E-commerce in the Czech Agriculture

Transcription

1 E-commerce in the Czech Agriculture Dr.Jiřina Šlaisová, Dr. František Vaníček Research Institute of Agricultural Economics, Manesova 75, Prague 2, Czech Republic Phone: Fax: slaisova@vuze.cz, Abstract: Actually, e-business in the Czech Republic expands quickly but in the comparison with other countries, mainly with the USA, there are still some lacks. The obstacles of faster expansion of e- business are general public ignorance for new information technologies and also fear and doubts from their irresponsibility. The e-business is possible to open also for agriculture and forestry. This means the use of e-business net exploitation concentrated on final Czech or foreign client (B2C), or concentrated on Czech and foreign commercial partners - Contractual commerce for businessman (B2B), which appears as more perspective form of business. The paper gives detailed introduction about the development of e-commerce in Czech Republic and predicts that e - commerce in the Czech Republic in near future will play an important role by affecting the competitiveness among the companies. The important positive element for on-line business will be the possibility and facilitation of the choice of ways and conditions for agricultural commodities purchase/sell. Other positive side of e-commerce in the Agribusiness is possible influencing of the competitiveness and efficiency of total agro - food chain supply. Keywords: Czech; E-commerce; agriculture; agribusiness 1 E - business in the Czech Republic E - business in the Czech Republic expands quickly but the main obstacles for faster expansion can be seen in limited access to Internet. In the Czech Republic at about 20 % of households have currently access to Internet. The European Union decided, that by the reason of Internet expansion, all schools would be attached to Internet till In the Czech Republic there are high number of schools attached to Internet but we cannot speak about large expandability. According to the agency GfK Group the next important reason of limited business by means of Internet are doubts, no-confidence and inexperience. The obstacles of faster expansion of e-business are general public ignorance for new information technologies and also fear and doubts from their irresponsibility. Figure 1: Obstacles of electronic business development L ack of capital 33 Insufficient safety 29 Unprepared business partners 22 Unqualifie d u s e r s in c o m p a ny 17 It is not im portant for com pany m anagem ent 9 U navaila b ility o f c o r re s ponding technologies 7 Low return on investm ent Note: Mentioned percentuel results are related to the companies attached to Internet There are expected that till 2005 the worldwide number of Internet users will increase from 200 million to 1 milliard. According to the Andersen consulting study the main impulse for introduction of electronic business becomes a fear of competition. Electronic support of sale and marketing use 72% of the (%) 559

2 European companies, purchase and sell by means of Internet realize 47% of companies. 80% from 100 companies indicate, that they plan another using of new business opportunities by means of Internet and 72% of addressed companies avow, that they have created concrete strategy. Situation in the CR is different first of all because the electronic business is a new matter in our country. Nevertheless, in the CR were recorded similar trends as in Europe: 7 of addressed companies find in e-business competitive advantage, 81% find improving of consumer services. According to the survey of Agency Taylor Nelson Sofres Interactive, in spring 2000, 14% of Czech users ordered service or goods via Internet. This placed the Czech Republic on 8 th position in the competition of 27 th European, Asian and North American countries. The most requested merchandises were books, music records, computers and electronics. The existence of three big portals in the Czech Republic (Seznam, Atlas, Centrum) appears to be ideal for the Czech market, which is similar also with providers of other service. Considering the actual export problems, the possibility of e-business seems to be high perspective. By the medium of foreign advertising agencies, the placement of advertising strip (banner) of a businessman would be ensured in different countries of the world. Evidently, the advertising would be mostly in the Russian federation, Ukraine, Germany but also in Israel and in the countries of Persian Bay. After the creation of own Web side the seller/buyer will be enlisted to the most important 400 international locators (Yahoo, Altavista, etc.) and to above mentioned Czech locators (Seznam, etc). At the same time their Web side will be registered in all B2B international portals or in portals of the countries where the seller/buyer has own business interest. Figure 2: Branch structure of enterprises Note: Mentioned percentuel results are related to the companies attached to Internet Food industry 9% Engineering industry 20% Tim ber and paper industry G lass and ceram ic industry 4% M ining, m ineral and ore processing 1% Transport, c o m m unications 7% 9% 20% Services 4% M etallurgy, processing of m etals Building industry 10% Textile, clothing and leather industry Electrical industry 10% 4% 1% 4% Energetics B u s iness Chem ical and pharm aceut. industry O thers 7% 2 Appropriated Czech Law At the beginning of the year 2002, the Czech government ratified the Green Book about electronic business and proposal of basic measures. Processing of strategic document should follow, so called the White Book, which should contain concrete procedures for individual sectors. It should lead to removing barriers of e - business development in the CR. Program activities of the Green Book found the equal conditions for international co-operation with business partners within whole Europe. Proposals contained in the Green Book also enable to co-ordinate and round off the program approach of given problematic. The program activity included in Green book about electronic business is not connected only with the Czech Republic. Our economic and politic stability is based on Europe, our future domiciliary market. We need to cooperate with the European partners and to create equivalent conditions around all Europe where the companies could freely compete, develop and exploit the new technologies and to offer stable working opportunities. Our aim has to be the equilibrium between the Czech private sector and our competitors not only in sense of productivity, but also in ability to produce innovated products and to create value added services. 560

