An Empirical Study on the Electronic Commerce Practices ...

www.theinternationaljournal.org > RJSSM: Volume: 03, Number: 01, May-2013 36

An Empirical Study on the Electronic Commerce Practices among the Grape

Growers of Coimbatore District in Tamilnadu, India

Poongodi, B., Assistant Professor, KCT Business School, Coimbatore, TamilNadu, India.

Indian Agriculture-An Overview:

Indian agriculture has to become more cost-effective to meet the growing challenges and

opportunities arising out of WTO agreements and the consequent globalization impacts. Development

of infrastructure is essential to support this growth. Agricultural marketing involves in its simplest

form the buying and selling of agricultural produce. This definition of agricultural marketing may be

accepted in olden days, when the village economy was more or less self-sufficient, when the marketing

of agricultural produce presented no difficulty, as the farmer sold his produce directly to the consumer

on a cash or barter basis. But, in modem times, marketing of agricultural produce is different from that

of olden days. In modem marketing, agricultural produce has to undergo a series of transfers or

exchanges from one hand to another before it finally reaches the consumer.

The National Commission on Agriculture defined agricultural marketing as a process which

starts with a decision to produce a saleable farm commodity and it involves all aspects of market

structure of system, both functional and institutional, based on technical and economic considerations

and includes pre and post- harvest operations, assembling, grading, storage, transportation and

distribution. The marketing of agricultural produce has been controlled so strictly and for so long that

it is almost impossible to imagine a free market. Even those who suffer from it otherwise lose no time

in demanding government intervention at the slightest sign of distress.

Electronic commerce

The cutting edge for any business today is electronic commerce (e-commerce). Electronic

commerce is a modern business methodology that addresses the needs of organizations, merchants and

consumers to cut costs while improving the quality of goods and services and increasing the speed of

service delivery. The effects of e-commerce are already appearing in all areas of business, from

customer service to new product design. It facilitates new types of information-based business

processes for reaching and interacting with customers - On-line advertising and marketing, On-line

order taking and On-line customer service to name a few.

Changing Business Environment

The traditional business environment is changing rapidly as customers and businesses seek the

flexibility to change trading partners, platforms, carriers and networks at will. Many companies are

looking outside their organization as well as within when shaping their business strategies. These

activities include establishing private electronic connections to customers, suppliers, distributors,

industry groups and even competitors to increase the efficiency of business communications, to help

expand market share and to maintain long term viability in today’s business environment. The

information super highway will expand this trend to another level all together. The product way of

thinking is succinctly captured in internet artifacts such as the Frequently Asked Questions (FAQs),

which has been very successful. For instance, in www.agriline.com’s FAQ farmers can find valuable

information on various aspects of farm business.

Evolution of E-Agribusiness

The evolution of e-commerce in the agribusiness sector is picking up slowly due to certain

factors such as rate of adoption of internet by producers as well as consumers as a business tool; their

http://www.agriline.com/

www.theinternationaljournal.org > RJSSM: Volume: 03, Number: 01, May-2013 Page 137

scale of operations and the size of the market. Evidence suggests that producers with large-scale

operations are migrating online. This project is a work which has taken in order to verify this with big

farmers of Coimbatore District. Another factor is the magnitude of the benefits accruing to participants

in e-commerce. Although it is probably too early to tell which model will dominate, online companies

have the potential to become vast hubs of economic activity linking the supply chain within a vertical

industry segment and connecting with horizontal supply chains operating across industries. In the

process some of the third party e-agribusiness sites are likely to fail because of strategic and

operational constraints, inefficiencies in operation or shortage of capital. E-commerce is not just

business but more about strategy than technology. The current dot coms could be replaced by business

that have integrated the Internet into their strategy and achieve real financial returns.

It does certainly appear that the foundation “bricks” (traditional agriculture) of agriculture are

beginning to view e-commerce as a business imperative. The traditional agribusiness companies have

strong market share positions as incumbents and some are determined to fight to retain their customers.

After a slow start in the e-commerce arena, there has been a flood of announcements from traditional

agricultural companies regarding the creation or unveiling of B2B strategy. Some companies with

significant market share as buyers are also establishing procurement sites. Live examples that can be

quoted here are the e-choupal of ITC and procurement sites of Cadbury India Ltd.

