E-Choupal Empowering Rural India

Introduction India is second most populated country in the world. Agriculture is the backbone of Indian economy. It contributes around 26% of the total GDP. Agriculture provides livelihood to about 65% of the labour force and accounts for 8.56% of India's exports.

Conventional Value Chain

Problems Before e-Choupal was introduced Traditionally, these commodities were procured in “mandis” (major agricultural marketing centres in rural areas of India), where the middleman used to make most of the profit. Middlemen used unscientific and sometimes outright unfair means to judge the quality of the product to set the price. Difference in price for good quality and inferior quality was less, and hence there was no incentive for the farmers to invest and produce good quality output.

E-Choupal-An Introduction e-Choupal is an initiative of ITC Limited, a conglomerate in India, to link directly with rural farmers via the Internet for procurement of agricultural and aquaculture. Products like soybeans, wheat, coffee, and prawns. e-Choupal tackles the challenges posed by Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of intermediaries. The programme installs computers with Internet access in rural areas of India to offer farmers up-to-date marketing and agricultural information.

PRINCIPLE OF THE E-CHOUPAL The principle of the e-Choupal is to inform, empower and complete. At the same time ITC has also extracted value in four steps to make the model sustainable and scalable: 1] Elimination of non-value added activities. 2] Differentiated product through identity preserved supply chains. 3] Value added products traceable to farm, practices. 4] e-market place for spot transactions and support services to future exchange.

Non Conventional Characteristics customer centric capable of being used for many commodities and multiple transactions easily scalable once it is verified uses local talent and local people and develops local leaders can be extended to local as well as global procurers stimulates local entrepreneurs to extend their innovativeness uses all the existing institutions and legal frameworks many others can join the market as transaction time is low

Unique Features of ITC e-Choupal 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.

E-Choupal Business model

Critical Success Factors Comprehensive knowledge of rural markets Designing a Win-Win transaction model Leveraging the logistics channels Selection of Sanchalak Evolving an appropriate user interface Bottom-up model for entrepreneurship

Advantages e-Choupal has the advantages of their own market facilities for purchasing the farmers produce. Geographical distances do not restrict participation in the e-Choupal. e-Choupal is that it can be used for connecting large producers/ small producers and small users/large users thereby eliminating the need for hierarchy of middleman. The e-Choupal model demonstrates that a large business corporation can play a major role in recognizing rural markets and increasing the efficiency of an agricultural system, while doing so in ways that benefit farmers and rural communities as well as shareholders.

Effects of e-choupal 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 centres enable the farmers to obtain information on mandi prices, good farming practices and place orders for agricultural inputs like seeds and fertilizers. This helps farmers in improving the quality of produce, and also helps in realizing a better price.

Conclusion The e-Choupal has applied information and Communication technology to the advantage of India’s small, marginal and resource-poor farmers who have hitherto operated and transacted in unorganized markets. There are 6,500 e-Choupals today. ITC Limited plans to scale up to 20,000 e- Choupals by 2012 covering 100,000 villages in 15 states, servicing 15 million farmers. The e-Choupal scheme initiates a reversal in this trend and empowers the farmers by proving reliable information and access to markets where they can get competitive prices for their produce.