beyond pt 0 23/1

• increased access to markets (particularly for some niche industries such
as horticulture).
In reaching these conclusions, the authors caution that Internet take up is
more likely on the more profitable or larger farms, which may give those
users a further competitive advantage. For e-commerce to be used to its
potential, the overriding need in rural Australia is therefore an adequate
regional telecommunications infrastructure.
Overall, cost savings and productivity improvements are likely to arise
from quicker access to more accurate information, such as price and
weather information. The lower cost, ease and speed of transferring
information between rural users will also benefit agriculture producers.
For example, chat rooms and discussion groups are creating virtual
communities for dispersed people that facilitate the spread of important
information among users. Examples of sites include Farmwide’s online
discussion group and the Koninin Group’s forum site.
E-commerce will also increase competitive pressures and thereby reduce
costs in the farm services sector, as the Chairman of the Australian Wheat
Board noted recently:
The emergence of electronic commerce is to set to fuel profound change within
the [farm services] industry within the next five years. There is insufficient profit
in the sector for everyone to survive and the development of the Internet will
further erode margins.
That pressure is going to get worse as more and more people come on the
Internet, as more and more people get the communications systems in place on
their farms, which they are doing at a fairly rapid rate.
We are going to see more and more competition on the traditional way of
doing business.
Cathy Bolt, ‘Impact of e-commerce to change rural Australia’,
The Australian Financial Review, Friday 14 January 2000.
As is the case for other sectors, cost savings should arise from new online
marketing channels that reduces marketing costs. So far, this has been
confined largely to highly processed consumer goods such as flowers and
wine. However, e-commerce also opens possibilities for reducing costs in
sales between wholesalers and retailers, as discussed in the box below.
Box 12.2
GreenNet
Traditionally, plant wholesalers sell products at markets or through trucks laden with
samples that do the rounds of retailers. However, GreenNet, a new web-based
e-commerce service for horticultural businesses, intends to make the ordering and
delivery of plants faster and more cost-effective.
The website catalogues each wholesaler’s products and price list. Retailers paying an
access fee can then decide what, and from whom, they want to buy and order
electronically. Searches for plants can use either common or botanical names, a
particular wholesaler or a state. A photograph of the plant is displayed showing
price, pot size and grower.
GreenNet claims it can reduce costs associated with running trucks, which for some
businesses can be $60 000 to $100 000 a year. In addition, wholesalers can reach a
much wider range of retailers without the traditional associated costs.
Source: Kate de Clerq, ‘A Business blooms on the net’, Business Review Weekly, November 5, 1999,
p. 111.
Governments have also identified a role for themselves in assisting a wide
range of agribusinesses to market their products online. An initiative of
the Federal Government is the FoodConnect Australia program which
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