Kiosks for Farmers

Farmers in developing countries frequently have neither the literacy nor connectivity that

would allow them to benefit from portals. To overcome such obstacles, some projects that have

produced portals are also setting up a kiosk network that provides mediated access to them. Several

such networks like e-Choupal kiosks by ITC Limited that builds an internationally competitive

agriculture business by empowering even the independent small farmer can be found in India. The IT –

enabled Choupals not only provide the farmers with valuable information, but also allow them to sell

their produce directly to ITC, thereby eliminating the middleman and bringing higher profits to both

ITC and farmers. EID Parry, an agro-company in the southern Indian state of TamilNadu, has set up a

network of ‘Parry’s Corners’ through which famers can access its Indiagriline portal. The concept of

“Digital Mandi” has also been growing. Its an Electronic Trading Platform for Agro Commodities. It is

developed as an application for the Infothela. Digital Mandi is inspired by the vision of Media Labs

Asia sustainable village through culturally appropriate use of new technologies. For technology to be

important, it should transcend into livelihood of people.

Ikisan

Ikisan is a comprehensive Agri Portal addressing the Information, Knowledge and Business

requirements of various players in the Agri arena viz., Farmers, Trade channel partners and Agri Input

/ Output companies. Leveraging Information Technology and extensive field presence, Ikisan is

positioned as an Information / Knowledge exchange.

Research Design:

The research study is descriptive in nature and conducted systematically to gain insights into

the impact made by e-commerce on agriculture. The intention of the study is to identify whether the

farming community needs more awareness on electronic facilities available for them and to

recommend the same to State Agriculture Ministry. A careful approach is followed to make the study

more precise and scientific. Appropriate variables were identified through the review of literature.

Data was collected from a known population of Grape Growers from Thondamuthur Block of

Coimbatore District in Tamil Nadu.


Research Question:

Is there any impact made by e-commerce on the grape growing community in Coimbatore

District?

Population & Sample:

Universe or the population consists of all who cultivate grapes in Thondamuthur Block of

Coimbatore District. The entire population is only 120 farmers. Out of the 120 farmers one fourth was

taken as sample for the research study. A Systematic random sampling was done by selecting the

sampling element at evenly spaced intervals. It is decided to take a sample of 30 individual grape

farmers.

Sample size = 120 / 30 = 4. From list numbers 1 to 120, chose a number 2 at random which is

between 1 and 10. Then the sample enrolment numbers started from 2, 6, 10, . . . , 118.

The Questionnaire and Collection of Data

The Questionnaire was given so much care while constructing as it is meant for the farming

community. Questions are made so simple so that it is easily understood by all. It initially has very

many questions which after the pilot study are consolidated into a core schedule. Every fourth member

in the list provided by the Grape Growers Association of Thondamuthur was surveyed in an

association meeting held on a Sunday. Some of them who did not turn for the meeting were met in

their place to do the research survey. So the data that was used for the research work is purely a

primary data.

Analysis and Discussion:

Table No.1: LITERACY LEVEL:

QUALIFICATION No. Percent

SSLC 13 43.3

College 17 56.7

Total 30 100.0

All the farmers in this region of Thondamuthur block growing grapes are literate. The entire universe

is divided almost equally half with SSLC/HSC qualification and Degree qualification. The so called

progressive farmers are called so because they are all literate. Apart from the survey and the analysis,

it is apt to tell here that other farmers involved in cultivating agricultural crops are not fully literate.


Table No. : 2: BROWSING ACTIVITY

PARTICULARS No. Percent

No 11 36.7

Yes 19 63.3

Total 30 100.0

From the above table on ‘Browsing Activity’ we can infer that majority of the crowd browses.

SSLC

College

Total

No.

Percent

0

10

20

30

40

50

60

70

80

90

100

EDUCATION

NOS.

CHART 1 - LITERACY LEVEL

No.

Percent


Table no. 3: FREQUENCY OF BROWSING AGRI-PORTALS

FREQUENCY No. Percent

Very frequently 5 16.7

Frequently 9 30.0

Rarely 5 16.7

Never 11 36.7

Total 30 100.0

Half of the population does browsing for their occupation and they do search for agriculture related

information. Nearly one fourth does not go the e-way to search for agriculture related information.

