The Big Picture:
ITCs Agri Business Division,
one of Indias largest exporters of agricultural commodities, has
conceived e-Choupal as a more efficient supply chain aimed at
delivering value to its customers around the world on a
The e-Choupal model has been
specifically designed to tackle the challenges posed by the unique
features of Indian agriculture, characterised by fragmented farms,
weak infrastructure and the involvement of numerous
intermediaries, among others.
The Value Chain - Farm to Factory
e-Choupal also unshackles the
potential of Indian farmer who has been trapped in a vicious cycle
of low risk taking ability > low investment > low
productivity > weak market orientation > low value addition
> low margin > low risk taking ability. This made him and
Indian agribusiness sector globally uncompetitive, despite rich
& abundant natural resources.
Such a market-led business model can
enhance the competitiveness of Indian agriculture and trigger a
virtuous cycle of higher productivity, higher incomes, enlarged
capacity for farmer risk management, larger investments and higher
quality and productivity.
Further, a growth in rural incomes will
also unleash the latent demand for industrial goods so necessary
for the continued growth of the Indian economy. This will create
another virtuous cycle propelling the economy into a higher growth
The Model in
Appreciating the imperative of
intermediaries in the Indian context, e-Choupal leverages
Information Technology to virtually cluster all the value chain
participants, delivering the same benefits as vertical integration
does in mature agricultural economies like the USA.
e-Choupal makes use of the physical
transmission capabilities of current intermediaries aggregation,
logistics, counter-party risk and bridge financing while
disintermediating them from the chain of information flow and
With a judicious blend of click & mortar
capabilities, village internet kiosks managed by farmers called
sanchalaks themselves, enable the agricultural community
access ready information in their local language on the weather
& market prices, disseminate knowledge on scientific farm
practices & risk management, facilitate the sale of farm
inputs (now with embedded knowledge) and purchase farm produce
from the farmers doorsteps (decision making is now
Real-time information and customised
knowledge provided by e-Choupal enhance the ability of farmers
to take decisions and align their farm output with market demand
and secure quality & productivity. The aggregation of the
demand for farm inputs from individual farmers gives them access
to high quality inputs from established and reputed manufacturers
at fair prices. As a direct marketing channel, virtually linked to
the mandi system for price discovery, e-Choupal eliminates
wasteful intermediation and multiple handling. Thereby it
significantly reduces transaction costs.
e-Choupal ensures world-class quality
in delivering all these goods & services through several
product / service specific partnerships with the leaders in the
respective fields, in addition to ITCs own expertise.
While the farmers benefit through
enhanced farm productivity and higher farm gate prices, ITC
benefits from the lower net cost of procurement (despite offering
better prices to the farmer) having eliminated costs in the supply
chain that do not add value.
The Status of
Launched in June 2000,
e-Choupal has already become the largest initiative among all
Internet-based interventions in rural India. e-Choupal services
today reach out to more than 4 million farmers growing a range of
crops soybeans, coffee, wheat, rice, pulses, shrimp in some
40000 villages through almost 6500 kiosks across ten States (Madhya Pradesh, Maharashtra, Rajasthan, Haryana, Karnataka, Andhra Pradesh, Uttar Pradesh, Uttaranchal, Kerela and Tamil Nadu).
The problems encountered while setting
up and managing these e-Choupals are primarily of
infrastructural inadequacies, including power supply, telecom
connectivity and bandwidth, apart from the challenge of imparting
skills to the first time internet users in remote and inaccessible
areas of rural India.
Several alternative and
innovative solutions some of them expensive are being deployed
to overcome these challenges e.g. Power back-up through batteries
charged by Solar panels, upgrading BSNL exchanges with RNS kits,
installation of VSAT equipment, Mobile Choupals, local caching of
static content on website to stream in the dynamic content more
efficiently, 24x7 helpdesk etc.
Going forward, the roadmap includes
plans to integrate bulk storage, handling & transportation
facilities to improve logistics efficiencies.
As Indias kissan Company, ITC has
taken care to involve farmers in the designing and management of
the entire e-Choupal initiative. The active participation of
farmers in this rural initiative has created a sense of ownership
in the project among the farmers. . They see the e-Choupal as
the new age cooperative for all practical purposes.
This enthusiastic response from farmers
has encouraged ITC to plan for the extension of the e-Choupal
initiative to 11 other states across India over the next few
years. On the anvil are plans to channelise services related to
micro-credit, insurance, health and education through the same