“Internet will extend electronic marketplace and make it the ultimate go-between, the universal middleman.”

Bill Gates

I.T.C - INDIAN TOBACCO COMPANY

BEGAN AS IMPERIAL TOBBACO COMPANY IN 1910

EXPANDED BUSINESS OVER THE YEARS

CHANGED NAME IN 1970

BEGAN ITS GREEN JOURNEY IN 1998

PATH BREAKING E-CHOUPAL INITIATIVE IN 2000

E - CHOUPALINITIATIVE OF ITC LIMITED

CHOUPAL – A HINDI WORD MEANING VILLAGE MEETING PLACE

E HERE STANDS FOR ELECTRONIC

VIRTUAL MARKET PLACE WHERE VENDORS AND CUSTOMERS COME TOGETHER TO DO TRANSACTIONS

ITC USED A SYMBIOTIC-MICRONODAL MODEL WHERE BOTH THE PARTIES WERE MAKING PROFIT AT DIFFERENT LEVELS.

ITC SET UP ITS FIRST E-CHOUPAL IN 2000 AND IT HAD 6,500 ECHOUPALS

IN 2009 COVERING 40,000 VILLAGES IN 10 STATES AND EMPOWERING AROUND 4 MILLION

PROBLEMS FACED BY INDIAN FARMERS

FRAGMENTED FARMS,WEAK INFRASTRUCTURE

INVOLVEMENT OF NUMEROUS INTERMEDIARIES

INFORMATION ASYMMETRY CAUSED BY INTERMEDIARIES

LOW RETURN FOR YIELD

NO INSPIRATION TO USE BETTER TECHNOLOGY

CONVENTIONAL VALUE CHAIN

NEED FOR E CHOUPAL WAS CONCEIVED TO TACKLE THE CHALLENGES POSED BY UNIQUE FEATURES OF INDIAN AGRICULTURE

CUT DOWN THE ROLE OF INTERMEDIARIES

PROVIDE PROPER COSTS AND BENEFIT TO THE FARMERS DIRECTLY

PROVIDE A BETTER CROP TO THE COUNTRY

HELP IN TECHNOLOGY EXPANSION

HOW E CHOUPAL WORKS….

CLICK & MORTAR INITIATIVE

ITC SETS UP A BACK-UP PHYSICAL SERVICE SUPPORT AT THE VILLAGE LEVEL THROUGH SANCHALAK

ITC ACCUMULATES INFORMATION REGARDING WEATHER, MODERN FARMING PRACTICES, AND MARKET PRICES

UPLOADS ALL INFORMATION ON TO E-CHOUPAL WEB SITE.

INFORMATION IS CUSTOMIZED,SANCHALAK ACCESS THIS INFORMATION AND FACILITATES ITS DISSEMINATION TO FARMERS.

HELPS FARMERS TO SELECT THE RIGHT CROP AND IMPROVE THE PRODUCTIVITY OF THEIR FARMS.

HOW E CHOUPAL WORKS….

AVAILABILITY OF MARKET INFORMATION HELPS FARMERS TO BECOME MARKET ORIENTEDTHEREBY HELPING BETTER PRICE REALIZATION FOR FARMERS

AGGREGATES FARMERS INPUT PURCHASE ORDERS FOR VARIOUS ITEMS LIKE SEEDS, PESTICIDES AND

PLACES THEM DIRECTLY WITH THE SUPPLIERS THROUGH INTERNET AND FACILITATE SUPPLY OF HIGH QUALITY FARM INPUTS AS WELL AS PURCHASE OF FARM PRODUCE AT FARMERS DOORSTEP

E-CHOUPAL, A NEW BUSINESS MODEL

HOW E CHOUPAL HELPED

E-CHOUPAL IS AN ICT PLATFORM THAT FACILITATES FLOW OF INFORMATION AND KNOWLEDGE, AND SUPPORTS MARKET TRANSACTIONS ON LINE.

