Source: SOUTH CAROLINA STATE UNIVERSITY submitted to NRP
BUILDING DIGITAL CAPACITY: AN INTEGRATED APPROACH TO BUILDING DIGITAL COMMERCE CAPABILITIES OF SMALL AGRICULTURAL PRODUCERS IN SOUTH CAROLINA.
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
ACTIVE
Funding Source
Reporting Frequency
Annual
Accession No.
1031995
Grant No.
2024-38821-42116
Cumulative Award Amt.
$585,402.00
Proposal No.
2023-09232
Multistate No.
(N/A)
Project Start Date
Sep 1, 2024
Project End Date
Aug 31, 2027
Grant Year
2024
Program Code
[EWE]- Extension Project
Recipient Organization
SOUTH CAROLINA STATE UNIVERSITY
(N/A)
ORANGEBURG,SC 29117
Performing Department
Business Administration
Non Technical Summary
The project's core objective is to develop and implement an integrated teaching, research, and extension model. Its primary focus is on bolstering the Digital Commerce capabilities of small farm-based businesses in South Carolina and enhancing their participation in the online marketplace. This strategic approach is crucial as it directly addresses the challenges faced by small farm-based businesses in South Carolina, particularly in the context of the state's leading industry, agribusiness, which is a key driver of rural development and growth. It's worth noting that approximately 95% of the 25,000 farms in South Carolina are family-owned, with about half of them being small farms of less than fifty acres in size.Despite consistent growth in the agribusiness sector, small farms and farm-related businesses in South Carolina are facing increased pressures to remain viable and profitable in today's dynamic and technologically advanced business environment. One of the main challenges for small farms is consistently finding customers for their products through the right marketing channels and successfully selling their products. Unlike big farms that traditionally sell through wholesalers, small farms rely on direct marketing channels (DTC) such as Farmer's Markets, On Farm Sales, Community Supported Agriculture (CSA), and online sales to maximize revenue by omitting the middlemen. The rise in interest and demand for local produce and food products also favors direct-to-consumer marketing.Regardless of the choice of DTC format, some level of online presence is necessary for the viability of any business in the current market environment. Consumers increasingly use online platforms to begin their search, evaluate offerings, and make purchase decisions. Food and beverage sales in the U.S. totaled almost $ 24 billion in 2020 and are expected to reach $38 billion in 2023. It is estimated that approximately 55% of consumers will buy their groceries using online channels by the end of 2024. Consequently, farmers have also increased their internet usage for sales and marketing. Data from the U.S. Department of Agriculture (USDA)'s Local Food Marketing Practice Survey found that direct-to-consumer online sales in 2020 accounted for 10.4%, an increase from the 8% level in 2015. The COVID-19 pandemic has also highlighted the advantages of online marketing for all business types.The ability to leverage technology across activities ranging from production to final sale is becoming increasingly important for a profitable and sustainable enterprise. This is particularly true for small farmers, especially those located in rural areas. By leveraging technology, these farmers can increase the visibility of their offerings, connect with customers, and market their products to a wider audience. The increased Federal and State investment in bringing high-speed internet to rural South Carolina further reduces the barriers to the adoption of online marketing by farmers in the State, thereby enhancing their digital commerce capabilities.It is proposed that a lack of appropriate technological knowledge and skills and the affordability of professional assistance have greatly influenced small farmers' adoption of online marketing and sales, consequently hindering their ability to harness the power of electronic marketplaces. This project aims to improve the sales and profitability of small farm-based businesses in South Carolina by increasing farm owners' adoption of digital commerce practices. This will be accomplished by (1) conducting research to identify issues encountered by small farm-based businesses when adopting and utilizing online marketing and sales platforms (2) creating an Agribusiness Digital Commerce Center to recruit, train, mentor, and encourage farmers to market and sell directly to customers using the internet and (3) developing and implementing a new course in Agribusiness Digital Marketing and E-Commerce to train the next generation of agribusiness leaders in the use of digital commerce technologies.
