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E-Business – What does it offer Farm Management

M McCarthy

Bendigo, Victoria


Opportunities to conduct business via the internet are growing rapidly. A recently launched Farm Management 500 project aims to build awareness of relevant e-business facilities, encourage members to trial and evaluate them and accelerate the adoption of those that prove effective. An initial audit of over 400 FM500 member businesses revealed that 80% are on-line. E-mail is used daily by 30% of those connected. Internet based weather, market and technical information are considered useful by 87%, 67% and 66%, respectively, of those on-line. Only 13% of respondents have used the internet to purchase farm inputs. Introductory e-business workshops have been conducted with the membership over the last five months. Some initial feedback and preliminary observations are presented.


E-business, internet, farm management, e-commerce.


Farm Management 500 is a network of ongoing farm management discussion groups facilitated by private consultants. The Farm Management 500 membership is largely broad-acre dryland grain growers and livestock producers of northern and western Victoria and South Australia. The results and observations presented apply only to the membership of Farm Management 500.

The Internet is continually creating new ways of doing business. E-Business has been heralded as presenting large benefits, especially for rural and remote businesses, such as farms (2). Simpson (1999) reported that, although business to business e-commerce growth had been significant, e-commerce opportunities relating directly to farming operations were still few in number. This situation is changing rapidly.

A FM500 project, commenced in June 2000, aims to raise the awareness of existing e-business facilities for farmers. Businesses will be encouraged to trial the facilities to evaluate their functionality and true worth as a business tool. The focus has been on truly interactive e-commerce websites that enable exchange of information and on-line purchasing.


Although basic training in the use of the Internet as an information source is common, there are few, if any, working models in training farmers on business applications of the internet. The following process was put in place.

1. FM500 Internet Audit – A questionnaire about internet use was mailed 450 FM500 member businesses in May 2000. The return rate was 90%.

2. Based on the needs and current activity of members in e-business, a series of introductory e-business workshops have been planned for 2000.

3. The workshops were designed to address the barriers to sustainable use of on-line services identified by Simpson (1999).

Table 1. Logic behind structuring of introductory e-business workshops

Barriers to sustainable use of on-line services

e-Business introductory workshop – strategy

Perceptions/experience of poor quality telephone lines

Choose venues with high speed Internet connections to demonstrate potential

Lack of confidence and skills in using on-line services

Provide opportunity for demonstration presentations followed by “hands on” Internet sessions on the same day.

Lack of awareness as to what on-line had to offer

Present a range of existing e-Business facilities. These represent different levels and models of interaction via the Internet.

Lack of suitable content

Carefully identify and select relevant facilities to be presented.

Difficulties finding such content if available.

Scout internet, identify suitable facilities and provide “ e-business guide”.

Being able to find someone to help when they encounter problems.

Presentation carried out by person intimately involved with the facility. Presenters stay on to provide tuition for ‘hands on practice’ session.

Subsequent FM500 group meetings follow up on the workshop generating feedback of individuals experiences with trialing e-business.


Use of the Internet

Eighty percent of FM500 members are connected to the internet, with a further 13% expecting to be connected in the next 12 months. Another 4% indicated they would be connected some time in the future.

A third of those connected have been for over 2 years. Another third (36%) of respondents have been connected, for 1-2 years and a third for less than one year. This result indicates the rapid uptake of the technology over the last 2-3 years. Eighty per cent connected is significantly greater proportion compared to grain, beef and sheep farms in general, 18% of which are estimated to be on-line (1). This result reflects the suitability of the FM500 network to undertake the project.

Who uses the Internet

Two hundred and sixty respondents rated themselves as ‘high’ (almost daily) users. The senior male of the business made up 44% of these ‘high’ users. This is thought to be a result of them being more likely to routinely check weather forecasts or market prices. The senior female in the business made up 30% of the daily users.

On average 53% of Internet use is for ‘business’, 34% ‘personal’ and 24% ‘education’.

Current use of the Internet

E-mail was used daily by 30% of those connected. Forty two percent use e-mail 2-3 times per week. This indicates that e-mail is becoming a significant means of communication for some farming businesses. This is a higher use compared to the 1997 Farmwide pilot survey (3), which reported that 21% of the businesses on-line were using e-mail daily and 25% 2-3 times per week (3).