· IT TRANSMITS INFORMATION (WEATHER, PRICES, NEWS)

· IT TRANSFERS KNOWLEDGE (FARM MANAGEMENT, RISK MANAGEMENT)

· IT FACILITATES SALES OF FARM INPUTS (SCREENED FOR QUALITY) AND

· IT OFFERS THE CHOICE OF AN ALTERNATIVE OUTPUT-MARKETING CHANNEL (CONVENIENCE,LOWER TRANSACTION COSTS) TO THE FARMER RIGHT AT HIS DOORSTEP

IT IS AN INTERLOCKING NETWORK OF PARTNERSHIPS (ITC + MET DEPT + UNIVERSITIES +INPUT COS + SANYOJAKS, THE ERSTWHILE COMMISSION AGENTS) BRINGING THE “BEST-INCLASS” IN INFORMATION, KNOWLEDGE AND INPUTS.

BENEFITS OF E CHOUPAL

CREDIT AND INSURANCE

LOCAL LEADERSHIP DEVELOPMENT

DIGITAL TRANSFORMATION

RECOGNITION TO INTEGRAL PARTNER IN THE SUPPLY PROCESS & NOT MERE ASAGRICULTURAL PRODUCER

OTHER BENEFITS TO FARMERS LIKE REIMBURSED FOR TRANSPORT FASTER TRANSACTION TIME

#19

TRANSACTION COSTS

The Mandi Chain

Farmer Incurs

Trolley Freight to Mandi = 100Filling & Weighing Labour = 70Labour Khadi Karai = 50Handling Loss = 50

Rs per MT

270

ProcessorIncurs

Commission to Agent = 100Cost of Gunny Bags (net) = 75Labour (Stitching, Loading) = 35Labour at Factory (Unload) = 35Freight to Factory = 250Transit Losses = 10

505

Total Chain 775 V V2

#20

The eChoupal Chain

Farmer IncursTrolley Freight to Mandi = 100Filling & Weighing Labour = 70Labour Khadi Karai = 50Handling Loss = 50

Rs per MT

270

ProcessorIncurs

Sanchalak = 50Commission to Agent = 100Cost of Gunny Bags (net) = 75Labour (Stitching, Loading) = 35Labour at Factory (Unload) = 35Freight to Factory 100 = 250Transit Losses = 10

505

Total Chain775

TRANSACTION COSTS

185

185

SOME WEAKNESSES

DOES NOTHING TO SOLVE THE MORE FUNDAMENTAL PROBLEM OF THE INHERENT INEFFICIENCIES CREATED BY SO MANY TINY FARMS.

IT RELIES ON INFRASTRUCTURE, WHICH IS OFTEN LACKING IN RURAL COMMUNITIES

E-CHOUPAL CAN BE NO MORE EFFECTIVE THAN THE SANCHALAK (COORDINATOR) IN EACH COMMUNITY

e-Choupal Now Next 5 Years

States covered 10 15

Villages covered 40,000 100,000

No. of e-Choupals 6,500 20,000

Farmers e-empowered 4 million 10 million

THE WAY AHEAD……

CONCLUSION

E-CHOUPAL HAS BEEN MOST SUCCESSFUL INITIATIVE TO WIRE RURAL INDIA

E-CHOUPAL HAS ALSO ATTRACTED ATTENTION FROM THE RENOWNED ACADEMICIANS, SINCE IT HAS MANAGED TO INNOVATE THE SUPPLY-CHAIN MODEL

MODEL APPLIED BY ITC HAS ENOUGH POTENTIAL TO BE REPLICATED IN THE UNDER-DEVELOPED AND DEVELOPING COUNTRIES

SUCCESSFUL IN MAKING THE FARMER FEEL THE SENSE OF OWNERSHIP AND ENTHUSE HIM TO GENERATE ADDITIONAL REVENUE

THANK YOU…….