3 The government goal is help for further development in framework of his competence and sources that are available. The suggestions involved in Green book amend the Proposals of measures under Government Decree No. 56/2000 Coll. These rules create in mutual synergy the coordinated and complex approach to complete problematic. Czech Republic has to be competitive country and base for effective private sector. Green book describes by which means could be done these obligations and underlines the close cooperation between public administration and private sector with respecting their opinion and responding to the needs and requirements of entrepreneur subjects. Government appeals to the private sector for active sharing by means of own accepted recommendations Close cooperation between these two elements of national economy could create better conditions for future of the Czech republic with stable economic conditions and introduce the regular and sustainable rate of growth. 3 Center for Electronic Business The Center for Electronic Business (CEB), which was founded in the Czech Republic in 1998, analyses the evolution of Internet and coherent markets in the Czech Republic. One of the priorities of CEB is to analyze and support development of Internet and corresponding markets in the CR and to bring comparable information from abroad. Corresponding is also the emphasis on education in the field of e-commerce, global information nets and wider context of information companies development. CEB participates on issuing Virtual Information Park, that is information service focused on Internet strategies, E-commerce and virtual education. For its partners it provides closed electronic conference VIP Forum. In co-operation with the FEMIRC-CZ center the CEB helps to provide consult aid for Czech subjects with interest in projects in the field of Electronic Commerce and new methods of Work and Multimedia tools and content 5th Framework Program of the European Union. 4 Electronic signature In July 2000, the Czech parliament accepted the Law of electronic signature, which modifies its use, administration of coherent services, controls and sanctions for delinquency. The law also defines using and controlling of electronic signatures and guaranteed electronic signatures as the instruments that enable using electronic documents (data reports) in the way that is conformable with generally binding legal norms. First version of the law about electronic signature came in force on the 1 st of October 2000 but it was only basic (general) legal adjustment of whole problematic. Essential executive decree for practical using was missing. In the spring 2002 the office for personal data protection that is delegated for its releasing has pronounced that the update version is finished and there leave only two stages for full using of electronic signature. In the March 2002 the first accreditation was given to certificate authorities that can work as an accredited person. The communication with state administration can be done only by means of this accredited person. Second group of authorities so called non - accredited person can work only for private sphere. It means that they are not obliged to certificate the use of electronic signature in relation to state administration. 5 E - business in agriculture The e-business is possible to opened also for agriculture and forestry. This means the use of e- business net exploitation concentrated on final Czech or foreign client (B2C), or concentrated on Czech and foreign commercial partners - Contractual commerce for businessman (B2B), which appears as more perspective form of business. At the present time, the Czech agrarian trade is realized mostly in the form of direct relations between suppliers and consumers. Only small part of trade is executed by commodity exchange. Crop Exchange Brno was indefinitely founded on 8 th of December 1992 with the possibility to make a spot exchange businesses, futures, option and subsidiary-business, (insurance, transport etc). The effort for providing materialization of market with agricultural commodities by means of supply and demand concentration to one place was the main reason and sense of founding. Existence of exchange should have destroyed a regional differentiation in supply and demand, to stabilize prices, to provide the information for public about situation on the market and price level of the individual commodities. 561

