use of ict in agri business - sanjiv sharma

8/8/2019 Use of ICT in Agri Business - Sanjiv Sharma

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FAI WORKSHOP ON IMPORTANCE OF ICTIN THE FERTILISER AND AGRICULTURE SECTORS

Use of ICTin

Agri Business: Prospects and Challenges

Sanjiv SharmaHead Agri-Inputs

ITC International Business Division

Date: 11th May 2006

FLOW OF PRESENTATION

INTRODUCTION

CHALLENGES ICT

PROSPECTS ICT

CASE STUDY ON ECHOUPAL

CONCLUSION


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CHALLENGES ICT1.INFRASTRUCTURE

POWER

-1 lac villages yet receive power

- existing ones receive for only a few hrs

BANDWIDTH

-100 kbps required to reduce any fatigue

MAINTAINANCE

-Adverse conditions

-Resource required for timely action

2.DEMOGRAPHY

LANGUAGE

- Barely any input company has a vernacular website

USAGE SKILLS

- Excessive training required

3.Business Viability

SUSTAINABILITY- half hearted approaches

SCALABILITY

- Should provide a substantial impact` for further adoption

CHALLENGES ICT


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MOA = BUYING

M: Motivation

O: Opportunity

A: Ability

Focus on increasing ability required

PROSPECTS - ICT

AGRI EXTENSION

INTERACTIVE MARKETING

AGRIFINANCE/INSURANCE

EMPLOYMENT

MARKET RESEARCH

PROSPECTS - ICT


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ECHOUPAL

ITC e-Choupal

Introduction

Why?

And Some Challenges

Dependence on monsoon rains = High Risk

Weak infrastructure = Few Alternatives

Physical, Social & Institutional

Some Constraints

Small farms = Weak bargaining power

Dispersed habitations = Expensive to deliver information

Heterogeneous circumstances = Difficult to customise


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Introduction

VILLAGE

TOWN

Farmer

Mandi

Price Discovery@ Sell Transaction

Video

PRODUCT&

SERVICEPROVIDERS

MoneyLender

Financing

Market

Transaction

ExtensionCenter

Knowledge(Use)

Traditional TransactionsSell:

Buy:

Middleman

sunk costs, inconvenience,

other losses

high prices, spurious goods, information not timely

Information(Aggr)


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Introduction

How does this manifest at transaction level?

Output Sales:

Price information is available only when the farmer is ready to transact.

By then he has already traveled 30 KM out of his village.

Sunk costs put pressure to sell, whatever the price is

Middlemen extract high transaction fee, since there is no other option for

the farmer.

Input Purchase:

Exactly the reverse of the above situation, but again to farmersdisadvantage.

Information and Knowledge not available when he wants to transact.

What did ITC come up with

echoupal

An ICT based Solution


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What is eChoupal ?

The echoupal Infrastructure

Tier 1: An ICT kiosk with Internet Access

In the house of a trained farmer Sanchalak

Within walking distance of target farmers

Additional investments in Solar Power & VSATs to overcome weak

infrastructure

Maharashtra operationsTopology of eChoupal

UPS1

Battery1

Power Socket

UPS2

Battery2

Solar Panel 1

Solar Panel 2

Hughes Hub

Choupal Site

DW

Power Socket

eChoupal ComputerDMP Printer


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The eChoupal Services

Relevant & Real-time Information

Commodity prices, Local Weather, News

Customised Knowledge

Farm Management, Risk Management

Direct Marketing Channel for Farm Produce

Lower Transaction Costs, Better Value through Traceability

Supply Chain for Farm Inputs

Screened for Quality, Demand Aggregation for Competitive

Prices & Efficient Logistics

What is eChoupal ?

Education

Financial services Life,General, Health & Crop Insurance

How is eChoupal different?

1. Freedom of Information

Information & Knowledge is free of cost

No initial investment of the Sanchalak

Not subsidized- Govt does not pay , the shareholders look for a

competitive return.

