E-Business in Agribusiness: Investigating the E-Readiness of Australian Horticulture Firms

Introduction

The volume and value of transactions on the Internet are still on the rise and are predicted to continue unabated for the foreseeable future. Likewise, national and international institutions are investing in policy and regulatory frameworks as well as infrastructure and services to facilitate the conduct of e-business (UNCTAD, 2010). The World Economic Forum monitors and reports the progress of nations in terms of their conducive environment for e-business, and citizens’, governments’ and businesses’ preparation to and actual use of e-business (Dutta & Mia, 2010). However, the adoption and infusion of e-business into the different sectors of an economy and among different countries remain uneven.

Particularly, the use of e-business by primary industries is an area that is largely under-researched (Bryceson, 2006; European Commission, 2008; Ng, 2005). One of these primary industries is Horticulture. Horticulture comprises fruits, vegetables, nuts, nursery, extractive crops, cut flowers and turf growing. In addition to growers, the horticulture supply chain includes production, harvesting, post-harvest, logistics and marketing service providers and industry associations. In Australia, horticulture is an AU$ 9 billion industry, with an export value of more than 800 million, comprising 30,000 enterprises and employing more than 80,000 people (Horticulture Associated Limited, 2009). Horticulture in Australia is the second-largest and fastest growing industry in Agriculture. In social terms, the industry forms the livelihood of many communities and economies in rural and regional Australia. Australia considers the application of digital technologies to enhance the competitiveness of agriculture as a key national priority.

Past innovations in transport communication technologies such as the telegraph and telephone have had significant impacts on the conduct of agribusiness. For example, the meteoric rise of the European trading houses and the Chicago commodity exchange has been partly attributed to the telegraph technology (Clasen & Muller, 2006). Agriculture is also one of the early adopters of electronic trading (such as the Egg Clearing House and the electronic cotton trading mechanism) long before the Internet (Montealegre et al., 2004). Applications of Internet and mobile based decision support systems in the production end of the agribusiness value chain are pervasive (Antonopoulou et al., 2009; Wang et al., 2006). Nevertheless, some reports consider agribusiness as an inefficient industry (Clasen & Muller, 2006). The industry is largely comprised of small farmers. Most have been characterized by investing more on the production end and less on the marketing and distribution end of the agribusiness supply chain (Taragola, 2010; Xiaoping et al., 2009; Samuel et al., 1996). The majority tend to work in the business rather than on the business. Because of uneven adoption of technologies along the supply chain, transaction costs tend to be higher (Mueller, 2001).