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The Big Picture:
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.
The e-Choupal model has been
specifically designed to tackle the challenges posed by the unique features of
Indian agriculture, characterised by fragmented farms, weak infrastructure and
the involvement of numerous intermediaries, among others.
The Value Chain - Farm to Factory
Gate:
'e-Choupal' also unshackles the
potential of Indian farmer who has been trapped in a vicious cycle of low risk
taking ability > low investment > low productivity > weak market
orientation > low value addition > low margin > low risk taking
ability. This made him and Indian agribusiness sector globally uncompetitive,
despite rich & abundant natural resources.
Such a market-led business model can
enhance the competitiveness of Indian agriculture and trigger a virtuous cycle
of higher productivity, higher incomes, enlarged capacity for farmer risk
management, larger investments and higher quality and productivity.
Further, a growth in rural incomes
will also unleash the latent demand for industrial goods so necessary for the
continued growth of the Indian economy. This will create another virtuous cycle
propelling the economy into a higher growth trajectory.
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, counter-party 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 customised
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.
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 reach out to over 4 million farmers growing a range
of crops - soyabean, coffee, wheat, rice, pulses, shrimp - in over 40,000
villages through 6500 kiosks across ten states (Madhya Pradesh, Haryana,
Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra,
Kerela and Tamil Nadu).
The problems encountered while
setting up and managing these 'e-Choupals' are primarily of infrastructural
inadequacies, including power supply, telecom connectivity and bandwidth, apart
from the challenge of imparting skills to the first time internet users in
remote and inaccessible areas of rural India.
Several alternative and innovative solutions - some of them
expensive - are being deployed to overcome these challenges e.g. Power back-up
through batteries charged by Solar panels, upgrading BSNL exchanges with RNS
kits, installation of VSAT equipment, Mobile Choupals, local caching of static
content on website to stream in the dynamic content more efficiently, 24x7
helpdesk etc.
Going forward, the roadmap includes
plans to integrate bulk storage, handling & transportation facilities to
improve logistics efficiencies.
As India's 'kissan' Company, ITC has
taken care to involve farmers in the designing and management of the entire
'e-Choupal' initiative. The active participation of farmers in this rural
initiative has created a sense of ownership in the project among the farmers.
They see the 'e-Choupal' as the new age cooperative for all practical purposes.
This enthusiastic response from
farmers has encouraged ITC to plan for the extension of the 'e-Choupal'
initiative to altogether 15 states across India over the next few years. On the
anvil are plans to channelise other services related to micro-credit, health
and education through the same 'e-Choupal' infrastructure.
Another path-breaking initiative -
the 'Choupal Pradarshan Khet', brings the benefits of agricultural best
practices to small and marginal farmers. Backed by intensive research and
knowledge, this initiative provides Agri-extension services which are
qualitatively superior and involves pro-active handholding of farmers to ensure
productivity gains. The services are customised to meet local conditions,
ensure timely availability of farm inputs including credit, and provide a
cluster of farmer schools for capturing indigenous knowledge. This initiative,
which has covered over 70,000 hectares, has a multiplier impact and reaches out
to over 1.6 million farmers.
ITC's e-Choupal has won numerous
awards:
- United Nations Industrial Development Organisation (UNIDO) Award at the international conference on Sharing Innovative Agribusiness Solutions 2008at Cairo for ITC's exemplary initiatives in agri business through the e-Choupal.
- The Ashoka - Changemakers 'Health For All' Award 2006 for the Rural Health Services model for delivery of health services through the e-Choupals.
- The Stockholm Challenge 2006. This award is for using information technology for the economic development of rural communities.
- Innovation for India Award 2006 for ITC e-Choupal in the Social Innovations category for business organizations. The first of its kind in India, based on parameters of number of lives impacted, degree of impact on organization and environment, uniqueness, leverage of resources and whether it was scalable and sustainable, e-Choupal was declared as one of 'India's Best Innovations'.
- The Development Gateway Award 2005 (previously known as the Petersberg Prize) for the trailblazing e-Choupal initiative. 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 for 2005'. The Company received this award for its e-Choupal and social and farm forestry initiatives that are impactfully transforming lives and landscapes in rural India.
- The Corporate Social Responsibility Award 2004 from The Energy and Resources Institute(TERI) for its e-Choupal initiative. The Award provides impetus to sustainable development and encourages ongoing social responsibility processes within the corporate sector.
- The inaugural 'World Business Award', instituted jointly by the International Chamber of Commerce (ICC), the HRH Prince of Wales International Business Leaders Forum (IBLF) and the United Nations Development Programme (UNDP). This award recognises companies who have made significant efforts to create sustainable livelihood opportunities and enduring wealth in developing countries.
- The 'Enterprise Business Transformation Award' for Asia Pacific (Apac), instituted by Infosys Technologies and Wharton School of the University of Pennsylvania.
- PC Quest's IT Implementation Award in the 'Best Project' category.
- The Golden Peacock Innovation Award 2004.
- The NASSCOM award for 'Best IT User in FMCG' in 2003. The Award is a recognition of ITC's successful integration of its IT usage with its business processes.
- The Seagate Intelligent Enterprise of the Year 2003 Award, for the most innovative usage of Information Technology.
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Links to Press Releases :-
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Dec 01, 2008
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Jul 31, 2008
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Sep 16, 2005
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Jun 01, 2005
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May 13, 2005
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Jun 03, 2004
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May 19, 2004
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Jan 21, 2004
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Nov 29, 2003
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