Friday, July 20, 2012

RFID Technology - A Controversy in Malaysian Bird's Nest Industry

RFID stands for Radio Frequency Identification. It is a technology boosted by the Malaysian Government.
RFID allows a product to be easily tracked from the source to the consumer.
RFID has been suggested by Malaysian Government to be used in the bird’s nest industry which has been thwarted by a ban of the China Government since June 2011.
Bird’s nests may be sealed in a box with an RFID tag that contains a microchip embedded with data about the harvest. In fact, every step from harvesting to packaging can be tagged. The data is stored centrally with the government. It serves as a Certificate of Authenticity. This is a great measure to overcome counterfeit bird’s nest.
However, the main reason China Government bans Malaysia bird’s nests is its high nitrite content. Using RFID means higher cost to those involved in the bird’s nests industry.
Some supporters of RFID say that they can mark up the bird’s nest prices because RFID gives confidence to the consumers. This group of people has forgotten that Malaysia is only the second largest bird’s nest exporter (about 15%) after Indonesia (80%).
Indonesia government is now negotiating with the China Government to export directly bird’s nest to China.
The key thing to this issue is that the China Government never requested the Malaysian Government to use RFID.
If Malaysian Government insisted to use RFID, Malaysian bird’s nest will not be cheap. It means its bird’s nest will not be competitive in the China market compared to that from Indonesia who never suggests the use of RFID.
In such situation, RFID is a white elephant, not realistic at all in the face of global competition. So long as Malaysian bird’s nest can comply with China Government requirement namely nitrite content below 30 ppm, there is no necessity to have RFID which only serve as a certificate of authenticity. China as a consumer of bird’s nest, if they are health conscious will definitely test our bird’s nest on its nitrite content. Exporters who do not comply will be banned.
RFID will only be useful if our competitor also uses it. Only then, we have a fair platform to compete. For the moment, it is simply impractical.
Posted by Chai Yong of