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12.3 New costs
As noted in Buying and Selling Online, the cost of access to
telecommunications networks is relatively higher in rural areas and this is
proving to be one of the limitations on the take up of e-commerce in
those areas. The Federal Government has recognised this and is
implementing the Networking the Nation initiative, administered by the
Department of Communications, Information Technology and the Arts.
The Government plans to invest almost $500 million in projects which
‘assist the economic and social development of rural Australia’ by funding
projects which:
• enhance telecommunications infrastructure and services;
• increase access to, and promote use of, services available through
telecommunications networks; and
• reduce disparities in access to such services and facilities.
Projects include funding for local governments, additional mobile phone
coverage, and funding Internet access for remote communities, for which
approximately $36 million is allocated. The aim is to provide access at a
reasonable cost and bandwidth, therefore stimulating Internet service
delivery. The major priority is to offer untimed local call Internet access.
Farmwide is currently engaged in trials to improve Internet service
delivery to remote areas by increasing the volume of data throughput.
Initiatives being trialed include one way satellite delivery and the
‘woomera modem’ which uses Australian technology to improve the
throughput on copper wire.
The other major limitation to Internet usage has been identified by some
as an unfamiliarity or fear of new technology, which may be overcome by
engaging training or management consultancies. These would be new
costs to traditional farming businesses.
For businesses using e-commerce to sell, additional costs include designing
websites (including arranging for security of payment), monitoring
electronic orders, and providing product support services. This cost may
be measured in the time required to perform these tasks which may or
may not be incongruous with the time requirements of operating the
particular agricultural business.
A potential commercial risk, rather than a cost, of e-commerce is the
danger that traditional stockists may see direct online selling as a threat to
their business, and react by refusing to continue to stock the product.
12.4 New business models
With the greater use of e-commerce, changes to the actual operation of
farms is unlikely to be dramatic, although in future there will
undoubtedly be a greater range of smart farm machinery that will
challenge traditional labour intensive agricultural practices.
In the short to medium term, while developments so far have focussed on
business-to-consumer opportunities, changes to business-to-business
supplier arrangements are also likely to occur. Presently, there appears to
be a lack of understanding on the whole as to the opportunities for
business-to-business opportunities of e-commerce. More efficient
relationships with suppliers rather than customers offers many potential
changes to the way agribusiness is conducted.
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