Internet Access and Internet Purchasing Patterns of Farm Households

Abstract

The Internet is becoming an increasingly important management tool in production agriculture. Using data from the 2004 Agricultural Resource Management Survey (ARMS) and a double-hurdle estimation approach, we explore the adoption of computers with Internet access by and Internet purchasing patterns of farm households. Adoption of the Internet is positively related to age and education of the operator, off-farm work, presence of spouse, participation in government programs, farm size, and regional location of the farm. Internet purchasing patterns of farm households are positively related to the education of the operator and spouse, presence of teenagers, and regional location of the farm. Finally, farm businesses and their households are more likely to purchase a greater percentage of non-durable goods through the Internet as distances to markets increase.

E-commerce in agriculture – The case of crop protection product purchases in a discrete choice experiment

“…We therefore cannot reject Hypothesis 2b. This result is in line with the findings of other studies which investigated the effect of experiences on e-commerce or computer adoption behavior (see, for instance Mishra et al, 2009;Mishra and Park, 2005;Shim et al, 2001). Due to the fact that, as of yet, only a small share of German farmers have bought production inputs online (Kleffmann Group, 2016), we suggest that online merchants should implement marketing measures in order to alleviate the initial doubts of inexperienced farmers.…”

“…In line with this, Mishra et al (2009) found that farmers' adoption of the internet is positively affected by off-farm work and, therefore, by farmers' experiences. Taking the aforementioned studies into account, we hypothesize that:…”

“…Against this background, the objective of this paper is to analyze German farmers' preferences for the use of ecommerce for input purchases. Our research contribution is further highlighted by prior studies, which have mentioned that recent literature in the field of internet use by farmers is rather rare (Mishra et al, 2009) and that the vast majority of studies in this field concentrate on US farm businesses (Hennessy et al, 2016). Although Batte and Ernst (2007) delivered first experimental results on US farmers' internet purchasing behavior concerning herbicides and machine parts, their study is now several years old.…”

“…Apart from that, there are also some studies concentrating on the effect of farmers' experiences on computer or internet use. In this case, off-farm work is sometimes used as a proxy for farmers' experiences with computers and the internet (Huffman and Mercier, 1991;Mishra et al 2005;Mishra et al, 2009). For instance, Mishra et al (2005) described that part-time farmers are more likely to use computers and the internet.…”

“…Regarding business purposes in particular, the availability of the internet plays a promising role for farmers (Canavari et al, 2010;Hennessy et al, 2016;Warren, 2004). Farmers can improve farm income and performance by benefiting from the capabilities of the internet (Chang and Just, 2009) in order to reduce transaction costs (Doluschitz, 2002, Hennessy et al, 2016Mishra et al, 2009). In this respect, the internet facilitates acquisition of price and product information and supports interaction with a broader pool of both suppliers and customers (Henderson et al, 2004;Zapata et al, 2016).…”