2. Freedom of Transaction

Farmers are free to sell their produce anywhere

3. Entrepreneurship

No salary paid to Sanchalaks a commission based model


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Whats in it for ITC?

Better supply chain for ITCs Food & Agri Businesses

Costs, Quality, Traceability

Access to the Underserved Rural Markets

Through a Virtuous Cycle created by Larger Incomes, andfounded on Trust that is built

New ITES Business Opportunities

Health, Education, Entertainment

Shareholder Value through Serving Society Also, the infrastructure serves as a reliable delivery mechanism forresource development initiatives (e.g. water,animal management)

Whats in it for the farmer?

Bottom line for the farmer

Increased yieldsIncreased yields

Improved QualityImproved Quality

Reduction in Transaction costsReduction in Transaction costs

Power of Scale to the Small Farmer

Customized Knowledge despite Heterogeneity

Real time information despite Distances


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TOWN

Mandi

Samyojak

Choupal Saagar

VILLAGE

Farmer

Sanchalak

Transactions

Transactions through ITC eChoupalSell:

Buy:

Information(e.g., PriceDiscovery)

Video

Knowledge(Customized)

PAN-INDIAN

PRODUCT&

SERVICEPROVIDERS

Price discovery @ village, choice, efficiency

Information + Customized Knowledge @ village, high quality,competitive prices, superior service

ECHOUPAL WEBSITE MARATHI- KRISHI SEVA


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ECHOUPAL WEBSITE MARATHI PARICHARCHA

ECHOUPAL WEBSITE MARATHI - SOYABEEN


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ECHOUPAL WEBSITE MARATHI EMAIL

eChoupal : Choupals & Hubs

Choupal

Within walking distance of a farmer

Hub

Within Tractor-able distance of a farmer

~40 Choupals in a hub

Choupal

Choupal

Choupal

Choupal

Choupal

Choupal

Choupal Choupal

Choupal Choupal

Choupal

HUBHUBPlanned to graduate to a Rural SuperstorePlanned to graduate to a Rural Superstore

IT Infrastructure

Catchment

Village

CatchmentVillage

CatchmentVillage

CatchmentVillage

CatchmentVillage

CatchmentVillage

CatchmentVillage

CatchmentVillage


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Managed by the erstwhile middleman Samyojak- A trader appointed by ITC,

provides various services under ITC supervision e.g. Quality Testing,

Electronic Weighment, Storage, Payments.

New made-to-design hubs(Choupal Sagar) being built, to overcome the

shortage of space in the traditional warehouses for parking (tractors /

trollies) and farmer utilities,besides many operational problems.

What is eChoupal ?

The echoupal InfrastructureTier 2: Hub /Choupal Sagar @ Cluster level

. .


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The eChoupal Value Proposition Low Cost Last Mile

Distribution at Low cost

Wide reach in Rural India

High Credibility Increased product penetration

Right prices to consumers

Continuous visibility/ availability

Intelligent First Mile:

Sharply Targeted Consumers

Product endorsement

Education on product usage and benefits

Brand building at low cost

Superior understanding of rural consumers

Footfall to Business

One stop shop at a tractor-able distance

High Quality of Products and Services

Right Prices

Shopping environment


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Wheat

Soybean

Soybean

& Wheat

Coffee

Aqua

Wheat

Soybean

Soybean

& Wheat

Coffee

Aqua

Scale Today and VisionTomorrow

Kiosks: 5,400

Villages: 31,000

Farmers: 3.5 million

Year 2005:

Kiosks: 20,000

Villages: 100,000

Farmers: 10 million

Year 2010:

Alliances:

UP Seed & TDC

NFL

Khaitan

International Panacea Limited

RCFL

Advanta

Farm Inputs

16

Maxima

Durables/ Vehicles:

12


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Alliances:FMCG9

Gillete/ Kodak/ ACC/ Tata Steel/ Duraline.

Godrej Saralee

THANK YOU

use of ict in agri business - sanjiv sharma

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