obtain a comprehensive overview of organic product exports from Australia. This lack of centralised data collection poses co-ordination challenges for the industry in showcasing its overall strength within Australia’s agricultural sector.

Moreover, technical issues around data interoperability with key trading partners exacerbate export challenges. For instance, Australia’s data collection system lacks interoperability with the United
States, the largest organic market globally. This disparity can prolong business processes for businesses exporting organic goods with the United States, impacting operational efficiency.

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PREVIOUS ENGAGEMENT

AOL has actively participated in previous submission processes related to traceability, including the following:

National Traceability Strategy 2022

In its response to the National Traceability Strategy, AOL highlighted the limited references to organic in the original draft and emphasised the necessity for greater education on the importance of traceability, as well as the role that organic could play in an overarching traceability strategy.

While supporting the need for the National Traceability Strategy, AOL emphasised the importance of preserving industry innovation, noting that certified organic products have adhered to a nationally enshrined traceability system since 1992.

AOL welcomed the acknowledgement of organic in the final version of the National Agricultural
Traceability Strategy, particularly within Objective 5, which focuses on meeting new product claim requirements and evolving market demands. This inclusion recognised the need for continuous improvements in certification schemes to enhance consumer trust12.

National Agricultural Traceability Strategy: Implementation Plan 2023-2028

In its submission for the Implementation Plan, AOL reiterated the importance of ongoing education on traceability requirements and highlighted the increasing need to build consumer trust, emphasising the opportunities that exist for organic through the value-add that enhanced traceability can provide.

The submission highlighted the significance of continued data sharing and collaboration, not only within the organic industry but also across the broader agricultural sector. AOL emphasised that integrating and adapting the traceability principles developed by the organic industry into wider agricultural use would be essential, especially as the government looks to enhance traceability and data interoperability across industry sectors.

12
Ibid 9.
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CONCLUSION

AOL firmly believes that the organic industry can significantly contribute to the development of a robust Data Interoperability Framework, benefitting Australian agriculture both domestically and in terms of trade and market access.

As highlighted in this submission, the organic industry currently faces challenges with data interoperability due to its misalignment with non-organic agriculture and international organic markets. The absence of clear data collection mechanisms for organic operators exacerbates these issues, hindering organic operators’ ability to export products and impeding organic stakeholders’ access to accurate information related to their sector. As demonstrated in the case study provided in Appendix A, this discrepancy burdens organic operators in Australia seeking entry into international markets.

The organic sector, with its extensive experience in maintaining traceability along the supply chain for organic products, is well-positioned to contribute to the Data Interoperability Framework. This expertise, ingrained in organic certification processes since 1992 and highlighted in AOL's previous submissions on traceability, underscores the importance of organic representation in shaping interoperability initiatives. Direct involvement in the framework will allow for insights from the organic industry, highlighting successful traceability systems and their potential to enhance interoperability across the entire agriculture sector in Australia.

By addressing the challenges outlined in this submission and leveraging the organic industry’s expertise, the development of a robust Data Interoperability Framework can not only streamline operations within the organic sector, but also facilitate greater cohesion and efficiency across the broader Australian agricultural industry.

ABOUT AOL

Australian Organic Limited (AOL) is the peak industry body for the organic in Australia that strives to create a positive impact for humans, animals, and the environment, now and into the future. AOL is led by an experienced team committed to progressing the interests of the organic sector and delivering a world where organics is recognised for its environmental, social, and economic benefits.

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APPENDIX A
Cast Study: Enhancing Data Interoperability for Organic Livestock Traceability –
Insights from Hewitt Agribusiness

Hewitt Agribusiness (Hewitt) is Australia’s largest organic meat producer and the leading fully integrated paddock-to-plate supply chain for certified organic meat in the world. The company's operations span livestock production to branded retail-ready products, including well-known brands such as Cleaver’s Organic Meat. Hewitt exports to key international markets such as the USA, Asia and the Middle East. This positions them uniquely to provide insights into the challenges and opportunities within the traceability and data interoperability landscape across the organic sector.

Challenges and Insights from Hewitt

1. Lack of Organic Certification Differentiation in NLIS

In line with industry mandates, every animal sold by Hewitt has a National Livestock Identification
System (NLIS) tag tracking its movements across Australia. However, the NLIS currently does not differentiate between organically and non-organically certified livestock, unlike systems used for EU certification. This lack of integration for organic certification within the NLIS system adds a layer of complexity and increased administrative burden, as the organic status of livestock needs to be recorded and tracked manually through additional resources. It also presents traceability assurance difficulties with transfers between properties, abattoirs, and saleyards. It was emphasised that, if the NLIS could automatically flag organic livestock similar to EU certification, it would save organic livestock producers significant paperwork and help maintain the integrity of organic certification.
The additional time and resources spent on managing and verifying organic certification manually not only increases operational costs and administrative burden but is also ultimately paid for by the operator.

2. Challenges with Data Integration and Centralisation

While the NLIS database is currently undergoing an uplift program aimed at enhancing its capabilities, the devices do not yet store detailed data about each animal, such as its organic status, birth date, breed, and treatments. If all this information could be stored on the NLIS tag, the complete data would travel with the animal, enhancing traceability and reducing the need for manual data entry when livestock change ownership. Currently, each time livestock is sold, new owners must manually re-enter data into their systems based on only supplied information, which is inefficient and prone to errors. Additionally, different producers use different software systems that don’t necessarily integrate, creating additional administrative burden and increasing the potential for inaccuracies in record keeping across the supply chain.

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3. Lack of Mandate for Comprehensive Information Sharing

There is no mandate for producers to provide buyers with comprehensive information about each animal. Currently, the information that must be shared is limited to the minimal requirements of the NVD, which is mob-based and does not individualise data for each animal. The sharing of additional data is market driven only, meaning that the provision of additional evidence of certified status will improve the sale price.

Conclusion

These insights from Hewitt illustrate the critical need for integrating organic data into existing national systems to enhance traceability and data interoperability. As highlighted, this much- needed integration would significantly reduce administrative burdens, maintain the integrity of organic certifications, streamline processes across the supply chain, and avoid the associated financial losses with cumbersome manual verification and management. Enhanced traceability, reduced paperwork, and improved regulatory compliance are crucial for supporting the profitability and sustainability of organic livestock producers and encouraging more producers to explore this premium market opportunity.

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