Table 2. Frequency of internet use by FM500 members.


Internet Use


2-3 Times per Week

2-3 Times per Month









Discussion Groups












Browsing the Internet is most commonly carried out two or three times per week, or per month. Participants have reported that they are becoming increasingly frustrated with browsing due to the slowness of their connection, and the sheer volume of irrelevant material they encounter. Despite the constant promotion of the potential benefits offered by bulletin boards, discussion groups and chat rooms, they have largely failed to appeal as useful to the large majority of farmers. Eighty six percent of participants rarely or never use discussion groups, while ninety two percent rarely or never use ‘chat’. This result is very similar to that reported in Farmwide pilot survey 1997 (3) where 71% of respondents ‘rarely’ or ‘never’ used discussion groups while 81% rarely or never used chat rooms.

Table 3. On-line services considered useful by FM500 members.

Internet service

Percentage of on-line FM500 members who consider service useful



Market Analysis


Technical Information




Internet Banking


News and Current Affairs


Purchasing Personal Items


Selling Farm Produce


Purchasing Farm Inputs


Table 3 above shows that a majority of members are already using the Internet successfully to access weather, market and technical information. On-line banking is used by almost half of the 435 farms surveyed. The internet has been useful for selling products or purchasing business inputs for about 10 percent of the membership. This is similar to the 16% of farm internet users who had used the internet to buy goods and services in early 1997 (3). This area of e-business has not grown like expected over the last few years. News and current affairs are seen as useful by only a third of those online.

Future use of the internet

Table 4. Proportion of respondents interested in purchasing farm inputs online.


Percentage of those connected to the Internet



Yes – To find items but purchase traditionally


Yes – To find and purchase via the Internet




Table 4 above shows that 53% of on-line FM500 members are intending to use the internet for purchasing farm inputs. The Farmwide pilot survey in 1997 (3) showed 28% were ‘unsure’ of buying on-line, while 38% felt they would like to and 34% did not. This shows a general increase of businesses considering on-line purchasing, a significant reduction in those who definitely will not and still a large number who are ‘unsure’. Feedback from members regarding the on-line purchasing facilities trialed to date, suggests that the existing shopping and purchasing models are not suited to farmer’s needs and can be frustrating to deal with. The problem of slow line speeds is a major barrier to the further adoption of e-business by farmers. The introduction of wider broad band and satellite services will help assist greatly in the adoption of e-business.

Local farm suppliers have already felt some impact from the internet. The e-business trend will contribute to the trend of decoupling of purchasing product from purchasing advice. Many retailers are preparing for this eventuation.


Preliminary results and observations indicate the following:

  • Shopping on-line is still very much in its infancy. There are some good ideas and innovative concepts being developed. However the purchasing or interactive process is often slow and clumsy, and do not reflect the way that farmers do business.
  • Many are using the internet as a source of market information and intelligence prior to purchasing or selling a product. This is an area of potential growth.
  • A farm e-business guide is under development to raise awareness of e-business facilities and their web address.
  • The generally slow and poor quality internet services in rural areas are a major barrier to the promotion and adoption of e-business facilities by farmers.
  • Price benefits offered by dedicated web traders are generally not significant enough to threaten the relationship with local resellers at this stage.
  • Farm managers readily make use of the internet as an information source. However, the benefits of utilising the internet as a means of transacting business are not yet clear. The awareness of existing, and potential facilities, has been raised within the FM500 membership. It remains to be seen what will be the ‘killer’ e-business facilities for farmers.


The Farm Management 500 e-business project is supported by the Commonwealth through the Networking the Nation program. Thanks also to the following agribusiness partners of FM500; National Australia Bank, Pivot Agriculture, Aventis Crop Science and Caterpillar Australia.


1. Anonymous. 2000. Use of Information Technology on Farms 8150.0 1998-99. (Australian Bureau of Statistics: Canberra) p 13.

2. Groves, J. and Da Rin, J. 1999. Buying and Selling Online – The opportunities for electronic commerce for Australian farm business. (Rural Industries Research and Development Corporation: Canberra)

3. Simpson, R. 1999. Life is too short to run at 2,400 bps – The Farmwide online services pilot project. (Farmwide Pty Ltd: Canberra)

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