January 9, 2001

David Lyons of the Iowa Farm Bureau says that as barriers are overcome, farmers are embracing the technology that allows them to buy and sell commodities and services through the Internet. One of the biggest practical barriers to farmers' use of e-commerce is change. Lyons said that agriculture has evolved and adapted to change over time and that the Internet marketplace requires farmers to adapt to new technology.

Speaking at the American Farm Bureau Federation's convention in Orlando, FL, Lyons said, "The time has changed. If we don't use technology to customize our products and our relationship with consumers we are going to be disintermediated in business just as surely as the person who said I want to continue farming with horses at the end of the last century."

Lyons said because agriculture and the Internet are both global in scope, the technology offers new ways for farmers and ranchers to thrive in the 21st century. A survey of 1,000 Iowa Farm Bureau members indicated a correlation between their interest in the Internet as a tool of commerce and their access to the Web.

"There are two camps of Farm Bureau members – those who are online because they have the interest and the access and those who will be online in the future when their interest and access issues are solved," said Lyons. "So, it does show us that we are in fact from a practical aspect, ready for this."

One farmer who has already taken the e-commerce plunge is Florida citrus grower Steve Crump. The Crump family farm, which started a Web site in 1997 to sell citrus gifts online, generates about 30% of its annual sales from the Internet. The farm didn't even have a computer when the site began, first taking orders via fax. Crump hired a Web designer and programmer to help launch the site which has provided many benefits.

"Our site, giftfruitfromflorida.com, is available to the world 24 hours a day, seven days a week, 365 days a year. We're in business selling citrus every hour of every day," said Crump. "We get business through the day, through the night from all over, from people we don't know."

Crump said the Web has provided him an important new form of advertising his citrus to customers in the continental United States during his season from November to May. Little effort is required on the seller end because customers do most of the work filling out the online order form, said Crump. He cited the drawbacks to e-commerce as the costs of establishing and maintaining a site, the impersonal nature of conducting business online and growing competition.

"It is a fact that competition is increasing. The number of sites selling gift products is going up every day. When we began in 1997 there were probably 16 Florida gift fruit shippers selling or advertising on the Internet. About a year later there are 125 and I have stopped counting," said Crump. "The other thing about the competition is that they are ever improving and, by golly, you have to keep up with them."

Another speaker, Doug Yoder, director of marketing and risk management for the Illinois Farm Bureau, took conference participants on a virtual tour of Cybercrop.com, a popular grain exchange that helps match Midwest buyers and sellers of corn, wheat and soybeans. Yoder helps teach Farm Bureau members how to use Web sites and he said the best e-commerce sites offer easy navigation and a wealth of information with a few clicks of a mouse.

Yoder said two issues that will be important as farmers look to the Web to sell their grain at the highest price is the integrity of buyers and their credit rating. Sites such as Cybercrop.com provide that information to assure growers that they are dealing with reputable and creditworthy grain elevators.

"If the grain buyer is a state away, we may not know if they hold a valid grain dealer's license. We may not know if they contribute to a grain insurance fund in that state," said Yoder. "I would be very cautious. In fact, I would advise against a grower selling grain to anybody without a license. That becomes a very good safety feature of a Web site."

All three speakers said that e-commerce holds promise to facilitate the flow of goods and services in American agriculture. While some farmers may be hesitant to wade into the e-commerce waters, Iowa Farm Bureau's Dave Lyons said leaders and staff must come to the aid of farm and ranch members to help them benefit from the technology.

"Producers have to adapt to the Internet and e-commerce. There's no way around it. There is no practical outcome other than that," said Lyons. "Since they have to do it, national, state and county Farm Bureau executives and leaders have to get involved. We have no choice but to help members in doing this."