Understanding How the Internet Affects Agriculture

Larry Jones
December 2000

We hear a great deal about the Internet every where we seemingly turn. It seems that every business has a www. or world wide web address to advertise their products and to make sales.

By way of background, the Internet was created in 1969 by the Federal Government when they linked 4 computers together as part of a Department of Defense study to help protect the integrity of computers in case of a nuclear attack. The World Wide Web or WWW was created in 1989 in Geneva, Switzerland by a group wanting to provide linked computers with graphics and pictures. In essence, they added graphics to the internet allowing us today to "point and click.

How much do farmers use the Internet? According to a study done by the U.S.D.A.'s Economic Research Service, farmers and agribusiness firms are adopting the Internet as rapidly as any other recent technology that's been introduced in agriculture. The ERS study estimates that the share of farms with Internet access doubled to 29% from 1997 to 1999. More than 15% of these farms reported they have done business on the Internet - commonly referred to as e-commerce. This 15% figure means that roughly 1 of every 25 farms bought or sold agricultural products on the WWW in 1999.

How are farmers using the internet? Several reasons or methods of utilization have emerged, including:

Some commonly sited advantages of internet use by farmers includes:

Potential problems with internet use by farmers are many, but major factors include:

In summary, the internet is gaining wider acceptance among farmers. The use of this technology is not size specific, meaning that larger operations really don't have any inherent advantages compared to smaller farms. In fact, this technology may afford smaller operations access to markets that may not be available in the future through more traditional marketing approaches. Lastly, this technology has the potential to e nhance competition in agriculture rather than reducing competition.

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For additional information, please contact, Larry Jones.

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