Animal Health Component
40%
Research Effort Categories
Basic
0%
Applied
40%
Developmental
60%
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60460303030100%
Goals / Objectives
The overall research goal is to improve small farms' profitability by increasingtheir participation in the online marketplace. It is proposed that the low adoption of the internet as a marketing and sales tool is due to (1) a lack of technological skills, i.e., farmer's inability to effectively navigate online platforms, and 2) an inability to marketing skills required on online platforms i.e., the inability of a farmer to create and execute a winning online market strategy. Therefore, it is proposed that farmers build competencies in online marketing and technology to become successful online sellers.Therefore the major goals of the project are to :Investigate and understand factors specific to South Carolina's small farms that deter them from adopting and efficiently using digital commerce to market and sell their products.Design and develop training programs for small farm operators to reduce barriers to digital commerce adoption.Train and assist farmers in utilizing digital commerce tools for marketing products and services.Develop and offer a college course in Digital Commerce to imbibe digital marketing skills in the next generation of agribusiness entrepreneurs.
Project Methods
The plan of operation and methodology for the project objectives are as follows:Objective 1- Identify the factors affecting digital commerce adoption by small farms in South Carolina.In collaboration with SC State 1890 Extension and Clemson Extension program, four focus groups with small farm operators representing the four regions (Upstate, PeeDee, Midlands, and Lowcountry) will be conducted to collect exploratory data related to awareness level, adoption issues, and competencies issues related to digital commerce. Based on the review of relevant literature and exploratory data, a survey instrument will be developed, pretested, and distributed to approximately 1000 small farmers in South Carolina.Objective 2: Establish an Agribusiness Digital Commerce CenterThe main objective of establishing the Agribusiness Digital Commerce Center is to promote the adoption of digital commerce among small farmers. The Center director will have oversight of all activities related to developing, scheduling, and delivering training programs to small farmers and conducting coaching sessions with them. The Center will also develop and make available online help resources to assist small farms in their online marketing needs.Objective 3: Develop and implement training programs for online marketing and technology skills.Agribusiness Digital Commerce Center will develop training programs to develop competencies in online marketing and digital technology skills. After analyzing the data collected under Objective 1, the exact topics for the training workshops will be identified. Faculty, consultants, and industry leaders will conduct the training workshops.Objective 4: Conduct digital commerce coaching sessions with farmers to increase online presence and sales. Small farmers, whether they aspire to sell online or are looking to expand their online sales, will benefit from personalized one-on-one coaching sessions. These sessions, conducted by qualified project staff and faculty with expertise in marketing and technology, are designed to address each farmer's specific needs and challenges.Objective 5: Develop and implement the interdisciplinary Agribusiness Digital Commerce Course. The course will be designed for students from various majors to develop digital commerce skills in farm-based businesses.

Progress 09/01/24 to 08/31/25

Outputs
Target Audience:The project's target audience for the reporting period consists of small, farm-based businesses in South Carolina with a gross farm income between $1,000 and $250,000. To recruit participants for the focus groups, the research team collaborated with SC State University's Extension officers across the state. The research staff reached out to potential participants via email and phone, depending on the region, to invite them to join the focus groups. For the statewide survey, the research team developed a sample frame using South Carolina farm directories, listings, and member lists from SC State University Public Service and Agriculture extension and state cooperatives. From this sample frame, a random selection of 1,000 farms was chosen to receive the survey. The survey was mainly sent by email, with phone and in-person options also available to encourage participation. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?The undergraduate research assistant on this project had many opportunities for training and professional growth. She was taught to think like a research scientist through a curriculum that covered scientific methods and ethics. This training was continuous throughout the program, focusing on key research skills such as data coding and analysis, creating graphs, and writing research reports. Given the project's needs for logo design, website planning and development, content creation, and sharing across various online platforms, she also received instruction in website development and the Adobe Creative Suite. The Principal Investigator and the Co-PI led most of these training sessions. How have the results been disseminated to communities of interest?Since the project is still in its first year, conclusive results are not yet available for dissemination to communities of interest. However, we have established a project website and a social media presence to share information related to e-commerce. These platforms also serve as a way to engage with farmers and encourage them to contact the research team for assistance with their e-commerce ventures. What do you plan to do during the next reporting period to accomplish the goals?For the upcoming reporting period, our project will focus on a series of key activities to advance our research and community engagement goals. Activity 1: Data-Driven Assessment We will continue collecting data until we reach the target sample size, ensuring our findings are conclusive and representative. Once the data is collected, we'll analyze it to identify specific needs and challenges farmers face with e-commerce adoption. This analysis will serve as the foundation for everything that follows. Activity 2: Training & Outreach Based on our assessment, we will develop targeted training programs to address the identified need areas. A key part of this phase involves working with extension staff to organize and help lead workshops. These sessions will be essential for reaching a broad audience and giving farmers practical skills. Activity 13: Hands-On Support We will select a group of farmers for one-on-one, intensive training. This personalized support will help them develop their supplemental online markets, offering a direct path to increased economic stability and success.

