1. E-CHOUPAL

2. Background
23% of GDP from agriculture, 66% of workforce, feeding 1 billion people.
Green revolution – India is a net exporter of food grains.
Indian farmer remains poor.
Agriculture system based on small inefficient land holding
Primary producers have been traditionally paid much less - exploited by traders & intermediaries.
Traders well positioned to exploit buyers and sellers in mandi system.
Farmers bring the goods to mandi, sell in auction.

3. WHAT IS E-CHOUPAL Choupal means gathering place in Hindi.
The e-Choupals serve as both a social gathering place for exchange of information and an e-commerce hub.
It has re-modelled the procurement process for soy, tobacco, wheat, shrimp.
E-commerce and E-education platform focused on the needs of rural India.

4. Concept Why is this venture so popular right now?
Initiative to attempt to combine Services and an Effective Business Model successfully
Designed to address the rural problems of:
Fragmented farms
Weak institutions
Involvement of intermediaries
Information Asymmetry
Three tier structure
Local part for Responsiveness
Regional level for Controlling
Apex element for Resources Allocation

5. The Business Model
The idea: One choupal would serve 10 villages within a 5 km radius
The village e-choupal is housed in the Sanchalak/ Co-ordinator’s house.
The Sanchalak is central to the business model. Such a role helps ITC by:
Providing trust among the farmers on behalf of the community
Removing the need of a physical infrastructure such as the kiosk
As a communication channel between the illiterate farmers and ITC
The Sanchalak is paid a commission on each transaction undertaken (0.5%). The main attractions for such a post are :
Increased social standing among the community
Willingness to help the village
Profit motive

6. The Web Portal

7. Farmer Queries
Market Rates of Different Mandis

8. Website
weather pricing news best practices Q & A Market Prices Entertainment Sports Education Communication

9. Building Blocks of E-Choupal
One-stop-shop
Information (weather, prices, news) + Knowledge (farm management, risk management) + Inputs (screened for quality) + Output (convenience, lower transaction costs)
Network of Partnerships
Bringing in “best in class” in all offers
ITC+IMD+Universities+Input Cos etc.
Community Interface
A lead farmer identified from within the village and appointed as Choupal Sanchalak
More effective because the Sanchalak is one among the community

10. Assets of E-Choupal ICT Infrastructure - Physical Reach
Computer
Internet
Multimedia
Broadband
Physical Reach
Choupals within walking distance
Multipurpose WH hubs within driving distance
Key Intermediaries
Sanchalak (1 per cluster of 5-6 villages) 1500/state
Sanyojak (1 per group of choupals) 50/state
ITC (support the farm produce marketing end)

11. Operating Model System support
Computer connected to VSAT or internet, serves an average of 600 farmers in 10 villages within 5 km.
Each e-Choupal costs US$ 3-6,000 to set up and about US$ 100 per year to maintain
System support
15 engineers
25 motorcycles
Estimated cost for per visit US$6.60
30% calls for UPS problems

12. Technology Specification
Technical Architecture
From Dial-up to VSAT: Connectivity Evolution in e- Choupal.
Hardware:-
Power Solar battery charger, UPS
Connectivity : Dial-up modemVSAT modem, antennae
PC with Intel Celeron processor, printer
Software:-
Operating System Windows 98
Word processor Ankur (Hindi word processor)
Other Sunera Kal – Short movie on e-Choupal Video Clips – Soil testing

13. Mandi Operation Process
Disadvantages: - Long distances between mandis(grain markets) Monopolization of information by the trader communities Fragmented payments by traders to framers.

14. E Choupal Supply Chain
Benefits: - Able to differentiate between ‘Risks in Farming’ and ‘Financial risks in Trading’ [ Possible by correcting the information asymmetry] - Also allows the farmer an enlarged choice set – whether he wants to sell to ITC or to the mandi

15. E-Choupal Services Relevant & Real-time Information
Commodity prices, Local Weather, News
Customized Knowledge
Farm Management, Risk Management
Supply Chain for Farm Inputs
Screened for Quality, Demand Aggregation for Competitive Prices & Efficient Logistics
Direct Marketing Channel for Farm Produce
Lower Transaction Costs, Better Value through Traceability

