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August 16, 2011

62 Percent of U.S. Farms Have Broadband, USDA Says

By Gary Kim, Contributing Editor
One has to be careful when trying to assess the state of Internet or broadband adoption, as is clear from the latest study by the Department of Agriculture on farm use of PCs and Internet access services. Read the report here.



About 62 percent of U.S. farms now have Internet access, compared with 59 percent in 2009. Sixty-five percent of farms have access to a computer in 2011, up one percentage point from 2009. 

The proportion of U.S. farms owning or leasing a computer in 2011, at 63 percent, was up two percentage points from 2009. 

The reason one has to be careful when reviewing such statistics is that there is a difference between a consumer’s ability to buy a product and a consumer’s appetite for a product. In the former case, the issue is “availability,” whereas in the latter case, the issue is “demand.” Those are important distinctions.

The study does not tell us why 35 percent of farms choose not to use PCs, though one might infer that household income is probably involved. But one might reasonably infer that PC ownership and Internet usage are highly correlated. Just two percent of PC users report they do not use the Internet. 

One might also suggest there is a ”demand” issue in farm country, not an “availability” problem, for the most part. Even if 100 percent of the gap between PC ownership and broadband access penetration is attributable to “I can’t buy it because my cable or telephone company doesn’t offer it where I live,” that could not be greater than two percent of households.

But satellite and wireless were each reported as the primary Internet access methods on 15 and 20 percent of those U.S. farms with Internet access. So even if cable or telco access were not available, satellite and wireless access seems to be both available and purchased at significant rates. 

If “everyone” can buy a product, but only some do, that is not necessarily a problem. If people want to buy a product, but cannot, that arguably is a problem. The USDA survey results only tell us about current demand for products such as PCs and Internet access. The survey does not tell us much about the availability of Internet access service. What the USDA data show is that 65 percent of farms surveyed had PCs, and 63 percent used Internet access services. 

That’s a key difference. If people choose not to buy an available product, that’s just consumer choice. If people want to buy Internet access, and cannot, that is evidence of a supply problem. The former is not a problem, but the latter situation is an issue. 

Digital subscriber line  was the most common method of accessing the Internet, with 38 percent of U.S. farms using it, up from 36 percent in 2009. Dial-up access dropped from 23 percent in 2009 to 12 percent in 2011. 

Cable modem service was reported as the primary access method on 11 percent of the farms, the same level as 2009.

Farms using computers for their farm business remained virtually stable at 37 percent in 2011 compared to 36 percent in 2009.   

In 2011, 84 percent of U.S. farms with sales and government payments of $250,000 or more have access to a computer, 83 percent own or lease a computer, 72 percent are using a computer for their farm business, and 82 percent have Internet access. 

For farms with sales and government payments between $100,000 and $249,999, the figures are: 68 percent have access to a computer, 68 percent own or lease a computer, 52 percent are using a computer for their farm business, and 67 percent have Internet access. 

Of the farms with sales and government payments between $10,000 and $99,999, 63 percent reported having computer access, 62 percent own or lease a computer, 41 percent use a computer for their farm business, and 60 percent have Internet access.

For crop farms, 67 percent have computer access and 41 percent use a computer for their farm business in 2011, up two and one percentage points from 2009, respectively. Internet access for crop farms has increased to 64 percent in 2011, compared with 60 percent in 2009. 

In 2011, a total of 63 percent of livestock farms have computer access and 61 percent have Internet access.  

What the report seems to suggest is that, for the past several years, it is possible that rural broadband penetration actually is pretty close to the penetration of Internet users. A 2009 study by comScore suggested that, in rural areas, broadband penetration is at 75 percent. If one assumed some rural users still use dial-up, that suggests perhaps 85 percent of rural households now use the Internet. Read more here.
Broadband penetration in rural markets did see double-digit growth in 2010 as regional providers captured an increasing share of the market in these areas, according to digital measurement firm  comScore. 

Broadband penetration in rural markets reached 81 percent in the fourth quarter of 2009, an increase of 13 percentage points in a year. In 2010, rural U.S. broadband penetration was said to be about 50 percent of rural households, according to the Pew Internet & American Life Project, so farm households appear to be heavier users of broadband than other rural households. See more here.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Rich Steeves
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