Witness Testimony Mr. John Molloy Managing Director ViaTrace, LLC 4 Daniels Farm Road, Suite 116 Trumbull, CT, 06611 Radio Frequency Identification (RFID) Technology: What the Future Holds for Commerce, Security, and the Consumer Subcommittee on Commerce, Trade, and Consumer Protection July 14, 2004 11:30 AM Good Morning. I am John Molloy, Managing Director of ViaTrace – a provider of traceability solutions to government and industry worldwide. As a father and businessman who is personally involved with, and affected by, the privacy and technology issues being addressed by the Committee today, I applaud the Committee's leadership in examining them. I would also like to thank the Committee for the opportunity to offer my thoughts this morning, and will begin by briefly sharing my first-hand experiences in developing and implementing a multi-national, RFID-enabled traceability system across Europe’s Agriculture sector. In response to several widespread disease outbreaks that put the lives and wellbeing of tens of thousands of families and farmers at risk -- not to mention a crucial, multi-billion dollar agriculture sector -- the European Union embarked on the most extensive research and development initiative ever undertaken into livestock movement and disease control. This European Commission funded project leveraged the resources of six nations, and took the equivalent of 55 person-years to complete. Our company, ViaTrace, was selected to utilize the research from this project to design and implement a pan-European animal traceability system known today as ViaHerd. The singular purpose of ViaHerd is to protect the public health and the agriculture sector that every citizen depends on. Designed as a multi-national, "farm-to-fork" traceability system, ViaHerd’s success ultimately rests on the successful collection and cataloging of terabytes of information. The information that ViaHerd collects is available to a variety of users based on their credentials, roles, and responsibilities. For example, a farmer can quickly access and analyze information about his herd, but he cannot access information about his neighbors herd. Whereas, veterinary officials would have access to a much more limited data set and only for specific reasons, like during the time of an emergency, or crisis situation (when the need to quickly and accurately reconstitute a herd can mean the difference between life and death). An emergency situation would be declared based on two scenarios: an airborne disease outbreak, (like FMD) or the identification of a genetic disease (like BSE). In order to effectively locate all of the animals a single cow came in contact with requires that a host of information is recorded in a standardized format each time the animal is moved, or medicated. For example, in the US there are roughly 96 million cattle, of which about one third are brought to slaughter each year. An effective system would capture information about where the animal was born, where it was raised, which medications it received, when and by which veterinarian. Considering the providers of this information -- generally farmers and veterinary officers -- are often "in the field," the business challenge for us was to make the collection of this information as timely, accurate, and efficient as possible. ViaTrace often relies on RFID technology to achieve this objective. Once the data is accurately captured, it must be formatted into a standardized structure, like the product classification a bar code provides. The structure has to be both rigid and dynamic. Rigid in the sense that, like the debit and credit structure of the banking world, there must be full accountability and compliance. For example, if an animal were sold from one producer to another, the system must show that it was both sold and purchased. Dynamic in the sense that it must show who transported it and by what route (this can vary based on any number of conditions). Therefore, considering the billions of animals bought and sold each year for human consumption, coupled with the increased risk of bio-terror, airborne and genetic diseases, efficient, comprehensive data capture tools - like RFID tags - are practically a global trade requirement. The EU plans to implement a pan-European electronic animal identifier system by 2006. At that point, the system will not only gather information from electronic readers of individual animal tags, but will also include an electronic identifier management module. Say for example the electronic identifier is in the form of an ear tag. In addition to registering the tags themselves, ear tag suppliers and distributors could be registered, along with the individuals authorized to apply ear tags to animals (farmers, veterinarians, control assistants, etc). The system would then monitor the distribution and use of ear tags prior to their application to animals, assisting in the audit, control and the re-ordering process to help prevent fraud and loss of revenues to government agencies. This layering of information is important because the sheer volume of transactions in a 40 nation trade zone invites the possibility for both inaccurate data and increased fraud -- both issues are in direct conflict with ViaHerd’s intended objective of protecting the public health and welfare. ViaHerd ’s sophisticated data capture and authentication technologies balance business needs with privacy concerns and legislative requirements. Today, any nation, producer, or veterinarian that uses our system, is automatically fully compliant with all EU agriculture, trade, and privacy laws. This is good for business -- but it is even more important for the protection of public health. Therefore, it is our belief that RFID is a critical component of any system that relies on timely and accurate data. I would like to offer a few lessons we have learned through the development and implementation of ViaHerd, which I believe may be relevant to your inquiry: -- Protecting the public’s health while safeguarding global trade is a delicate balance that can be and has been realized -- Cooperative action involving government and industry is the ideal model for action, since it is critical to protect the public health in a way that strengthens rather than burdens the agriculture sector -- Preparatory action -- taken before the specter of mad cow disease infects our supermarkets, school lunchrooms, and homes -- is possible and vital. A fully evolved RFID-enabled animal registration system is one of the keys to providing stable and sustained international commerce. The United States has an opportunity to embrace this technology to the benefit of all stakeholders. In light of its intentional design to meet public health, business, legislative and privacy priorities, I hope the ViaTrace technology will serve as a useful model for your consideration. In closing, I thank the Committee again for its leadership and hope the Committee finds the experiences of ViaTrace to be of value. All of us at ViaTrace stand ready to be a resource as you work through this challenging issue. I appreciate your time and attention, and would be happy to answer any questions you may have at this time.