16. Farmer Gains
Farmers have access to prices and can make critical decisions of when and where to sell
Saving on transportation costs from the field to the mandi
ITCs electronic weighing scales and transparent checks ensure ‘intentional spillage’ doesn’t occur
ITC’s agricultural inputs cost substantially less than those offered at the mandi
Farmers save almost 2.5% over the mandi system ( Rs.400 – 500 per ton of soy) thanks to a more efficient market system e.g. cultivation of soy has increased from 50 – 90% in e choupal areas
They can take advantage of services provided by the e-choupal to improve their crop output and farming practices
Increased self respect as they are treated as co partners in a business relationship

17. ITC Gains Lower transaction costs:
ITC pays only a 0.5% commission to the Sanchalak as compared to the 2.5 – 3% paid to the agents under the mandi system (including true cost of inefficiency and intermediary costs)
Has found it cheaper to reimburse farmers transportation costs that pay agents for transportation. (managed to save almost RS. 200 per ton)
Direct virtual vertical integration through e -choupal allows ITC to communicate directly with the farmers
It gets excellent ‘bottom up information’ on pricing, product quality, soil conditions etc. from the Sanchalak
Allows them to develop a long term supplier relationship with the farmers, ensuring supply security over time
By providing quality agricultural inputs and buying quality crops, ITC can ensure a satisfied customer base

18. Losers Commission agents Mandi laborers Bazaars near the mandi
Some mandi operations
Competing processors

19. Futuristics - Services through eChoupal
Distribution of Products and Services to Rural Markets:
Micro marketing
Product/Services Demos
Marketing and Brand Building activities
Pilots
Bhoomi
eHealth with Private Health Service Providers
eEducation
Rural BPO

20. Future plans - partner with banks
Non-cash loans for farm inputs
Insurance and Risk Management Services
Loans to sanchalaks, create enterpreneurs
Direct loans to farmers based on sanchalak recommendations

21. Solution : Access to Price Information – Anytime & In the Village

22. Taking ICTs & Biz Models to Rural India
Training

23. Taking ICTs & Biz Models to Rural India
Power
Connectivity
Website

24. Laboratory Services
For soil testing (agriculture) and virus testing (aquaculture)

25. Current Network Size Adding Six New Choupals Every Day
State
Choupals
Hubs
Madhya Pradesh
1750 43
Uttar Pradesh 42
Maharashtra
900 22
Rajasthan
500 15
Karnataka
100 2
Andhra Pradesh
150 3
5,150
127
Villages
31,000
Farmers
3,500,000
Adding Six New Choupals Every Day
Intend Scaling up to 100,000 Villages in 15 States by 2010

26. THE SOCIAL IMPACT OF E-CHOUPAL
Agricultural Best Practices
Customized Quality Solutions
Intelligent Product Deployment
E.g.-In Khasrod, soy production declined from a high of 100% to 50%. After ITC’s involvement, soy is seen that 90% of farmers are planting the crop.
Link farmer and their families to the world
Tracking of future prices from Chicago board of trade as well as from Mandi
Children use computer for schoolwork, play games and obtaining print out of mark sheets
Youngsters use computers to research the latest movies, cell-phone models, and cricket news etc.

27. Summary
Price sensitive and cash leveraged system to knowledge based operation - The ITC e-choupal model shows that ICT can be creatively used on win-win basis.
All stakeholders part of the system.
A creative business model is required to spur economic growth at the village level, mere dissemination of information may be inadequate in certain contexts

28. ITC Leading private company, 90 year old history
Market capitalization US $ 14 billion, turnover US $ 5 Billion
Amongst World's Most Reputable Companies by Forbes magazine
Diversified presence in Cigarettes, Hotels, Paperboards & Agri- Business, Information Technology, Branded Apparel, Personal Care, Stationery, other FMCG products.

29. ITC
Created ABD in 1990 as an agri-trading company - aiming to “offer the world the best of India's produce.”
Feed ingredients, Food grains, Coffee, edible nuts, Shrimps, processed foods.
60% of group’s forex earning
INR 200 crore export, INR 300 crore local earning.
Awards – UNIDO, TERI, NASSCOM – Golden peacock award, Business Transformation award.

30. Thank You