Mohanpur, Nadia, West Bengal – 741252

Department of Agricultural Economics

Project Report On

ITC’s e-Choupal

“A Platform Strategy for Rural Transformation”

Under the supervision of Submitted By:

Sanjib Mukhopadhay Nabanita Adhikari

B.Sc (Ag.), 7th Semester, 4th module

E-CHOUPAL: ITC’S RURAL NETWORKING PROJECT

In Hindi a Choupal is a village gathering place. The e-Choupal initiative—whereby a Choupal is equipped with a computer and Internet connectivity—is the brainchild of a large agricultural processing company in India, the Indian Tobacco Company (ITC). The initiative was conceived to tackle the challenges posed by certain features of Indian agriculture, such as fragmented farms, a weak infrastructure, and the involvement of numerous intermediaries. Although the primary objective of the project was to bring efficiency to ITC’s procurement process, an important byproduct is the increased empowerment of rural farmers where e-Choupal have been established. The e-Choupal initiative directly links the rural farmers with the company for the procurement of agriculture and aquaculture products, such as soybeans, coffee, and prawns. Traditionally, these commodities were procured by such companies as ITC from mandis (major agricultural marketing centers in rural areas of India), and a long chain of intermediaries was involved in buying the produce from farmers and moving it to the mandis. Through e-Choupal, these farmers can directly negotiate the sale of their produce with ITC. The PCs and Internet access at these centers enable the farmers to obtain information on mandi prices and good farming practices, and to place orders for agricultural inputs, such as seeds and fertilizers. This access to information helps farmers in improving the quality of produce and obtaining better prices. Elected from the village itself, a literate farmer acts as the interface between the illiterate farmers and the computer. The e-Choupal model has been effective in the short term. However, because of multiple variables that affect productivity, a long-term assessment of the system’s productivity and efficiency levels needs to be undertaken.

Why e-Choupal:

Rural India is a difficult business location. Transport, electric power, and information infrastructure are inadequate. Business practices are underdeveloped or outdated. Lack of access to modern resources has resulted in an under-trained workforce. Rural society is structured around subsistence and is unprepared for modern products and services. These constraints, along with many others, have dissuaded most companies from taking on the challenge of rural commerce. Yet such an engagement can serve a dual agenda: bridging rural isolation and the resulting disparities of education and economic opportunity, while at the same time creating a potentially large profit opportunity for the organization willing to tackle the inefficiencies. The key question is how modern resources and methods can be practically deployed to profitably overcome rural constraints.

Small Landholdings Low literacy , Low Income Weak Infrastructure : Physical , Social Underserved on supply side Over dependence on intermediaries Low productivity – Low share of consumer spend They do not have bargaining power They do not have access to real time information They cannot get customized knowledge advise

E-CHOUPAL : what is it ?

It is a unique web based initiative of ITC-ABD Offers the farmers all the information ,products

& services to enhance farm productivity Improve farm gate prices, Cut transaction costs Access to farmers about latest local and global

information on weather, scientific farming practice as well as market prices at the village itself

Enabled with web portal –in regional languages Facilitate supply of high quality farm inputs as well as purchases of commodities at

farmers door step.

How is it useful to farmers?

A local farmer acting as a coordinator or 'Sanchalak' runs this amenity ,e-choupal

He receives a small commission from farmers who wish to use this facility.

Farmers use the computer to access daily closing prices of local mandis, international prices as well as details about new farming techniques.

The computer at the e-Choupal may also be utilized for ordering seed, fertilizers and other products from ITC or its partners at discounted prices.

During the harvest season, ITC proposes to buy the crop directly from farmers at the previous day's closing price.

Each e-Choupal costs between US$3,000 and US$6,000 to set up and around US$100 annually for maintenance. They usually serve an average of 600 farmers within a five km radius.

How does it work?

ITC Limited has now established computers and Internet access in rural areas across several agricultural regions of the country, where the farmers can directly negotiate the sale of their produce with ITC Limited. The PCs and Internet access at these centers enable the farmers to obtain information on mandi prices, good farming practices and place orders for agricultural inputs like seeds and fertilizers.

Each ITC Limited kiosk having an access to Internet is run by a Sanchalak-a trained farmer. The computer housed in the sanchalak's house is linked to the Internet via phone lines or by a VSAT connection and serves an average of 600 farmers in the surrounding ten villages within about a 5 km radius.

The Status of Execution Launched in June 2000, 'e-Choupal', has already become the largest

initiative among all Internet-based interventions in rural India.

e-Choupal' services today growing to a range of crops - soyabean, coffee, wheat, rice, pulses, shrimp

across ten states (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Kerela and Tamil Nadu).

