1. Group 16 1

2.  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.
 The fragmented farms are constraining the risk taking ability.
 Large arable land, Rich & diverse agroclimatic zones
 Heavily dependent on Monsoon
 Strong institutional base in R&D
 Large domestic consumption base
 Poor extension work at farm level
 Numerous intermediaries
 Weak infrastructure & inconsistent quality
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3.  Hindi word meaning- Village meeting
 Virtual market place where farmers can transact directly with a
processor and can realize better price for their produce developed by
ITC agri-business division
 Brainchild of S Sivakumar
 Promoted by Y.C.Deveshwar, Chairman, ITC
 Launched in June 2000
 Largest Internet-based initiative in rural India
 Benefits 4million farmers in 40000 villages
 Target Area so far 38,000 villages, 6500 kiosks, 9 states
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4. Why it became a success?
 Only initiative that attempted to combine Services and an
Effective Business Model successfully
Designed to address the issues such as:
1. Fragmented farms
2. Weak institutions
3. Involvement of intermediaries
4. Information Asymmetry
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5. Pakka Adtiya
(Registered Dealer)
Agri-Input Dealer/
Retailer
Companies Stockiest
Trader
Money
Farmer
Processor
Lender Broker
ITC-IBD
Agril University,
VLW (of Dept of
Met Dept,
Agriculture)
Insurance Co.
Kaccha Adtiya
(Un-Registered Dealer)
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6. 6

7. 7

8. The Tactical The Strategic The Social
Imperative Imperative Imperative
ITC’s distance from
Farmer Horizontal spread
Farmers profit
Daily price inflation
Vertical presence
Capture of Intra-day
Price shifts
Information
Seasonal price Asymmetry
Risk management
Inflation
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9. To enhance farm productivity by
 Disseminating latest information on district level weather forecasts
for short & medium terms
 Best practices in farming
 Supply of quality inputs (seed, herbicide, fertilizer, pesticides etc)
in the village itself
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10. To improve price realization for farm produce by
 Making available live data on markets viz. Location / Buyer
wise prices offered.
 International market prices of relevant agri-commodities.
 Historical & Up-to-date information on supply & demand.
 Expert opinion on expected future price movements.
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11. Helps minimize transaction costs in marketing farm produce by
 Buying output directly from the farmers
 Through transparent pricing & weight management practices
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12.  ITC accumulates information regarding weather, modern
farming practices, and market prices from sources like
Meteorological Department, Agri-universities, mandis
(regional market) etc., and uploads all information on to e-
Choupal web site.
 It is an interlocking network of partnerships (ITC + Met Dept
+ Universities + Input COs + Samyojaks, the erstwhile
Commission Agents) bringing the “best-inclass”
information, knowledge and inputs.
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13. 13

14.  Customer centric
 Used for many commodities & multiple transaction
 Easily scalable
 Uses local talent & local people & develops local leaders
 Extended to local as well as global procurers
 Nurtures local entrepreneurs.
 Uses all the existing institutions & legal frameworks
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15. o Crop-specific intervention
o Low-cost last mile
Ties with ITCs larger goal of transforming the e-Choupal
network into a distribution superhighway
o Intelligent first mile
Transforming farmers from being consumers to participants
in the process of product design

16. o Social impact with increase in ITCs mileage: Social impact of e-
Choupals ranges from short-term provision of internet access to
the long-term development of rural India as a competitive
supplier or buyer of a range of goods and services
o Reengineer, not reconstruct
Keeping efficient providers while creating roles for some
inefficient providers from the existing system
o Address the whole, not just a part
Created an alternative to village trader services by addressing
the entire gamut of needs by creating access to agriculture
extension services
o Selection & maintaining credibility of Sanchalaks

17.  ITC communicates with Sanchalaks through the e-choupal
portal
 Price benchmark made wrt mandi’s closing price
 Sanchalak inspects produce for quality, make appropriate
deductions to benchmark price and generates a note for the
farmer
 This note is produced to the nearest ITC procurement hub
 Farmer bears the risk of transportation for the produce
delivered that is reimbursed by ITC
Inspection Weighing Inbound Weighing Hub
& Grading & Pricing Logistics & Payment Logistics

18. 18

19. Better information Access to price at several
nearby outlets Better
price
Better use of time Access to price choice
prior to visiting mandi
Transportation cost ITC compensates its Lower
sellers logistic
Transportation duration ITC no more than few cost
hours in the entire
process
Weighing accuracy ITC electronic scales are
accurate and impartial
Granularity of weighing Single weighing concept
eliminates the risk of
pilfering
Professionalism and Dignity accorded to
dignity farmers by a professional
process 19

20. Disintermediation saving Commission paid to agents
replaced for only a half percent of
commission to the Sanchalak
Freight cost Only half the cost paid to farmers
as compared with agents initially
Risk management Long term supplier relationship
with its farmers. The information
yielded allows ITC to better plan
future operations
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21.  Non familiarity with internet usage for first –time users
 ITC also had to surmount regulatory barriers. The Agricultural
Produce Marketing Committee Act (APMC Act) prohibits the
purchase of specified commodities (including several that ITC
deals in) from any source other than government-designated
mandis. ITC had to convince political systems of state
government
 Rural India faces the problems of infrastructure bottlenecks
such as outdated telephone exchanges, frequent electricity
outage, and unreliable Internet connectivity.
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22.  Commission agents- even after compensating for lost
income, they had lower income after the e-Choupal
 Mandi laborers- severely impacted. ITC’s long term vision to
employ them in the hubs
 Bazaars near the mandi-farmers diverted to shops near the ITC
hubs, diversion of revenue
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23.  It is a low cost/multi business model operated by the
farmer representative.
 E-choupal has been one of the best ICT application platforms
that has been scaled replicated and sustained
 The Sanchalaks are selected carefully and they have been able
to induce the feeling of involvement
 E-choupal has provided economic benefits even for the
small farmers. Every beneficiary gets benefit and the equitable
benefits make the adoption very rapid
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