4 Moravskoslezská Commodity Exchange was opened on 9 th of February It is directed by Exchange Chamber with state control that is guarantee of reliable and secure business relations. It offers complex service, pertinent to traded commodities, including professional, theoretic and practical preparation of stockbrokers, members of exchange. Exchange offers regular using of actual information about development of supply and demand on the exchange market by means of exchange information system that is available for 24 hours daily on Internet. Business Exchange Hradec Králové was founded in The main activity is organization of market with agricultural products. Subject of exchange business are products of vegetable and animal production, created by their processing, as well as products used in context of their production, moving, processing or selling. On exchange there is possible to make a spot business, futures, option and subsidiary businesses (especially insurance, transport, forwarding and storing). Karlovarská Commodity Exchange was founded on 23 rd of July The subjects of exchange businesses are also products of vegetable and animal production. Intensity of business with cereals on exchanges did not discharge the expectation. Part of businesses in the CR is influenced by intervention purchases SAIF (State Agricultural Intervention Fund), part is made between producers and processors directly. Advance payment financing that is used by basic producers and some companies (ZZN, Tchecomalt group), also influences business. Using possibility of e-business is nowadays very sporadic and without any guaranties not only on the field of agricultural business but also on the field of other sectors. It is meanwhile realized out of crop exchanges. Other important part of e-business for agribusiness is the possibility of seller/buyer connection on consulting centers specialized on: Improvement of strategy, technology, finance and research for agribusiness, Technical assistance for international development in agriculture, infrastructure and institutional development, Specializing in commercial applications of agricultural and food technology Consulting and solutions for agribusiness Market research and information technologies firm which specializes in agribusiness development Consulting concerning an emerging markets (India, Asia, Russia, Africa). 6 Internet and agribusiness At the beginning of 2001, the new project Agroobchod was introduced within new Czech Internet portal Agroweb. This project concentrates supply and demand on agricultural commodities and techniques in one informatics source what has an important impact for creating market price. Agroobchod is founded on the principal of free of charge line advertising. Each advertisement in Agroobchod is also published in the professional press. The aim of Agroobchod is to provide immediate information and to serve as an extensive professional databank. This enables to all visitors free of charge and very easy access for making business. Since August 2001 first Czech electronic auction for agricultural commodities has been operated by company Top AGRO Management. The main sense and aim of the electronic auction is to find concrete subject for buying of auctioned commodity by means very transparent, legal, ensuring the same right and opportunities for all participants of auction, which is farmer, processor or businessman. This Internet auction is public for legal and natural persons. 7 Conclusion How should we see the future of trade in the Czech agribusiness? On line B2B trading is predicted to be the largest and most profitable area of commercial activity on e-commerce in Czech agribusiness. We suppose that e - commerce in the Czech Republic in near future will play an important role by affecting the competitiveness among the companies. We can separate two main pages of e-commerce that means trading of inputs and trading of agricultural commodities. On line trading of inputs has to improve the efficiencies of primary producers due to group of farmers together and enjoy greater saving on freight. 562

5 On side of sellers the on-line trading give possibility to reduce idle inventory by making many potential customers available. There could create pricing, sourcing and liquidation strategies that can make their business more competitive. The important positive element for on-line business will be the possibility and facilitation of the choice of way and conditions for agricultural commodities purchase/sell. It means the possibility to conclude a business with fixed price, named price or forward auction. Exactly same conditions and successive steps are valid for individual types of business. Other positive side of E-commerce in the Agribusiness is possible influencing of the competitiveness and efficiency of total agro - food chain supply. References: 1 Green book about e-business VIP Direct, E-newsletter, Law No. 227/2000 Coll. 3 Web side Agroweb and Top Agro 4 Sine (2000): E-business is necessity for companies, Hospodářské noviny, Remr, J.,(2000): Trends of e-business in the Czech Republic. ComNet Prague