By Elizabeth Wasserman

Oct. 5, 2009—Four years ago, an extortionist claimed to have fed hay tainted with foot-and-mouth disease—which is highly contagious among cloven-hoofed animals—to livestock on an island off the coast of Auckland, New Zealand. Exports of beef, mutton, wool, cheese and other farm products are a pillar of New Zealand's national economy, so the country had to test tens of thousands of sheep, cattle and other livestock, as well as alert international trading partners about the threat.

The scare proved to be a hoax. No sign of foot-and-mouth disease has ever been found in New Zealand. But it drove home a point to government and industry about the need for more effective protection of animal health, the food supply and the export trade. Today, the South Seas nation is poised to join the growing ranks of governments that are mandating the use of radio frequency identification technology to better identify livestock and track the animals through the value chain.

Fetzer Farms employs an RFID system to track the amount of milk each cow produces.

"It was a damn good exercise that highlighted a lot of problems we would have had if that had been real," says Ian Corney, chairman of New Zealand's National Animal Identification and Tracing (NAIT) project, an industry and government consortium formed in the wake of the scare. NAIT recently concluded RFID pilots on a series of saleyards and meat processors, and is preparing a business case in support of a government-backed RFID program that would go into effect in 2011 for the mandatory tagging of cattle and deer. "What we have at the present moment is just a herd-based or mob-based identification system. When it comes to actually tracking individual animals, it becomes very difficult because it's all based on a paper trail," he says.