A digital transformation

ITC began the silent e-volution of rural India with soya growers in the villages of Madhya Pradesh. For the first time, the stereotype image of the farmer on his bullock cart made way for the e-farmer, browsing the e-Choupal website. Farmers now log on to the site through Internet kiosks in their villages to order high quality agri-inputs, get information on best farming practices, prevailing market prices for their crops at home and abroad and the weather forecast –all in the local language. In the very first full season of e-Choupal operations in Madhya Pradesh, soya farmers sold nearly 50,000 tons of their produce through the e-Choupal Internet platform, which has more than doubled since then. The result marks the beginning of a transparent and cost-effective marketing channel. Bringing prosperity to the farmers' doorstep.

Linking farmers to remunerative markets

Farmers grow wheat across several agro-climatic zones, producing grains of varying grades. Though these grades had the potential to meet diverse consumer preferences, the benefit never trickled down to the farmers, because all varieties were aggregated as one average quality in the mandis. Enter ITC's e-Choupal intervention. The e-Choupal site is now helping the farmers discover th e best price for their quality at the village itself. The site also provides farmers with specialised knowledge for customising their produce to the right consumer segments. The new storage and handling system preserves the identity of different varieties right through the 'farm-gate to dinner-plate' supply chain. Encouraging the farmers to raise their quality standards and attract higher prices.

(ITC's mobile vans take the message of e-Choupal to new villages. Thereafter, virtual helpdesks enable the farmer to find solutions to his problems through online interactions. ITC has set up VSAT links to overcome connectivity problems)

Managing risks through technology What’s and ifs in the aqua farmers' life posed daunting odds. They were haunted by the

nightmare of contaminated soil, wrong levels of salinity in the water or the killer White Spot virus, any of which could wipe out an entire shrimp crop, until the e-Choupal site provided them the support and the know-how to cope with and manage such risks. Information equips farmers

with comprehensive know-how to keep abreast of food safety norms to compete in the international market. Information includes parameters for antibiotic usage, hygienic washing, sanitized dressing and air-tight packing. All these factors help to neutralize the risks involved in aqua farming. Making it economically much more attractive, benefiting hundreds of aqua farmers.

1 2 &3 Version of e-choupal :1 2 &3 Version of e-choupal :

Version 1:Version 1:

The Start The Start IDEA:IDEA: To give power of scale to small farmers by aggregating them as sellers To give power of scale to small farmers by aggregating them as sellers (of produce) and as buyers (of farm inputs)(of produce) and as buyers (of farm inputs)

FARMERS’ GAIN:FARMERS’ GAIN: They get bargain and choice - the two key virtues of competition They get bargain and choice - the two key virtues of competition

ITC’S GAIN:ITC’S GAIN: Access to inputs for its agri business; offer the use of network to other Access to inputs for its agri business; offer the use of network to other companies.companies.

Version 2.0Version 2.0

The Scale-up The Scale-up REACH: millions of farmers REACH: millions of farmers

OFFERING: Network now offered five services:OFFERING: Network now offered five services:

•Information: weather, price, etc.•Information: weather, price, etc.• Knowledge: farming methods, soil testing, etc.• Knowledge: farming methods, soil testing, etc.• Purchase: Seed, fertilizer, etc• Purchase: Seed, fertilizer, etc• Sales: Farmers sell crops to ITC centre• Sales: Farmers sell crops to ITC centre• Other: Cattle care, water harvesting, women employment etc• Other: Cattle care, water harvesting, women employment etc

Version 3.0

The Deepening NEW BUSINESSES: Add two new anchor businesses:

1) Rural jobs and employability and 2) Personalized agri services. Plus strengthen

existing commodity sourcing MORE INTERACTION: Through Choupal

Saagars and Haats and via mobile phones NEW TECHNOLOGY: Use of especially enabled

mobile phones, in addition to PCs, for two-way interaction with farmers; use of analytics; new partners

The latest version also provides employment opportunities to rural youths and has helped fill 1,200 job openings from 52 companies.

But Version 3 has gone beyond just helping rural India to reduce its pressure on land. Under the new version, ITC plans to address the sustainability angle of the Indian

agricultural sector by promoting the practice of green farming.

"The company is now pushing farmers to adopt organic farming as well as reducing of greenhouse gas emissions,

AWARDS TO ITC:E-CHOUPAL: The Development Gateway Award:2005

ITC is the first Indian company and the second in the world to win this prestigious award.

The 'Golden Peacock Global Award for Corporate Social Responsibility (CSR) in Emerging Economies: 2005’.

United Nations Industrial Development Organization (UNIDO)Award: 2008 The Ashoka - Changemakers ‘Health For All’ Award :2006 Innovation for India Award: 2006 The Corporate Social Responsibility Award :2004 from The Energy and Resources

Institute(TERI)