0

10

20

30

40

50

60

70

NOS & PERCENTAGE

No Yes RESPONSE

CHART NO. - 2 - BROWSING ACTIVITIES

NUMBERS

PERCENTAGE


Table No.4: FREQUENCY OF BROWSING AGRI. PORTALS

FREQUENCY No. Percent

Daily 5 16.7

Weekly once 9 30.0

Only if opportunity 5 16.7

Not at all 11 36.7

Total 30 100.0

From the above table no.15 it can be inferred that 16% of the population browses agri portals only if

there is an opportunity available for them. Meaning that they do not have a specific need for browsing

and they do not go in search of the website. Instead, they do only there is a chance available for them.

This question was actually intended to know whether that “rarely” or “sometimes” category in table

no. 13 intentionally seeks for agri related information on the web. When linking the data of table no.13

and 15 it can be approximated that 16.7% of them intentionally do not seek for information.

Table No. 5: PURPOSE OF BROWSING

Browsing Purpose No. Percent

General information 1 3.3

Agri related information 18 60.0

Do not browse 11 36.7

Total 30 100.0

From the above table it is clear that at least 60%of the grape growers use the website to get agriculture

related information. It is only a meager of 3.3% of the population who go for general information.

Grapes are not only grown for direct consumption as fruits but also serves as the raw base for wine

industry. That way, grapes has a very wide market and the income from grape cultivation is been

always high. Hence, seeking for its related information on the web is also found very common.

CHART NO.3 - FREQUENCY OF BROWSING AGRI PORTALS

17%

30%

17%

36%

Very frequently

Frequently

Rarely

Never


Table No.6. E-agri business involves complex procedure

Response No. Percent

Agree 30 100.0

All the farmers agree that doing farm business by the electronic way involves a complex procedure.

From this it can be inferred that they have not yet started doing their business by e-commerce.

Table No.7 E-Agri business does not serve community


Neither agree nor disagree 30 100.0

From the above table no. 19 it can be inferred that these farmers are in a dilemma state that whether e-

commerce serve the farming community or not. This can also be interpreted that they are all in

transition phase from the conventional type of agri-business to e-agri business.

Table No.8 E-agri business support traditional farming business.


Agree 30 100.0

All the farmers have agreed that agri business in the e-way supports the traditional farming. When the

data of Table no: 19 is viewed in a combined manner with the data of Table no. 20, farmers have

opinion that traditional farming business cannot be fully replaced by E-agri business.

CHART NO.5 - PURPOSE OF BROWSING

3%

60%

37%

General information

Agri related information

Do not browse


Table no.:9 E-agri business is only for export produces


Agree 11 36.7

Disagree 19 63.3

Total 30 100.0

It is understood from the above table that majority of the grape growers in Coimbatore

disagrees that E-agri business is meant only for export produces. They got an understanding the e-

commerce platform can be used for any type of products right from FMCG to consumer goods to all

kinds of commodities and horticulture products. This was found when the interview was made with

them. It is a general feeling of the small farmers holding less than 2.5 acres and growing agricultural

crops that e-commerce and internet are only meant for hi-tech farmers.

Table No. 10: RELATIONSHIP BETWEEN EDUCATIONAL STATUS AND BIG

FARMERS.

PARTICULARS

E-agri business I only for big farmers TOTAL

Agree Disagree No. %

No. % No. %

Educational Status SSLC 8 61.5 5 38.5 13 100.0

College 10 58.8 7 41.2 17 100.0

TOTAL 18 60.0 12 40.0 30 100.0

Chi-Square Tests

Response Value df Sig.

Chi-Square .023 1 Ns

CHART NO.9 - E-COMMERCE IS FOR EXPORT PRODUCES

0

20

40

60

80

100

120

Agree Disagree Total RESPONSE

RESPONDANTS

No. Percent


The Chi-square test is made to know the significance between two factors that is educational

status and E-agri business is only for big farmers. The table value at 5% significance level for

df=1 is 3.841 and the calculated value for that is 0.023. The calculated value is less than the

table value, which implies that it is not significant.

