Liability Risk Increases Under Enhanced Traceability

CANADA - An assistant professor of law with the University of Saskatchewan suggests, when entering contracts with food processors, farmers need to consider their increased risk of liability as a result of enhanced food traceability systems, writes Bruce Cochrane.
calendar icon 10 June 2009
clock icon 3 minute read

Last week scientists, food industry stakeholders and government representatives gathered in Winnipeg to discuss traceability and provide input for a national traceability research and development strategy.

Patricia Farnese, with the University of Saskatchewan, told those on hand the key to traceability is that it links a farmer to his product throughout the value chain so farmers have lost the anonymity that had protected them from liability in the past.

Patricia Farnese-University of Saskatchewan

My concern is that, traceability is a good system.

It does allow people who have done things that are illegal or unsafe to be found out and held accountable to that but there is a potential for farmers in particular to be exposed to new risks as quality standards change over time or new requirements from purchasers.

So traceability systems have to be designed with the idea of either minimizing exposure to liability for farmers or compensating them for taking on increased liability risks.

Right now what I think I see in contracts with farmers is sort of blanket liability or indemnification clauses without really understanding the scope of that liability.

If farmers are willing to take on huge amounts of liability then I think it's only fair that they be compensated for that and traceability systems should be designed thinking about that kind of exposure.

Ms Farnese stresses our food in Canada is safe so we shouldn't see a lot of litigation but, in rare cases where there is an incident, we need to ensure the scope of liability matches the harm that was done.

She encourages commodity groups to work with industry to negotiate model contracts that fairly distribute the liability risk along the value chain.

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