[Part-I] Institutional prospective with e-(Electronic)
e-choupal is a Hindi word which means “village meeting place”. It is a virtual market place where farmers can transact directly with a processor and can realize better price for their produce.The programme installs computers with Internet access in rural areas of India to offer farmers up-to-date marketing and agricultural information. It link directly with rural farmers via the Internet for procurement of agricultural and aquaculture products like soybeans, wheat, coffee, and prawns; and also tackles the challenges posed by Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of intermediaries.
e-Choupal is an India-based business initiative by ITC Limited that provides Internet access to rural farmers. The idea of creating and leveraging an electronic market place came from the brainstorming session done by senior executives of ITC-IBD.The purpose is to inform and empower them and, as a result, to improve the quality of agricultural goods and the quality of life for farmers.ITC Limited (formerly India Tobacco Company Limited) is a consumer product and agribusiness conglomerate in India known for their production of cigarettes, specialty paper, food products and packaging services.
Through the e-Choupal initiative, ITC has created more than 6,500 e-Choupal computer stations in rural areas that serve an average of six hundred farmers each. Using this technology, farmers may order supplies, learn about best agricultural practices, receive weather reports and read about pricing for crops throughout the region.Farmers can use that information to their own prices. They also obtain higher profit margins because they’re no longer forced to sell through a middleman. ITC Limited also benefits from the initiative, by simplifying its supply chains and increasing its profits.
The Model in Action:
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, counterparty risk and bridge financing –while disintermediating 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 customized 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.
Team Aspirant Forum