INFERENCE:

So it can be vividly said that educational status factor does not affect e-agri in any way the

Educational Status and Big Farmers.

Table No. 11: RELATIONSHIP BETWEEN EDUCATIONAL STATUS AND E-

AGRI BUSINESS IS ONLY FOR EXPORT PRODUCERS.

E-agri busines is only for export produces TOTAL


No. % No. %


College 8 47.1 9 52.9 17 100.0

TOTAL 11 36.7 19 63.3 30 100.0

Null Hypothesis:

The assumption is that there is significant relationship between the educational status and e-agri

business is only for export produces.

CHI – SQUARE TEST:

Value df Sig.


The calculated value of chi-square 0.938 and is less than the table value of 3.841 for degrees of

freedom 1.

INFERENCE:

Hence it is concluded that there is no significant relationship between the two factors “Educational

Status” and “E-agri business is only for big farmers”.

TABLE NO.12: RELATIONSHIP BETWEEN “EDUCATIONAL STATUS” AND “E-AGRI

BUSINESS IS FOR LEARNED FARMER”

PARTICULARS

E-agri business is only for the learned farmer TOTAL

Agree Strongly disagree No. %

No. % No. %


College 3 17.6 14 82.4 17 100.0

TOTAL 9 30.0 21 70.0 30 100.0

HYPOTHESIS:

The Chi-square test is made to know the significance between two factors that is educational

status and E-agri business is only for learned farmers.

CHI-SQUARE TEST:

Value df Sig.

Chi-Square 1.655 1 Ns


The table value at 5% significance level for df=1 is 3.841 and the calculated value for that is

0.023. The calculated value is less than the table value, which implies that it is not significant.

INFERENCE:

So it can be vividly said that educational status factor does not affect e-agri in any way the

Educational Status and Big Farmers.

Table No.13: RELATIONSHIP BETWEEN “EDUCATIONAL STATUS” AND

“FARMER SHOULD HAVE INNOVATIVE IDEAS”

Farmer should have innovative ideas TOTAL

Strongly

disagree

Agree Neither agree nor

disagree

No. %

No. % No. % No. %

Educational

Status

SSLC 6 46.2 7 53.8 13 100.0

College 6 35.3 7 41.2 4 23.5 17 100.0

TOTAL 12 40.0 14 46.7 4 13.3 30 100.0

HYPOTHESIS:

It is assumed that there is a significant relationship between these two factors, “educational status”

and “Farmers should have innovative ideas”.

CHI-SQUARE TEST:

Value df Sig.

Chi-Square 1.655 1 Ns


1.655. The calculated value is less than the table value, which implies that there is no significant

relationship between these two factors.

INFERENCE:

So it can be vividly said that there is no significant relationship between these two factors.

TABLE NO.31:

RELATIONSHIP BETWEEN BROWSING ACTIVITY AND BIG FARMERS

PARTICULARS

E-agri business I only far big farmers TOTAL


No. % No. %

Do you browse No 7 63.6 4 36.4 11 100.0

Yes 11 57.9 8 42.1 19 100.0

TOTAL 18 60.0 12 40.0 30 100.0

Chi-Square Tests

HYPOTHESIS:

It is assumed that there is a significant relationship between these two factors, “Browsing Activity”

and “e-agri business only for big farmer’s opinion”.


CHI-SQUARE TEST:

Value df Sig.



0.096. The calculated value is less than the table value, which implies that there is no significant

relationship between these two factors.

INFERENCE:

So it can be clearly depicted that there is no significant relationship between the browsing activity and

the opinion the e-agribusiness is only for big farmers.

MAJOR FINDINGS

1. The grape growers in Thondamuthur block have taken farming alone as their main occupation and

they do not have any other business or work for other income. Most of the grape cultivators fall

under big farmer’s category.

2. From this it is evident that 83% of the farmers are quite comfortable with English language. One

third of this farming population is information savvy and they want to update themselves with

current news.

3. Majority of the grape cultivators do browsing. Half of the population does browsing for their

occupation and they do search for agriculture related information. Nearly one fourth does not go

the e-way to search for agriculture related information.

