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South Korean farmers discover online marketplace

Little has changed in the rice fields of Asia in the past few centuries. Farmers in straw hats still plough the land with water buffalo, plant seedlings by hand and harvest ripe stalks with sharp sickles.

Mechanical ploughs may have replaced some water buffalo but the biggest agricultural revolution in Asia is not taking place in the rice fields. It is in the homes of a new generation of computer-savvy farmers, as comfortable with the sickle as they are with using the Internet to sell their produce.

Just four years ago, Lee Jong-woo was struggling to log onto the Internet. Today, the 48-year-old South Korean farmer and his wife are selling rice via their Web site, www.ssal.co.kr.

Lee, shown on his website smiling in a wide-brimmed farmer's hat, has come a long way with his computer skills, even winning an Agriculture Ministry prize for the best homepage last year.

"I struggled for one week just to log onto the Internet when I prepared the e-business in 1998 because at that time I had no idea about how to use computer," Lee said.

Since he launched the e-business in early 1999, his website has attracted 167,000 clicks and he claims about 5,000 regular clients, offering them top quality rice supplies at 55,000 won (US$43.49) per 20kg bag.

A bag of similar size and quality would cost 60,000 won at a traditional wholesale outlet.

Despite the fact that e-marketplaces have so far failed to meet expectations and replace traditional methods of doing business for most commodities, Lee's online rice business is clearly thriving in one of the world's most wired countries.

Lee's family farm, which he took over when his father fell ill, produces only 80 tonnes of rice per year. But profits have been healthy since he started marketing his crop more efficiently and transparently through the Web, cutting out various middlemen. His net profit in selling "ssal," which means rice in Korean, through the e-market jumped 25 percent to 125 million won (US$98,850) in 1999 from a year earlier.

It is usually cheaper to buy rice directly from farmers than via wholesalers, Lee said, because wholesalers' margins are excluded, although Internet buyers need to pay credit card fees. The Internet sales charge is 13 percent to 15 percent more than the cost of production due to credit card fees, packing and delivery expenses, while the market sales charge is about 20 percent more, Lee said.

But only a few farmers in this country of 46 million people are making profits from e-business.

Most of South Korea's 4.3 million farmers are still selling in time-honoured fashion to traditional outlets, including the government, the National Agricultural Cooperative Federation and individual rice processing centres and wholesalers.

"Only about 3,000 of the total 1.38 million farmhouses are estimated to have built Web sites to sell agricultural products," an agriculture ministry official said.
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