One thing is certain when it comes to agricultural e-business on the Internet, the companies fighting for their share of farmers' dollars have very different opinions about where that money should be spent.
At a recent meeting of the Mississippi Pest Management Association in Greenville, Miss., four industry members shared often radically different viewpoints about the relatively new business of offering agricultural inputs for sale on the Internet. Offering their take on the risks and rewards of doing business online were representatives from an Internet company, a chemical company, a regulatory agency and a chemical and seed distributor.
Allan Las with FarmSaver.com opened the panel discussion by telling his audience of mostly researchers that his Internet company saved U.S. cotton growers $10 million in pesticide costs last year.
FarmSaver.com, which sells generic pesticide products, bills itself as a direct-to-the-grower, low-price, no-frills way of doing business. “What that means is we don't have a SWAT team on duty 24-hours a day to come inspect your field should a product not perform up to your expectations. But, can we have somebody there in 24 hours? Yes, we can,” Las says.
This policy, he says, rewards growers for what they already know. “Why should growers find expertise hidden in the price of products if they know, or pay a consultant to know, that information? If you know when you will use the product and how you will use the product, why are you paying to be schooled like it was still a patented product?”
FarmSaver.com, according to Las, is not an auction site, or a broker company, or a product liquidator. What it is, he says, is a company formed by “veterans of farming” to manufacture and distribute generic agricultural pesticide products. “We stand behind our products because we make them. We are vertically integrated.
“Plus, there are no secrets on the Internet and product pricing is visible from neighbor to neighbor, across state lines,” he says. “Once a grower knows the price of the chemical he needs, he can then decide which other services are necessary.”
While Las maintains FarmSaver.com can reduce growers' input costs, he does admit that doing business with the online company is not right for everyone. “The FarmSaver.com Website is not for growers who need immediate delivery of a product or credit services. But, we can offer reduced input costs for those growers who plan ahead and can wait three days for product delivery.”
Donnie Taylor with Valent USA takes exception to Las' characterization of FarmSaver.com as a manufacturer of product. He says, “Generic distributors such as FarmSaver haven't spent a penny to defend products like Orthene to the EPA. It's because of Valent that they still even have the generic product to sell.”
Understanding the antagonism between FarmSaver.com and its competitors is as simple as clicking onto the company's Website. Prominently displayed at the top of the FarmSaver.com homepage is a price comparison between Valent USA's Orthene and FarmSaver.com's generic insecticide, Acephate 755P, with cost estimates of $430.40 per case for the brand-name product and $330 per case for the FarmSaver.com's generic equivalent.
Then, underneath this dig at brandname pricing, farmers are asked to “Declare their independence.” Those growers still wondering who they should separate themselves from, need only to continue reading the FarmSaver.com homepage.
The Website says, “A small investment in time will bring you real savings and knowledge about the crop protection industry you can't get elsewhere. Send the message. Who knows? The ag-chem industry might finally catch on.”
In response to FarmSaver.com's claims, Taylor says he prefers facts to fiction.
“The facts are that corn, soybean and cotton producers give the Internet a very low rating. Of the 10 percent of all growers who shop on the Internet, only a small fraction buy agricultural products,” he says. “While the Internet is changing the way information flows, agriculture is still a local, community business.”
Shawn Roberts, marketing manager for interactive technology for Helena Chemical Company, also believes most growers still want to do business with their local retailers. He calls the number of farmers using the Internet insignificant.
“A dealer on the turn-row is the person best able to deliver accurate application and product recommendations to farmers” Robert says. “Access to information is almost as important as price, and service continues to be a major concern of growers.”
What the Internet does offer farmers, Roberts says, is price discovery. “I believe just about every dealer, at some point during the 2000 crop year, was asked by a grower to match product prices found on the Internet.”
Also leading the adoption of e-commerce, he says, is the instant access to information, the ability to compare products and to do business at your convenience, on your computer.
On the other hand, Roberts sees a number of barriers to agricultural e-business. At the top of his list is the lack of service offered by Internet companies. He also sees problems with security, privacy, trust, and access to local product recommendations and information.
“Local dealers offer no-hassle returns, flexible credit terms and immediacy of delivery. And, we give away these services,” he says. “I've heard Internet companies brag about their low $10 delivery fee. We, as local distributors, would love to get a $10 delivery fee, but we've always provided that service to growers for free.”
Harry Fulton, director of pesticide programs for the Mississippi Bureau of Plant Industry at Mississippi State University in Starkville, Miss., agrees the Internet offers both risks and rewards to farmers.
On the plus side, he says, Internet companies may be able to offer products at a lower cost to consumers because there is no middleman involved in the transaction.
However, Fulton says, the possibilities exist for fraud and illegal activity, including unlawful transactions and the misrepresentation of products. “There are some good companies on the Internet, but there are also illegal products readily available to the public that may be coming in from other countries.
Among the e-commerce issues concerning regulators, Fulton says, are:
- The Internet is a free market with very few controls, which may allow online companies to bypass traditional regulatory controls.
- Pesticide products that are legal in one state or country may not be legal in another location.
- It is difficult for regulators to prosecute persons in other states or other countries.
- Restricted-use products could be sold by unlicensed dealers to uncertified applicators.
- There is the potential for products to be misrepresented. There have been instances, Fulton says, where the buyer was shipped something other than what was ordered, or was charged a price that was different than the advertised price.
- Pesticide products could be advertised for non-labeled uses, and non-regulated products that have not been properly tested or scientifically proven could be sold illegally.
- Products could be shipped to agricultural consumers in unsafe containers, or with improper labeling.