Groups race to get farms on to internet

Agricultural editor PHILIPPA STEVENSON looks at the arrival of rural e-commerce.

The country's two major dairy cooperatives are among a range of agricultural companies jockeying to provide e-commerce services to the primary sector.

Kiwi Dairies is about to launch Fencepost.com, a website designed to provide suppliers with milk production and quality information, along with weather and technical data. One of the company's equity partners in the venture, consultants McKinsey and Co, suggests the plans could go further.

In Australia this month, McKinsey was named as a partner with major agribusiness Wesfarmers Dalgety and rural publishing company Rural Press in an internet initiative "on a scale not seen in rural Australia."

The group aims to create a one-stop internet portal for primary producers.

They are working to finalise a $A40 million capital raising and plan to go live next month.

Fencepost.com chief executive Roy Baker, formerly Kiwi's financial general manager, skirted suggestions of a transtasman link-up.

"As we've looked at the IT issues we've been cognisant of [the Australian move] and making sure, where there are some opportunities to save some money, we have been," he said.

New Zealand Dairy Group has provided milk supply information on its internet site for about two years with about 2000 of its 7800 suppliers accessing it regularly, up from about 600 a year ago.

But the company said it was also part of "a consortium of top New Zealand business exploring e-commerce opportunities associated with the rural delivery needs of farmers and their families."

The project, known as RD1, is headed by Neal Murphy who would not elaborate on an account of the venture in a company newsletter. The report said the company had decided to go ahead with plans including integrating its retail AnchorMart stores with an internet-driven retail, information and service provider.

Wrightson, which launched the country's first national agricultural online service with a virtual store in March, has discussed agricultural portals with a number of interests, says chief executive Allan Freeth.

"We identified a long time ago, it was an important area.

"The successful models are clicks and mortar, and we have the only national rural distribution network, and a customer base of 80,000 clients.

"We have some of the key facets; so obviously people are talking to us, and we are involved."

Some observers have linked Wrightson with Dairy Group, but Dr Freeth said while the company had agreements in place, none was with the giant cooperative. "It is such a moving feast.

"We had a particular view a month ago, which we have changed 180 degrees on, in terms of the way this may develop."

He said announcements of the company's plans would be made within weeks.

This will coincide with Kiwi's plans to launch Fencepost.com, so Wrightson's about turn may have been from one dairy company to the other.

Dr Freeth said the company's research had shown 26 per cent of traditional farmers and 50 per cent of lifestylers were using the internet.

Mr Baker said surveys by Kiwi showed more than half its 5700 shareholders had computers, and a third were reasonably regular net users.

"To have daily milk production and quality data online, available within hours of testing, will be a catalyst for those who have been thinking about buying a computer to actually do so," he said.

Kiwi was using its bulk purchasing power to offer reasonably priced computers to shareholders.

A number of groups, including the Livestock Improvement Corporation and Dairying Research Corporation, have already established a "dairy gateway" to provide research and other information to farmers.

Mr Baker said Kiwi's site would link to that and related sites, but the company was also using the two corporations to provide productivity tools on Fencepost.com.

"The net will change the way business is done in the future, but from our perspective it will help with the goal of 4 per cent productivity improvement on-farm by being able to get information to farmers from one easy source."

Rural telephone lines do not allow good internet access for some country people and Kiwi had deliberately designed web pages that were not "heavy," Mr Baker said.

Bruce Parkes, Telecom's government and industry relations general manager, told the Federated Farmers national conference in Christchurch last week that Telecom made a loss of about $100 million annually providing service to rural customers.

It would cost $250 million to upgrade the network to give everyone a minimum reasonable speed for internet access and it was not fair or sensible to expect Telecom to meet the cost.

He said a number of new wireless and satellite technologies were becoming commercially available, and these would offer genuine high-speed bandwidth services to rural customers at affordable prices.

A member of the Ministerial Inquiry into Telecommunications, Cathie Harrison, said the inquiry believed that Telecom's obligation was to provide low quality data service suitable for internet use, as well as good quality voice services. The inquiry is due to report back on September 30.