e-choupal

Presented BY:-

BITU NANGKAR

CAU/CPGS/AG-EXT/M-18/01

COLLEGE OF POST GRADUATE

STUDIES,CAU,UMIAM
Content

– 1. Introduction
– 2. Concept
– 3) Establishment
– 4) Principle
– 5) Features
– 6) Function
– 7) Benefits
– 8) Effect
– 9) Conclusion
Introduction

–
The e-Choupal is one of the ICT based private agency which is provision inputs and extension
service in the field of agriculture. e-Choupal is an initiative of Indian Tobacco Corporation (ITC)
Limited (a large Multi Business Conglomerate in India) to link directly with rural farmers for
procurement of agricultural/aquaculture produce. e-Choupal was conceived to tackle the
challenge posed by the unique features of Indian agriculture characterized by fragmented
farms weak infrastructure and the involvement of numerous intermediaries. 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. e-Choupal also unshackles the potential of Indian farmer who
has been trapped in a vicious cycle of low risk raking ability, low investment, low productivity,
weak market orientation, low value addition. Such market led business model can enhance
the competitiveness of Indian agriculture and trigger a virtuous cycle of higher productivity,
higher income and enlarges capacity for farmers risk management larger investments and
higher quality and productivity.
Concept

– e-Choupal is a Hindi word which means “village meeting place”. Market is

meeting place where sellers/ customers come together to do the transactions.
It is a virtual market place where farmers can do the transaction, facilitated by
an internet linked computer, directly with a purchaser and can realize better
price for their produce.
–
Establishment

– It was launched in June 2000, “e-Choupal” has already become the largest
private sector initiative among all Internet-based interventions in rural India. e-
Choupal services today reach out to more than 40 lakh farmers growing a range
of crops-soyabean, Coffee, wheat, rice pulses, shrimp- in over 40,000 villages
through 6450 kiosks across 8 states [M.P., Karanataka, A.P., Maharastra,
Rajasthan, Uttarakhand and Tamil Nadu].
Principle

– 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 scaleable:
– 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
Features

– The e-Choupal model has been specially designed to tackle the challenges
posed by the unique features of Indian agriculture, characterized by fragmented
farms, weak infrastructure and the involvement of numerous intermediaries
among others. The e-Choupal also unshackles the potential of Indian Farmers
who has been trapped in a vicious cycle of low risk taking ability.
Functioning

– e-Choupal directly links with farmers for procurement of agriculture produce

like soybeans, wheat, coffee and Prawans. Traditionally these commodities
were procured in “mandi” [major Agricultural marketing centers in rural areas],
where the middleman used to make most of the profit. These middlemen used
unscientific 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.
With e-Choupal, the farmers have a choice and the exploitative power of the
middleman is neutralized.
 Functioning

– ITC has now established computers and Internet access in rural areas across several
agricultural important regions of the country, where the farmers can directly
negotiate the sale of their produce with ITC. A personal Computer [PC] with Internet
access at these centers enable the farmers to obtain information on mandi process,
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 better price. Each e-Choupal is run by a sanchalak [facilitator] who is a
trained farmer or a youth of the village. The computer 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 sanchalak bears some
operating cost but in return earns services fee for the e-transactions done through
his e-Choupal. The warehouse hub is managed by the same traditional middle-men,
now called samyojaks but with no exploitative power due to their reorganized role.
Benefits

– The e-Choupal system gives farmers more control over their choices a higher profit
margin on their crops and access to information that improves their productivity. By
providing a more transparent process and empowering local people as key nodes in
the system. ITC increases trust and fairness. The increase efficiencies and potential
for improving crop quality contributing to making Indian agriculture more
competitive. Despite difficulties from undependable phone and electric power
infrastructure and sometimes limited hours of use, the system also links farmers and
their families to the world. Some sanchalaks track future prices on the Chicago
Boards of Trade as well as local mandi prices for advising the farmers about current
trends in market. Village children have used the computers for school work, games
and to obtain and print of their academic test results. The result is a significant step
towards rural development.
Effects

– Due to the eChoupal services, farmers have seen a rise in their income levels
because of rise in yields, improvement in quality of output and a fall in
transaction costs. Even small farmers have gained from the initiative.
Customized and relevant knowledge is offered to the farmers despite
heterogeneous cultures, climates and scales of production. Farmers can get
real-time information despite their physical distance from the “mandis”. The
system saves procurement costs for ITC Limited. The model is quite different
from the other models, as the farmers do not pay for the information and
knowledge they get from e-Choupals. The principle of the e-Choupals is to
inform, empower and compete.
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. Distance, social discrimination and formal regulations often keep small and
marginal and resource-poor farmers out of the market. 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. Besides, e-Choupal has favorably impacted the
supply-chain activities related to agriculture. Produce quality and volumes have risen. Prices of farm
inputs have declined and quality of input has risen. Prices of farm output have risen. Small and poor
farmers have been the principle beneficiaries. Their cost of transactions has declined. Their incomes
have risen. What is more significant is that, the small marginal and resource-poor farmers have
typically derived these in their locales. e-Choupal ensures world class quality in delivering all these
goods and services through several products/ services specific partnership with the larders in the
respective fields in additions to ITC’s own expertise. While the farmers benefit through enhanced
farm productivity and higher farm gate price, ITC benefits from the lower net cost of procurement
[despite offering better prices to the farmers] having eliminated costs in the supply chain that do
not add value.
THANK YOU

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