Impacts
What was accomplished under these goals? The primary objective of this reporting period was to investigate factors that deter South Carolina (SC) farms from adopting and effectively using digital commerce to market their products. The research involved three main activities: understanding the number of SC farms currently using e-commerce, conducting focus groups to identify barriers and accelerators, and designing a statewide survey to collect comprehensive data. SC Agricultural Sector and E-commerce Platforms South Carolina's agricultural sector operates as a dual-market system, where a small number of large producers dominate wholesale markets while most small, family-owned farms rely on direct marketing channels. Out of 22,633 farms in the state, 86.6% have sales under $50,000, accounting for only 2.7% of total sales. For these smaller farms, direct-to-consumer (DTC) marketing, especially through digital commerce, is becoming crucial for increasing profit margins and strengthening customer relationships. Currently, there is no specific data available on the number of SC farms using e-commerce. However, farms with an online presence use a variety of platforms that fall into three main categories: State-Sponsored and Regional Marketplaces: These platforms, like WeShopSC and Shop Local SC, are often used for brand visibility and contact information rather than for transactional e-commerce. Specialized Agribusiness E-commerce Platforms: Designed for the "farm-to-fork" supply chain, these platforms, such as Local Line and the Open Food Network, help manage agricultural sales and tackle unique logistical challenges. General E-commerce and Website Builders: Many farms use platforms like Wix.com for a simple and affordable online presence. Some farms use a hybrid approach, using a website for certain products but asking customers to contact them directly for others due to complex shipping or logistical issues. Focus Group Findings The research team conducted four focus groups with 58 farm-based businesses to understand their digital commerce usage, perceived benefits, and the barriers they face. Usage and Benefits Most participants have limited engagement with e-commerce, primarily relying on traditional, face-to-face sales methods like farmers' markets and roadside stands. While most farmers are comfortable with basic computer skills, they find more advanced digital marketing tasks, such as content creation and managing online platforms, to be challenging. For instance, in the first two focus groups, only a few of the 27 participants had websites, and none of the participants in the third and fourth groups engaged in online sales. Despite the low adoption, farmers view digital commerce as a "game-changer" with several key benefits, including time efficiency, expanded market reach, and flexibility in sales strategies. Farmers were particularly receptive to the idea of digital marketing as a collective effort, showing more enthusiasm for cooperative platforms than for individual online selling. Barriers and Challenges The farmers' enthusiasm was balanced by significant practical challenges. The main barriers to adoption include: Lack of Technical Skills: Farmers cited a lack of understanding of how to generate online business and use digital platforms effectively as a key barrier. Time and Effort: Creating and maintaining an online presence is time-consuming, which is difficult given their schedules. Cost Concerns: The additional expenses of online selling and website operation are a major deterrent, as farmers want a clear return on investment. Logistics: There are significant challenges in managing e-commerce logistics, such as specialized packaging and shipping. Infrastructure: Many farms lack the proper storage facilities and other resources needed to scale up sales online. Inventory Management: Farmers highlighted difficulties in updating product availability and linking websites to inventory systems in real-time. Volume Requirements: Some farmers feel they do not produce enough to make online selling economically viable. Despite these challenges, farmers expressed a strong interest in hands-on training, technical support, and simplified digital tools for inventory, shipping, and website development. Statewide Survey A statewide survey was designed to collect detailed data from small SC farms with an income between $1,000 and $250,000. The project aims to survey 1,000 farms using a mixed-method approach (mail, phone, and online) to achieve a 40% response rate. The survey has three key objectives: Digital Commerce Adoption: To measure the level of adoption, differentiating between online marketing and direct e-commerce sales. Digital Self-Sufficiency: To assess farm operators' technological and marketing skills to determine if a lack of skills is a primary barrier. Perceptions of Costs and Benefits: To gauge farmers' awareness of potential benefits and their perceptions of the costs and barriers involved. The data from this ongoing survey will be used to identify specific barriers and develop targeted training and support services.

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