4. Nearly one sixth of the population browses agriculture related portals only if there is an

opportunity available for them. Meaning that they do not have a specific need for browsing and

they do not go in search of the website. Instead, they do only there is a chance available for them.

5. At least 60%of the grape growers use the website to get agriculture related information. It is only a

meager of 3.3% of the population who seek for general information.

6. All the farmers agree that doing farm business by the electronic way involves a complex

procedure.

7. All the farmers have agreed that agri business in the e-way supports the traditional farming.

8. Farmers have a opinion that e-agri business will rule agricultural business in future. And they

accept that E-commerce is one of the best ways to do business. So this lot of farmers will

definitely use e-commerce as their platform to do business if there was given all the opportunities.

9. Three fifth of the population feels that the e-agri business is only for big farmers. This

may be due to the cost involved in going for E-commerce.

10. Majority of the grape growers in Coimbatore disagrees that E-agri business is meant only

for export produces. They got an understanding the e-commerce platform can be used for any

type of products

11. There is no significant relationship between the two factors “Educational Status” and “E-agri

business is only for big farmers”; the browsing activity and the opinion the e-agribusiness is only

for export produces; the browsing activity and the opinion the e-agribusiness is only for learned

farmers.

12. There is no significant difference between the sample mean and the population mean with respect

to the educational status factor.

13. There is no significant difference between the sample mean and the population mean with respect

to the Browsing activity factor.

SUGGESTIONS

As the grape growers of this region are strongly bound to their association they can represent their

need and requirements to set up a information kiosk for them

They can have their own browsing centre and allow the farmers to browse at concession rates

The association can make a commercial website to gain international markets


A very meager portion who says that they do not go know on e-agribusiness can also be educated

on the importance of the same.

Selected References :

1. DunnandBradstreet .´SmallBusinessSurvey.vMay2000.http://www.dnb.com

2. Ehmke,C.,S.ErnstandL.Tweeten.´E – Commerce and Information Technology Use

in Agribusiness.vUnpublishedreport.October2000.

3. Ernst,S. and M.Tucker. “Perceptions and Adoption of Information Technologies:

Implications for Ohio`s Produce Industry in the NewEconomy.” AcceptedPaper:

International Meeting of Agricultural Communicators in Education, Toronto,

Canada. July2001.

4. Gillan M. Craig, “Information available on UK agricultural web sites”, As lib

Proceedings, 1999, Vol.51, Iss:5.

5. Henderson,J., F.Dooley and J.Akridge. “Adoption of E -Commerce Strategies for

Agribusiness Firms. Selected paper for the American Agricultural Economics

Association Annual Meeting, 30 July to 1 August2000, Tampa,Florida .

6. Hooker,N.H., J .HeiligandS.Ernst. “What is Unique About E -Agribusiness?”

Accepted Paper: IAMA World Food and Agribusiness Symposium. Sydney,

Australia. June2001.

7. Krishna Reddy P. and R. Ankaiah, A framework of Information Technology -

based agriculture information dissemination system to improve crop productivity,

Current Science, Vol.88, Iss No:12, 2005.

8. Laudon K.C., and J.P. Laudon, 2002, Management Information Systems:

Managing the Digital .

9. Mittal S.C., Information Technology Agriculture, General Ma nager, Management

Services Division, Indian Farmers, Fertilizers Co -operative Limited, New Delhi.

10.National Symposium on Electronic Marketing of Agricultural Commodities,

Proceedings. MP – 1463. Texas Agricultural Experiment Station. March, 1980.

11.Oduwole A.A., “Impact of internet use on Agricultural Research Outputs in

Nigerial Universities of Agriculture”, Library Hi Tech News, 2004,Vol.21, Iss:6.

12.Peura, Gerard McElwee, The split entrepreneurial identity of the farmer, Journal

of small Business and Enterpri se Development, Vol 14, Issue1, 2007.

13.Prasad GNR. and et.al ., A study on various expert systems in Agriculture,

Georgion Electronic Scientific Journal, Computer Science and

Telecommunications 4(11), 2006.

14.Suri P.K. & Sushil , Towards a Strategy for e -governance in Agriculture Sector -

exploring the continuity and change force, Computer Society of India, Adopting

E-governance.

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