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Tackling Australia's food and fibre fraud

Food and fibre fraud costs Australia an estimated $2 to $3 billion annually, and with the NFF target to exceed $100 billion in farm gate output by 2030, this significant issue affects us all.

Prompted by anecdotes from producers of fraud’s potential risk, AgriFutures Australia commissioned the Deakin University report – Product fraud: Impacts on Australian agriculture fisheries and forestry industries. The research, which covers the broader sector, had two objectives:

1. Quantify the size of product fraud facing Australia’s rural industries by putting solid data around it
2. Highlight Australia’s domestic and international opportunities to mitigate the problem.

By addressing the challenges outlined in this report, Australia can protect its leading reputation in domestic and global markets and match it as a leader in curbing food and product fraud. Australia’s rural industries operate in a fast-moving world and technology may provide solutions to be able to lean into the challenge. Internationally, Australia is a world leader in terms of traceability systems, and we have sophisticated trace-forwards and trace-backwards programs that can guarantee the source back to production.

Quantifying the size of food and product fraud
The report found that food and product fraud’s extent was largely unknown in Australia and that currently the issue does not have a single, global, statutory definition. Put simply, fraud is committed when items are illegally placed in the market with the intent to deceive the consumer for financial gain. Consequently, the report recommended that an official Australian protocol and definitions
for fraud type should be set out, enabling more accurate documenting and trending. Drivers of product fraud included shortages or constrained supply in raw ingredients, supply chain complexities, and technology, such as poorly regulated online trading platforms and weak penalties.

Australia’s clean, green reputation also makes our produce an attractive target for food and product fraud, which occurs in export markets as opposed to domestic markets where systems are robust. The report traced losses to six fraudulent practices, including adulteration, concealment, counterfeiting, dilution, mislabeling and substitution.

Opportunities to overcome the challenge

Farmers and growers can’t combat this issue alone. Coordinated supply chains are the first place to start addressing fraud where solutions extend from the producer to the consumer. Anybody involved in the agrifood chain has some level of influence, and all the major commodities have programs addressing traceability and quality assurance systems. The producer can be influential by implementing action or simply by supporting their chain of supply to market and producer organisations guiding policy and regulation. The consumer has influence too, thanks to technology
that puts power in their hands, like with smartphone apps that can validate what’s written on the packet.

These innovative and emerging technologies include traceability, where a product is traced from production to domestic retail or export, and authenticity testing. Deakin’s Director of the Centre for Regional and Rural Futures, Professor Rebecca Lester, said that while guaranteeing a product’s origins can be costly, authenticity testing places emphasis on early detection and prevention, rather than responding to problems once they occur.

“Technology has come a long way and avenues now exist to guarantee product authenticity through analytical testing of the product itself. Technologies such as next-generation DNA sequencing, DNA chips and lab-on-a-chip technology offer great potential for effective, low-cost and rapid onsite solutions for a broad range of authenticity testing of products”, said Professor Lester.

Research into practice

Research is recommended to genetically barcode all Australian grown grape varieties from major grape-growing regions. The latest methods could be developed and tested to identify gene regions for DNA bar-coding to determine varieties as a tool for authenticating Australian wine. These solutions can be advanced in Centres of Excellence that create the environment for people to come together on shared challenges. Bringing people around a like-minded challenge is a proven approach to achieving success. Isolated work typically has limited results, whereas by collaborating, the dynamic produces the best outcomes.

Most vulnerable

Beef and veal, wine, and fish, including crustaceans and molluscs were identified as the most vulnerable to product fraud.

$500 - $900m*

Beef and veal fraud – with an estimated cost to Australian agriculture, fisheries, and forestry – were
prone to either product substitution, use of fillers to increase weight or volume, misrepresenting the
origin or provenance of produce, quality attributes, mislabelling (e.g., halal, organic, free range), or
expiry date fraud.

$75 to $140m*

In fish, crustaceans, and molluscs, species substitution was most common and included provenance and attribution mislabelling (e.g., farmed versus wild caught, frozen or fresh).

$150 - $205m*

Wine was commonly subject to counterfeiting, dilution, adulteration, misrepresenting provenance
and grape variety mislabelling.

*Estimated costs to industry as a result of product fraud