The Effect of ICTs on Agricultural Distribution Channels in a Developing Country (original) (raw)

Globally, traditional family-based production and management is still the main form of agriculture. As with every industry, stakeholders in agriculture need information and, like all decision makers, are information processors with finite capabilities. A farm's capability depends on its typology. Of Mexico's 5.5m farms, only medium-scale and larger producers are likely to have the structured ICT processes and specializations that facilitate efficient identification and management of distribution channels. Every phase in the agricultural business process requires a degree of specialization. Distribution demands market knowledge, entrepreneurial skill, and expertise in negotiation and trading. Improving distribution demands that capital – time and effort – be invested to build knowledge and appropriate networks either directly, through professional managers with a deep knowledge of markets (intermediaries), alongside other farmers in a cooperative or marketplace, or with customers via a collaborative supply chain network. ICTs can establish new links between farmers, markets and end consumers, optimizing distribution channels and reducing transaction costs. Findings suggest that rather than helping producers individually, ICTs are used by the community as a management tool for cooperation by building relationship and through acquisition of knowledge.