Technology and Infrastructure Considerations for E-Commerce in Chinese Agriculture

Abstract

Information technology (IT) was one of the most intensively studied and extensively applied technologies in the 20th century and its research and application will be even more accelerated in the 21st century. The impact of IT is more far-reaching than any one may have had imagined, encompassing all facets and sectors of society. Economically, e-commerce generated more than $1.5 trillion in the US in 2004 and is projected to be 30, 15 and 2.6% of the total manufacturing, whole sales and retail sales in the US in 2006 respectively. IT research in agriculture has so far been particularly applied to such fields as precision farming and bioinformatics and in extension and farming practices. As such, its potential application in agricultural e-commerce has only begun to be explored. The United States Department of Agriculture has identified four different functions that e-commerce firms perform in the agricultural sector. They are: (1) information distribution, (2) input supply, (3) commodity trading floor, and (4) logistics/supply chain management. Unlike other industrial products, agricultural products are much more diverse and difficult to process and handle. For instance, fruits and vegetables are perishable and have to reach the market and the hands of consumers within a short period of time. One of the problems for IT applications in agriculture is the lack of standard measures in characteristics and quality of perishable produce and processing foods. Standards are pre-requisites for effective IT application and e-commerce. According to the Global Commerce Initiative, standards bring scalability, portability and affordability to the business process. Standards speed up the supply chain and reduce errors and protect technology investments and ensure system to system interaction and interoperability. Because the complexity of issues involved in standardization, the process of standardization must involve the input and discussion from all segments of the society. Being the largest agricultural country in the world and one of the most active trading partners in the international market, China must also be involved in determining the standards for both domestic and international trades. These measures are the necessary foundations for e-commerce in agriculture. In this paper, we provide a review of the technological development of standardization and coding that are prerequisites for IT application in e-commerce. This understanding is important for professionals in China to promote e-commerce in agriculture. Finally, we propose that a national committee to be formed in China, which includes IT experts from private sectors, academic professionals and governmental officials. This committee should consider the progress being made elsewhere in the world, the unique properties of Chinese commodities and appropriate business models to determine a set of standard measures that are transportable and communicable digitally in the world market for China's e-commerce in agriculture.