ITC's Agri Business Division, one of
India's 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 sustainable basis.
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.
Tradition Value Chain- From Farm to
Factory(Producer
The Indian farmers
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 them and Indian
agribusiness sector globally uncompetitive, despite rich & abundant natural
resources.
e-Choupal Model
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 dis-intermediating them from the chain of information
flow and market signals.
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
information-based).
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 ITC's 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
e- Choupal Execution Status
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 over 4
million farmers growing a range of crops - soyabean, coffee, wheat, rice,
pulses, shrimp - in over 40,000 villages through 6500 kiosks across ten states
(Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar
Pradesh, Rajasthan, Maharashtra, 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 eg Power back-up
through batteries charged by Solar panels, upgrading BSNL exchanges with RNS
kits, installation of VSAT, Mobile Choupals, local caching of static contents
on website to stream in 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 India's '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 altogether 15 states across India over the next few years. On the
anvil are plans to channelise other services related to micro-credit, health
and education through the same 'e-Choupal' infrastructure.
Another path-breaking initiative -
the 'Choupal Pradarshan Khet', brings the benefits of agricultural
best practices to small and marginal farmers. Backed by intensive research and
knowledge, this initiative provides Agri-extension services which are
qualitatively superior and involves pro-active handholding of farmers to ensure
productivity gains. The services are customised to meet local conditions,
ensure timely availability of farm inputs including credit, and provide a
cluster of farmer schools for capturing indigenous knowledge. This initiative,
which has covered over 70,000 hectares, has a multiplier impact and reaches out
to over 1.6 million farmers.
ITC's e-Choupal has won numerous awards:
- United Nations Industrial Development
Organisation (UNIDO) Award at the international conference on Sharing
Innovative Agribusiness Solutions 2008 at Cairo for ITC's exemplary
initiatives in agri business through the e-Choupal.
- The Ashoka - Changemakers 'Health For
All' Award 2006 for
the Rural Health Services model for delivery of health services through
the e-Choupals.
- The Stockholm Challenge 2006. This award is for using
information technology for the economic development of rural communities.
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