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Bird’s Nest Farmers Find RFID Hard to Swallow…

When the concept of retail item-level RFID tagging was in its nascence, conspiracy theories abounded among privacy and civil rights activists, who believed that merchants such as Wal-Mart and the government would leverage these nefarious devices (dubbed “spy tags”) to track every movement of their customers/citizens as they went about their daily routines in their new Levi’s. With RFID technology well-established in many vertical markets at this point in time, the privacy fervor surrounding its use, particularly in retail, has diminished considerably. Still, RFID technology occasionally ruffles some feathers. Case in point: the ongoing protests among Malaysian bird’s nest farmers, who are strongly resisting ongoing government efforts (both on the part of Malaysia and China, the major importer of nests) to mandate RFID-enabled tracking of the nests during farming and processing in order to prevent counterfeiting and to protect consumers.

Why would anyone want to track bird’s nests? Certain swiftlet species build nests that are used to make bird’s nest soup, which is a delicacy in parts of Asia-Pacific, especially China and Hong Kong. The nests vary in cost depending on various factors, including their color and place of origin, with certain varieties fetching up to $10,000 per kilogram—which provides a strong incentive for counterfeiters to pass off inferior nests as high-end product. Furthermore, health and safety are major issues in this trade, particularly because of bird flu outbreaks in certain areas of the Asia-Pacific region. Therefore, not only is there a need to ensure authenticity of the product, there is also a requirement to trace it back to its point of origin.

Protesting nest traders cite concerns that the RFID tracking initiative is simply an example of bureaucracy and that complying with such regulations would unnecessarily disadvantage smaller-scale operations while benefiting a select group of major nest producers. While these concerns are understandable, we wonder whether these protesters have considered the potential upsides of adopting RFID-enabled tracking and authentication solutions, which have proven valuable in a range of other vertical applications including pharmaceuticals, consumer electronics and luxury goods.

Although investment in an RFID tracking and authentication solution may be a challenge for certain enterprises, the ROI these systems can potentially deliver oftentimes makes doing so a “no-brainer” decision, especially in scenarios such as the one in Malaysia where the current supply chain lacks transparency. From supplier’s perspective, not only would industry-wide adoption of tracking/authentication level the playing field against counterfeiters, it would also reduce the risks of inventory shrinkage as well. For consumers, tracking and authentication would provide better food safety and increased confidence that these products are safe for consumption.  All of these benefits could drive significant ROI in the near term for legitimate nest farmers. Only time will tell if RFID authentication ultimately will fly with them…(pun very much intended).

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