E-commerce: Ways found through the rural digital divide

Rural phone lines may be overloaded and electric fences interfere with the signal, but the primary sector is fast getting wired.

A few signs of the times:

* After nine months of operation, Woolnet, the net-based wool trading system, had its first $1 million month in September and has more than 800 farmer clients.

* Livestock Improvement Corporation, the Dairy Board's farm and herd management agency, has more than 10,000 visits a month at its site.

* After six weeks, fencepost.com, the 'virtual co-operative' launched by giant dairy company Kiwi, has more than 2000 dairy farmers and 1200 non-dairy farmers registered as users.

* AccessNZ, which lists 506 agriculture-related sites, ranks fencepost.com top for hits, followed by the Ministry of Agriculture and Forestry site. Also in the top 10 are New Zealand Dairy Foods' Anchor site (4th), Livestock Improvement (9th), and Hortnet (10th).

Of the 20,000-plus sites ranked by AccessNZ, fencepost.com comes in at 57th place, and MAF 122nd.

Sinclair Hughes a director and shareholder of iAgri - a long-established developer of farm management software which is now sold internationally - is confident that technology will solve rural people's interconnection problems, though that is likely to take years rather than months.

That was also the conclusion of a MAF study into the telecommunication potential for rural areas which identified a growing 'digital divide' between urban and rural dwellers.

But it also said the existing copper wire, local access infrastructure would continue to be of great importance to rural New Zealand.

The study found that the two main issues limiting net access for rural people were exchange overloading and network access speed. There were also issues external to the network, including interference from electric fences.

While MAF said an access speed of 33 kilobytes per second was generally considered the minimum acceptable for net use, Telecom had said that upgrading the rural network to provide that level for all users would cost $550 million.

"New technologies such as broadband satellite may take some of the pressure off the rural network if they are widely adopted, but a reliable uplink connection to the network is still required," said MAF.

"Therefore, it is likely that the problems associated with exchange overloading due to concurrent calls will continue unless upgrading occurs. It is difficult to see how the rural sector can be adequately serviced for internet access without access speeds of 33kbps over the next two to five years."

Mr Hughes believes the bulk of farmers have reasonable connections and the main problems lie in the more remote areas where communication has always been a problem.

In general, rural and urban computer ownership was about equal - around 50 to 55 per cent of the population - though some put rural use even higher, he says.

"The big question is how many are being used for genuine aggressive farm management and benefit, how many for farm management and the GST return, how many for the kids, computer games and as a tax deduction, and how many are gathering dust?

"To us, still, the biggest inhibitor in usability of computer technology for farmers is the keyboard because it is slow, and because they are such infrequent users of it," he says.

"To really make use of the technology we will have to find other ways to get information into the computer and then interact with it."

Mr Hughes says another common problem for farmers was sifting through the vast array of information on the net, evaluating what was relevant and finding time to use it.

"I've talked to people who've said they have this marvellous new thing, and the farmer is going to be able to sit down and dial up before he milks the cows. I say, 'get real, it is not going to happen, because there are a myriad other things to do'."

Mr Hughes says the limits on computer use were mostly practical.

"There is one telephone line in, the telephone work is done at night at around 8pm, the kids may be on doing internet things - when is the farmer going to have time to sit down and do e-commerce purchasing?"

And trials of purchasing on websites had taken up to 20 minutes to complete.

"You can pick up a phone or send a fax in 30 seconds. There has to be a realistic benefit to the farmer to get that [e-commerce] through," Mr Hughes says.

However, e-commerce was likely to be only a tiny piece of the net's benefit to farmers.

"We see the real opportunity for internet technology in information and technology transfer because farmers are hungry for that information, and because it is out there and available now on company and crown research institute sites and so on. It is just a matter of packaging it up, letting people know where it is, and putting in a delivery mechanism.

"That could have an immediate and very positive benefit without even looking at e-commerce purchasing."

One big opportunity for New Zealand agriculture would be easier access to international markets, information and services, he says.

"It's not just in using the technology for cost savings but trying to find new and easier means of accessing, say, buyers in China or India. I got onto to an Indian website the other day and the amount and range of things people were wanting to buy and sell was mind-boggling. Every day it had hundreds if not thousands of new entries."

For now, Mr Hughes rates net usage as at the embryonic stage.

He forecasts that computer and net usage will become so all-pervasive that "they won't even be thinking of the internet per se. It will be just a means of communication, purchasing, or selling stock. Just as you don't say I'm on the telephone line you won't be saying I'm on the internet. It will be just another mechanism of doing business.

"At the end of the day, though, it still has to produce a better benefit for the users, and I still don't see it there, largely. It is being provided by some but now most people will say it is of interest rather than benefit."

Case Study:

Dairy Gateway

Why did you get into e-commerce?

Because the net is becoming a communication tool an increasing number of farmers are using.

What did you do?

Livestock Improvement already had one of the largest farming sites in NZ (www.lic.co.nz) but believed there was a need for an net "gateway" to NZ farming. Other sponsors are NZ Dairy Exporter magazine and the Dairying Research Corporation.

What benefits has it had?

It has provided a net listing of "everything you need to know" in NZ Dairy farming.

How have you measured this?

We regularly measure the number of visitors to the site, with an average of 2200 people visiting each month.

What difficulties have you had?

None. The dairy industry has enthusiastically supported the initiative.

In hindsight, would you have done anything differently?

This was considered to be a service to the industry which would facilitate and encourage use of the net, and assist industry organisations with increased net patronage.

What next?

Livestock Improvement's own site is growing in size and use each month; an increasing number of our products and services are now accessible via the net.

Links:

www.dairygateway.co.nz

www.lic.co.nz

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